easyJet (EZJ) today revealed a £15million hit from the drone chaos at London Gatwick Airport last month. The group said it racked up £10million in extra costs, with the incident affecting around 82,000 customers and leading to more than 400 flights being cancelled. The low-cost airline also suffered £5million in lost revenues following the disruption when the drone sightings brought the airport to a standstill just before Christmas. Chief executive Johan Lundgren said the group ‘did everything we could to help our customers affected by the incident’. He added: ‘There has been a one-off cost impact from this incident, but underlying cost progress is in line with expectations. ‘I am proud of the way our teams worked around the clock to mitigate the impact of the incident and looked after affected customers.’ But Mr Lundgren said the incident was a ‘wake-up call’ for airports. He said: ‘We were disappointed that it took a long time to resolve.’But he said it was a ‘criminal act and illegal activity’, adding: ‘You can’t always protect yourself from that, but it’s a wake-up call and airports will be better prepared going forward.’
Dixons Carphone (DC.) has booked another sales slump at its mobile division over the key Christmas quarter as consumers increasingly snub lengthy mobile contracts in favour of SIM only contracts. But rising sales at its electrical department offset the decline in mobile phone sales and the troubled retailer behind Curry’s PC World and Carphone Warehouse said profit for the year remained on track. UK like-for-like sales of mobile phones fell 7% in the 10 weeks to January 5, while total mobile sales plummeted 12% in the quarter. But like-for-like sales of white goods, televisions, games and other electrical items rose 2% in the UK & Ireland and by 5% in the international division. Margins remained stable, and the company, which confessed to a major data breach last year, said it remains on course to deliver a £300million profit this financial year. Chief executive Alex Baldock said: ‘Peak trading was solid and in line with expectations, producing record sales against a tough backdrop. ‘We continued to grow our leading electrical market positions in all territories, online and instore. In UK mobile, performance was as expected. Overall, our peak trading was disciplined and well-executed, with stable gross margins.’
Mike Ashley bids to be King of the High Street: Billionaire plots merger of HMV and Game Digital (GMD). The Sports Direct founder has made a bid for the beleaguered music retailer, which fell into administration just days after Christmas. Speculation is mounting that Ashley wants to merge HMV with video game company Game Digital, in which he has a 25.4% stake. HMV has 125 shops and 2,025 staff in the UK. The 54-year-old, who owns Newcastle United, has already bought Evans Cycles and House of Fraser in cut-price deals within the past six months. He has suggested merging House of Fraser with Debenhams (DEB), in which has a 29.7% stake. He also owns Agent Provocateur and a 27% stake in fashion chain French Connection Group (FCCN). But experts have warned that Ashley is ‘swimming against the tide’ as the High Street fights for survival in the face of crippling business rates and an onslaught from online rivals such as Amazon. Referring to Ashley’s High Street interests, Russ Mould, investment director at AJ Bell, said: ‘It’s a bit of a rag, tag and bobtail collection if you’re being rude about it. ‘People will be thinking he’s throwing good money after bad. ‘He clearly thinks there’s some value in these businesses but he’s definitely swimming against the tide at the moment.’
TalkTalk TV customers to be stung with sneaky multi-room charge they must opt out of if they want to avoid a £48-a-year fee. Hundreds of thousands TalkTalk Telecom Group (TALK) TV customers will be hit with a £4-a-month fee for multi-room use from February with users having to opt-out if they wish to avoid the charge. Currently, TalkTalk’s TV service is free to its broadband customers but there is an additional £4-a-month charge to use the multi-room service, which means users can watch TalkTalk TV on two screens in separate rooms at the same time. However, from next month, this service will be included in all TV customer packages as standard so customers will be paying an extra £48-a-year – even if they don’t have screens in multiple rooms and so won’t be taking advantage of the feature. Additionally, to take advantage, customers must pay a £50 set-up fee if they want to make use of multi-room.
Barclays boss Jes Staley to defend his bank from siege by corporate raider Edward Bramson at meetings in Davos this week. Staley – who is in the Swiss resort until Friday for the annual gathering of the global elite – will hit out at Bramson’s claims that Barclays (BARC) is being held back by its prized investment bank. Staley, 62, will meet shareholders and clients in Davos, with Bramson’s intentions expected to be a key topic. The lender is battling to fend off an attack from Bramson, who is trying to force himself onto its board and wants a massive overhaul. Sources stressed Staley will not be using his trip solely to marshal support against Bramson, adding Davos is primarily an opportunity to meet key customers. But it is thought he will take the opportunity to mount a robust defence of the bank’s strategy.
London is still a source of strength despite housing market slowdown, says estate agent M Winkworth (WINK). A downturn in Britain inspired by Brexit uncertainty and tax changes has made it very tough for anyone involved in housing. London has been especially difficult with prices in the centre a fifth lower since 2014 and by around 10% in the suburbs. Estate agent Winkworths generates 80% of its revenues in London, but even with this bias a trading update earlier this month was noticeably more upbeat than many in the sector. Both profits and revenue will increase in 2018 while there will also be a higher dividend, it said.
Just Eat (JE.) chief executive Peter Plumb has stepped down with immediate effect after just one and half years at the helm as it faces pressure from an activist investor. Plumb, who joined the takeaway firm in July 2017, is being temporarily replaced by chief customer officer Peter Duffy while the firm searches for a permanent new boss. The announcement comes as Just Eat was recently described by a US hedge fund as the ‘the worst-performing public equity in online food delivery globally’. Cat Rock Capital, which holds a 2% stake in Just Eat, demanded in December that the firm sell assets, slash pay for top executives and urged the board to put together a three-year plan to which pay could be linked. Just Eat, which crashed out of the FTSE 100 in a recent reshuffle, is desperately attempting to keep up with Deliveroo and Uber, firms that have been muscling in on its territory of late.
William Hill (WMH) shares took a tumble today after the bookmaker said it expected full-year profits to fall 15% and blamed challenging conditions on the High Street for its troubles. The group, which downgraded its profit guidance in November, confirmed adjusted operating profit is set to come in at £234 million, within the previously announced lower range of £225million to £245million. In a brief trading update William Hill said this year it would focus on becoming a ‘digitally-led international business’ as it faces a crackdown on gambling in the UK, both online and on the high street.
Online trading firm Plus500 Ltd (DI) (PLUS) has angered shareholders by ramping up the potential pay of its boss and finance chief by more than £4.1m. The business called a meeting of its shareholders, which took place yesterday, to vote on changes to its pay policy. It wanted to alter the terms for both chief executive Asaf Elimelech and chief financial officer Elad Even-Chen, but almost 48% of shareholders voted against both proposals. Plus 500 said the changes were designed to bring its pay policy in line with ‘corporate governance best practice’. Plus 500 said it would engage with investors to understand their feedback.
Bookmaker William Hill (WMH) was also attempting to appease disgruntled shareholders, after revealing profits slumped around 15% in 2018. The firm is planning a shake-up of its UK betting shops, amid a crackdown on the fixed-odds betting machines dubbed the ‘crack cocaine’ of the gambling world and increased regulatory focus on protecting customers at risk of gambling addiction. These pressures on William Hill have pushed profits down to just £234m for 2018, in the middle of the reduced £225m-to-£245m range it had previously guided towards in November. But William Hill has said it will focus on rolling out its own self-service betting machines, and potentially move or close shops in areas which are not performing to expectations. It is also hoping to improve its digital services to gain more customers online, and expand into the US where online betting is becoming slowly less regulated.
B&Q and Screwfix owner Kingfisher (KGF) had a disappointing day, after a downgrade from analysts at RBC Capital Markets pushed the shares 4% or 9.1p lower, to 217.7p. RBC’s Richard Chamberlain said any fall in UK house prices could hit sales of expensive goods at DIY chain B&Q, while the French business Castorama needs to improve its online shopping site and value-for-money offering.
Shares in Meggitt (MGGT), which makes components for the defence industry, soared as it signed a ten-year agreement with aerospace manufacturer Pratt & Whitney. The contract, worth around £580m, will see Meggitt continue to supply components for the engines which power the F-22 Raptor and F-35 Lightning II fighter jets.
