EasyJet shares slump as Brexit stops travellers booking flights. Budget airline easyJet (EZJ) admitted on Monday that bookings had succumbed to Brexit uncertainty, sparking a wider sell-off of airlines and holiday firms by spooked investors. The company’s shares tumbled almost 8%, or 85p, to 1032.5p as it admitted the political chaos over the UK’s EU exit and a spreading economic malaise in Europe had forced a more “cautious” approach to the second half of its financial year. Easyjet chief executive Johan Lundgren said: “For the second half we are seeing softness in both the UK and Europe, which we believe comes from macroeconomic uncertainty and many unanswered questions surrounding Brexit, which are together driving weaker customer demand.”
Savers who bought bonds in bust London Capital & Finance may have to wait years for significant returns from the company’s one potentially profitable investment under a deal approved by its administrators today. LCF lent £38.6 million of its 11,500 bondholders’ money to a North Sea explorer called Independent Oil & Gas (IOG). One bidder, RockRose, offered to buy the company or pay LCF investors nearly £40 million to repay the loans but its offers were rejected. Instead, the administrator today backed a second deal, which sees Independent raise £16.6 million to fund development of one of its wells and give the company more time to repay the loan. The administrator has also agreed to convert over £1 million of its loan into Independent shares in the hope that the share price will surge if the well proves a success. The hope is that Independent will succeed in negotiating with a big oil company to fund the next round of investment in getting the gas out of the ground, known in the industry as a “farm-out”.
Itaconix is tapping into investor demand for eco-friendly products. Itaconix (ITX) really is a tiddler, but that’s not to say it doesn’t deserve attention. The firm is tapping into investor demand for eco-friendly products, developing sustainable polymers that can be used in detergents, dishwasher tablets and other household goods. The products are relevant because, in 2017, the European Union banned phosphates in dishwasher detergent, following in the footsteps of Canada and some states in the US. Regulation aside, the so-called “naturals” category is no fad, as consumers demand products that don’t pollute the environment and make them feel better about themselves. Nevertheless brokers tend to urge caution on eco-friendly companies as they can often sound revolutionary but then fail to deliver. The company floated back in 2012 and has spent time testing products, hence its slow growth. Revenue last year came in at £800,000, while it also recorded an earnings loss of £4 million. As a result of the inconsistency its share price has been volatile but according to analysts at Capital Network things will improve. In January the firm inked a deal with chemicals giant Nouryon, which will market the polymers to its large customer base. It has a similar supply and marketing agreement with Croda International. Capital says: “We believe that these deals support strong revenue growth in the 2020 to 2021 time frame.”
Hipgnosis Songs Fund (SONG), a music royalty fund set up by Merck Mercuriadis, ex- boss of Sanctuary record label and manager of Guns N’ Roses and Beyonce, this session announced it is looking to do an equity raise. The firm, which has Nile Rodgers on its advisory board, said it wants to use the money to grow its music catalogue, which is currently valued at £234.1 million.
Codemasters (CDM) results were decent. A new version of racing game Dirt Rally and a mobile gaming tie-up in China helped the British video game maker surpass profit expectations today. The company, which listed on the stock market last June, said Playstation 4 and Xbox One game Dirt Rally 2.0 — the successor to the Colin McRae Rally franchise — had enjoyed a good debut in February. Also, earlier-than-expected progress on the tie-up with Chinese online game firm NetEase means Codemasters will report full-year revenue of about £71 million and earnings 5% ahead of predictions at £18.5 million.
Block Energy (BLOE) is up 60%. The Georgian focused oil and gas company said its recently drilled well on its West Rustavi field flowed at 1,100 barrels of oil per day, three times more than pre-drill forecasts of 325 barrels per day. Boss Paul Haywood said: ‘We are delighted to report such encouraging test results from the first well we have sidetracked at our flagship West Rustavi field, delivering a production rate significantly higher than that initially presented. Current performance, complemented by the Company’s increased working interest in the licence, looks set to deliver great value to our shareholders. ‘Management will now digest this extaordinary result and crystalise a development strategy beyond that already outlined to the market on Well 38. This is truly an exciting time for Block Energy, and we look forward to updating the market shortly.’
