Ryanair Holdings (RYA) has warned of more turbulence ahead after a tough summer in which it was hit by strikes and rising costs. The low-cost carrier said that full-year profits would be 12% lower than expected, from €1.25bn-€1.35bn (£1.1-£1.2bn) to €1.1bn-€1.2bn, after a drop in traffic due to co-ordinated pilot and cabin crew strikes in Germany, Holland, Belgium, Spain and Portugal in September. It added that further disruptions in its third quarter “cannot be ruled out”, which may require full-year guidance to be lowered further. Ryanair admitted it had to lower its fares after customer confidence was knocked by the strikes, disrupting bookings for October half-term and Christmas. The news shook the aviation sector, with Ryanair shares falling 8.5% to a two-year low, in morning trading. Elsewhere in the industry, easyJet (EZJ) fell more than 5%, Air France was down 3.5%, Lufthansa 2% and British Airways owner International Consolidated Airlines Group SA (CDI) (IAG) more than 3%.
Tesco (TSCO) – Tesco Bank has been fined £16.4m by the Financial Conduct Authority over a “largely avoidable” 2016 cyber attack that saw criminals steal over £2m from 34 accounts. A report on the hack by the FCA found that fraudsters in Brazil managed to carry out thousands of fake contactless card transactions, likely using genuine Tesco Bank card numbers. They exploited “deficiencies” in Tesco Bank’s debit card as well as in its financial crime controls and crime operations team. There’s no suggestion that Tesco Bank’s servers were breached during the hack. The FCA said on Monday that 8,261 Tesco Bank customers were affected by the hack. Most customers suffered disruption to card payments, however some appeared to have money taken out of their accounts.
The former directors and senior management of House of Fraser have been sacked by amid calls for an investigation into the collapse of the department store group. Sports Direct acquired the chain in August in a £90m deal to buy the company out of administration. The dismissals were announced in a statement that was released to investors after the London stock market closed. Commenting on the latest move by Sports Direct Richard Lim, the CEO of Retail Economics, said putting the House of Fraser back on track will be a significant challenge.
Sainsbury (J) (SBRY). Morrison (Wm) Supermarkets (MRW) – Supermarket chain Aldi has pledged to keep the “contract” with its customers by cutting prices below Tesco’s budget brand Jack’s, as sales hit an all-time high of £10bn in the UK and Ireland. The German discounter increased its customers by 1.1 million, helping sales to rise 16% to a record £10.2bn for the year to December 2017. Operating profits climbed 29% to £266m. Aldi, which opened its first UK store 25 years ago, has posed a serious threat to the dominance of the so-called “big four” grocers. It continued to make in-roads during the period, adding 70 more stores and expanding its market share to 7.6%. Chief executive Giles Hurley said Aldi welcomed competition, but “would never be beaten on price”. Tesco (TSCO) has pledged to be the “cheapest in town” in the local areas where its low-cost chain Jack’s operates.
Unilever’s plan to scrap its Anglo-Dutch structure is facing further opposition after Schroders joined the list of investors opposing the move. Schroders (SDR), a top 30 shareholder, said Unilever’s bid to ditch the dual listing in favour of a single headquarters in Rotterdam, Holland, was not right for investors. Unilever (ULVR) has been met with a chorus of dissenting voices despite launching a charm offensive that urged shareholders to back its plan. Schroders, the 28th largest shareholder at 0.65%, joins Legal & General, M&G Investments, Columbia Theadneedle and Aviva Investors, which have come out against the move.
Royal Mail (RMG) stocks plunged by a record 22.3% after the postal service warned investors that full year profits would be lower than previously expected. In a statement the company said that it expected operating profits before costs will be between £500m and £550m, down from a previous target of £652m. Last year the company recorded an operating profit of £694m. The announcement sparked a drop in Royal Mail’s share price from 490.8p to a low of 381p, the company’s steepest one-day decline since it debuted on the London Stock Exchange in 2013.
Berkeley Group Holdings (The) (BKG) flirted with a one-year low on fears that Government plans to deter foreign property buyers with a new tax will slow the capital’s stuttering housing market. Theresa May will announce plans to hit foreign buyers with a new stamp duty of up to 3% in a bid to stop them snapping up swathes of property. The Sunday Telegraph revealed that the new tax will be applied on top of existing rates and the proceeds will help bolster the Government’s rough sleeping strategy. London has been hit hardest by the slowdown in Britain’s property market as Brexit uncertainty bites. Fears that the measures to help solve the housing crisis will disproportionately affect the capital’s struggling market dragged down construction firms targeting the region. Berkeley slumped 124p to £35.55, a 3.4% slide, while rival Persimmon (PSN) dropped 47p to £23.18, a 15-month low.
easyJet (EZJ) plunged towards the bottom of the leaderboard after rival Ryanair issued a profit warning. EasyJet closed 92p lower at £12.22.
Just Group (JUST) tumbled 8.1p to 80.3p after the shock departure of its finance chief ahead of a regulatory crackdown. Simon Thomas will leave after 12 years in charge of the company coffers. He departs after the company was forced to delay paying its dividend ahead of the Prudential Regulation Authority’s verdict on new rules for equity release mortgages, which allow retirees to free up cash from their homes without making regular repayments. The departure is “very disappointing and likely to pressurise the stock”, warned Barclays analyst Alan Devlin.
After shedding a quarter of its value last week, Thomas Cook Group (TCG) clawed back 0.4p to 58.3p as Germany bank Berenberg predicted clearer skies ahead for the travel firm. It believes that Thomas Cook will stabilise in the short term but warned that the market’s focus could turn to debt due to mature in 2022 if trading continues to deteriorate next year.
Spire Healthcare Group (SPI) rallied 4.4p to 146.9p despite Barclays analysts becoming the latest to cut their rating for the private healthcare operator amid NHS belt tightening.
