Low-cost carrier easyJet (LON:EZJ) has been one of this Thursday’s UK share prices to watch, flying higher on the back of a better-than-expected trading update. Online retailer ASOS (LON:ASC), however, has not been so fortunate, tumbling as it again cautioned on profits.
easyJet flies higher, ASOS slumps
easyJet has climbed higher in London today as it reported a rise in revenue for the three months ended June 30. The low-cost carrier also enjoyed a rise in passenger numbers during the reported period. More notably, however, the company said that it expects to deliver full-year headline profit before tax of between £400 million and £440 million, in line with expectations. The update comes amid the background of ongoing turbulence for the European airlines industry.
“Curiously, the market probably likes the fact easyJet plans to grow capacity at the lower end of historic trends in 2020,” Hargreaves Lansdown analyst Laith Khalaf commented, as quoted by Proactive Investors, noting that easyJet and Irish peer Ryanair (LON:RYA) “have together more than doubled the number of passengers they’re flying in the last ten years, and continue to ramp up air traffic,” resulting in “downward pressure on air fares, which is great for passengers, but not so great for profits”. easyJet’s share price has added 2.6 percent in early afternoon trade, as compared with about a 0.4-percent fall in the mid-cap FTSE 250 index. Ryanair, however, is in the doldrums, trading about 2.3 percent lower.
Royal Mail Group (LON:RMG) has fallen deep into the red this afternoon as it said in a brief statement this morning that overall, its performance in the first three months of the 2019-20 financial year had been in line with expectations, without providing further details. Royal Mail’s share price is about 1.6 percent worse off.
ASOS has tanked as the company revised down its guidance, saying that it now expects profit before tax of between £30 million and £35 million. The move marks the fashion chain’s third profit warning in eight months.
“Clearly management need to rebuild credibility in their financial guidance,” said analysts at Shore Capital, as quoted by Reuters.
In notable blue-chip movers, Vodafone (LON:VOD) is outperforming the market after the European Commission cleared the FTSE 100 telecom group’s acquisition of Liberty Global’s operations in Germany, the Czech Republic, Hungary and Romania. Vodafone’s shares are trading about 0.8 percent higher.
BAE Systems (LON:BA) has also climbed into positive territory after cheering investors that it expects a one-off tax-related non-cash benefit. The blue-chip defence giant expects that a net earnings per share benefit of circa 5p would arise as a result, in addition to its current 2019 underlying earnings per share guidance. The defence contractor’s shares are up by about 0.2 percent in early afternoon trade.
Elsewhere in the FTSE 100, retailers are outperforming the market following the latest retail sales data.
“Retail sales were markedly stronger-than-expected in June as volumes rose one percent month-on-month,” commented Howard Archer, the chief economic advisor to the EY ITEM Club, as quoted by Proactive Investors. “This was a much better performance than had been indicated by soft June surveys from the CBI and the British Retail Consortium and followed month-on-month declines in both May (0.5 percent) and April (0.3 percent).” DIY retailer Kingfisher (LON:KGF) is currently leading the sector higher with a 1.2-percent gain, followed by blue-chip grocer Morrisons (LON:MRW), whose shares are changing hands about 0.7 percent higher, as compared with about a 0.4-percent fall in the benchmark FTSE 100 index.
Utilities SSE (LON:SSE) and Severn Trent (LON:SVT) are up by one percent and 1.7 percent, respectively, with investors favouring defensives. SSE further reaffirmed its outlook with an AGM statement.
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UK share prices to watch tomorrow
Tomorrow’s UK share prices to watch include merchant banking group Close Brothers (LON:CBG), which is scheduled to post its pre-closing trading update tomorrow, which will come ahead of its preliminary results in September. The company said in March that its banking adjusted operating profit had increased one percent year-on-year to £131.1 million in the six months to January 31. The group’s adjusted operating profit, however, dipped four percent amid difficult market conditions for Close Brothers’ Winterflood and Asset Management businesses.
British Land (LON:BLND), Tata Steel (LON:TTST) and Homeserve (LON:HSV) meanwhile are scheduled to hold their respective AGM’s tomorrow.
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