Wizz Air profit plummets amid rising costs
Wizz Air profits plummeted in the third quarter of 2018, as rising fuel and staff costs impacted earnings.
The Hungarian airline reported a pre-tax profit €1.8 million, compared to €14.6 million a year before.
Despite the fall in revenues, passenger numbers were up 15% to 8.1 million.
Across the period, Wizz Air flying hours fell 6.6% to 11.3 hours per day.
However, the company attributed rising costs to the slowdown in revenues. Cost per available seat kilometre increased by 9.3%, including fuel, whilst it climbed 4.3% without.
Alongside higher fuel prices, there was also a 22% rise in staff-related costs, with rises in pilot salaries during the quarter.
József Váradi, Wizz Air Chief Executive, commented:
“The Company maintains its net profit guidance range of between €270m and €300m for the full year, where we will be within this range will depend on the extent of March yield pressures which will be affected year-on-year given Easter falls after the financial year-end in April and external factors such as Brexit uncertainty.”
Wizz Air is not the only airline that has been struggling as of late.
On Tuesday, Norwegian Airlines announced a share rights issue as it looks to raise £270 million, after talks with IAG over a potential takeover fell through.
Earlier this month, EasyJet (LON:EZJ) revealed that the Gatwick drone chaos cost the low-cost airline £15 million.
Ryanair (LON:RYA) also issued a profit warning, blaming lower-than-expected air fares.
Shares in Wizz Air (LON:WIZZ) are currently down 2.69% as of 10:56AM (GMT).
Apple profits decline 5%, shares fall
Apple (NASDAQ:AAPL) reported its first decline in profit in over a decade, sending shares down on Tuesday.
The tech giant said iPhone sales, which account for the majority of profits, fell 15% in the first quarter to December end.
The company said that revenues fell 5% in the quarter to $84.3 billion (£64.5 billion).
Services revenue, which includes App Store sales, hit a record of almost $11 billion (£8.4 billion).
Earlier this month, Apple warned that profits would be lower than expected at around $84 billion.
The company blamed the economic slowdown in China as well as currency movements, with the stronger dollar making Apple products more expensive for consumers.
In comments to investors, Chief Executive Tim Cook said:
“While it was disappointing to miss our revenue guidance, we manage Apple for the long term, and this quarter’s results demonstrate that the underlying strength of our business runs deep and wide.
“Our active installed base of devices reached an all-time high of 1.4 billion in the first quarter, growing in each of our geographic segments.
“That’s a great testament to the satisfaction and loyalty of our customers, and it’s driving our Services business to new records thanks to our large and fast-growing ecosystem.”
Cook also attributed the fall to high prices, which had been deterring customers.
The company’s latest iPhone XR is on the market for £749, whilst the XS is retailing from £999.
However, customers are not responding to high prices for the newer models, instead opting to retain their old handsets.
As a result, earlier this month Apple announced it would be cutting iPhone production by 10% over the course of the next three months.
Shares in Apple are currently down -1.04% as of 10:29AM (GMT).
Nomura set to cut 50 jobs from global trading team
Nomura is set to cut as many as 50 jobs from its global trading team, as the company looks to streamline costs.
The Japanese bank is looking to shed underperforming employees, after a difficult year for the company, particularly across its European division.
Whilst redundancies are expected to take place across Asia and the US, it is expected that the majority of losses will be in Europe.
As of currently, Nomura has 3,000 staff across Europe. Back in 2008, Nomura acquired Lehman Brother’s European Equities and Investment Unit.
In 2009, the company moved its Investment Banking headquarters from Tokyo to London, as part of a move to shift its business focus towards Europe.
However, since acquiring Lehman Brother’s assets, Nomura has continually struggled to perform in the continent.
The Japanese bank has already planned to move its European lending division hub out of London to Paris, as result of Brexit negotiations.
Alongside the move to France, Nomura is also setting up a broker dealer in Frankfurt to deal with trading once the UK has completed its withdrawal from Europe.
Nomura is one of many big banks relocating out of the capital as a result of Brexit.
Barclays (LON:BARC), HSBC (LON:HSBA) and JP Morgan (NYSE:JPM) have all committed to shifting some operations to a European nation.
Shares in the bank (TYO: 8604) are currently down -2.26% as of 13:37 as the market reacts to the announcement.
TomCo Energy shares fall after field test announcement
TomCo Energy shares (LON:TOM) fell more than 20% on Tuesday, after the company announced a field test programme in 2019.
The shale exploration and development group said that it had commenced work to start its field test programme at the company’s Holliday Block in Utah, of which it owns a 80% interest.
Should the test prove successful, the Board expects that initial production will be between 5 to 10 barrels of oil, the statement added.
The company also announced the securing of a patent by its subsidiary, TurboShale, for its RF technology.
The patent request was initially filed back in 2015. The company said that the patent was assigned to TurboShale in 2017 as part of an agreement with JRT.
The statement said that ‘Further development of the process explained in the patent will be carried out as the Company expands its field operations.’
John Potter, Chief Executive of TomCo Energy, commented on the announcement:
“We have two key strands of work ongoing at present with our primary objective being to test the application of TurboShale’s RF technology on our Holliday Block to achieve first oil. TomCo will, subject to a successful test, then seek to scale operations into the pre-production phase. The enhanced technical team has done excellent work on seeking to identifying a suitable site for the test and we look forward to providing further updates in this regard.
I am also excited about the second string of our work currently on going, as we seek to develop the next phase of RF technology to deal with direct water contact. The Board believes this should be solved with adaption of current technologies and processes and is part of TomCo’s strategy to build value from having the technology and experience to deliver strategic, commercial oil production within the US.”
TomCo Energy operates under the subsidiaries of The Oil Mining Company, which it owns 100% of, as well as TurboShale Inc, of which it holds 80%.
The company’s operations are focused in Utah in the U.S.
Shares in the firm are currently -22.22% as of 12:42PM (GMT).
CVS Group shares plunge after profit warning
CVS Group (LON:CVSG) shares plummeted more than 20% on Tuesday, after the company warned on profits.
The veterinary services provider said it expects earnings for the full year to fall behind market expectations as a result of rising employment costs and lower margins.
CVS Group said that for the first half of 2019, total sales increased by 23.7% and like-for-like sales increased by 4% compared to the same period a year ago.
In addition, the company said gross group margins were down to 76.2%, compared to 79.5% in 2018.
Looking ahead, CVS Group said it was in the midst of enacting various cost saving initiatives to counteract falling revenues.
The statement said:
“A number of cost savings have been identified across the Group and these are expected to generate savings both in H2 2019 and in the remainder of calendar year 2019, with ongoing effect thereafter.
In conjunction with cost savings, additional procedures have been implemented over the employment of locums in practices and the Group expects to see a reduction in locum costs in the remainder of the financial year as a result.”
CVS Group owns over 500 veterinary surgeries in the UK, the Netherlands, and the Republic of Ireland. The firm was founded back in 1999 after opening its first veterinary surgery.
Shares in CVS Group are currently down -28.16% as of 12:13PM (GMT).
Hargreaves Lansdown assets fall 6%, shares slide
Hargreaves Lansdown (LON:HL) posted its half-year results on Tuesday, reporting both a fall in net new business and assets, sending shares down.
The financial services company said net new business dropped 24% year-on-year to £2.5 billion, down from £3.34 billion during the same period a year ago.
Meanwhile, assets under administration also fell by 6% to £85.9 billion during the six-month period, down from £91.6 billion a year before.
Hargreaves Lansdown attributed the subdued interim performance to market volatility as well as weaker investor confidence.
Chief Executive Chris Hill said: “The diversified nature of Hargreaves Lansdown has enabled us to continue growing despite a period of geopolitical uncertainty, market volatility and weak investor confidence.
“We have a significant long-term market opportunity and our recent investment in service and developing our proposition are bringing real benefits to the business and our clients, both in difficult times such as the present and as and when conditions improve.”
Hargreaves Lansdown raised its interim dividend to 10.3p per share, up 2% from the 10.1p the year before.
Hargeaves is based in Bristol in the UK. It is a constituent of FTSE 100 on the London Stock Exchange. It has been publicly listed since 2007. As of 2018, the firm had 1,185 employees.
Shares in the company are currently down -4.93% as of 11:29AM (GMT), on the back of its interim results.
Domino’s shares slide as lower profit is expected
Domino’s Pizza (LON:DOM) announced on Tuesday that it expects its annual pre-tax profit to be at the lower end of its guidance. Despite the strong UK performance, its international sales have been weak. Shares in the food outlet slid 7% following the announcement.
UK system sales were up 6% and UK like-for-like sales increased by 4.5%. The company has said that it experienced its busiest ever week in the run-up to Christmas. On the Friday before Christmas, Domino’s sold over 535,000 pizzas in the UK. This is equivalent to 12 a second across a 122-hour trading day.
Domino’s also had a strong digital performance as online sales grew 10.8%.
In April, Domino’s reported yet another strong quarter.
The company has announced that it now has 1,261 stores group-wide. It created over 2,000 jobs as 25 new stores opened in its fourth-quarter, and 59 in the UK and Republic of Ireland in 2018. However, the strong UK and ROI performance was offset by weaker sales internationally. The company experienced weak international sales progress and business integration challenges in Norway. As a result, full year underlying pre-tax profit is expected to be at the lower end of its expectation range of £93.9 million – £98.2 million. Chief Executive of Domino’s, David Wild, commented on the results: “I’m pleased with the continued strong performance in the UK and Ireland, where we opened a further 59 stores. Many families decided to kick off the festive season with a Domino’s, with the Friday before Christmas breaking all records as we sold more than 535,000 pizzas – equivalent to 12 every second.” “Our international businesses offer significant long term potential, but we have experienced growing pains this year, particularly in Norway, where we have faced business integration challenges. Looking ahead, we will invest further in robust teams and infrastructure in our newer markets, to create a solid platform for profitable growth.” “The UK delivered food market is vibrant and we estimate that it will grow at a compound rate of 8% a year to 2022. We aim to maintain our share of this market, thanks to over 30 years of experience in delivery, a leading brand, great-tasting pizza and superior franchisees.” Shares in Domino’s Pizza Group plc (LON:DOM) were trading at -7.16% as of 10:23 GMT.Ryanair cabin crew in Spain vote for recognition agreement
99% of Ryanair (LON:RYA) cabin crew in Spain have voted for a recognition agreement with local trade unions, the airline announced in Tuesday.
The recognition agreement with SITCPLA and USO aims to cover all of Ryanair’s directly employed cabin crew in Spain.
The airline and SITCPLA and USO are now progressing a collective labour agreement. The agreement hopes to be concluded by 30 April 2019.
Spain is the company’s third largest market. It currently has 13 of its 89 bases in the country, according to the Independent.
At the beginning of January, the airline’s cabin crew called off a strike that was planned for 10 January and 13 January.
Ryanair suffered a turbulent 2018, with a number of strikes occurring last year by pilots and cabin crew alike. These strikes caused significant flight disruption.
Moreover, the airline faced legal action over its refusal to offer compensation to thousands of its customers. The Civil Aviation Authority (CAA) said that the customers who had their flights cancelled over the summer period are entitled to compensation under EU regulations. Thousands of customers were affected by the cancelations and delay of flights over the summer. However, Ryanair has said that it does not owe its passengers compensation because the strikes were as a result of “extraordinary circumsances”.
In November, the budget airline announced that it would not alter its plans to close its base in the Netherlands. It was reported that Ryanair had been attempting to limit the power of staff unions by claiming to close bases and relocate staff. Since last August, two staged walkouts had taken place in Portugal, Germany, Spain, Belgium and the Netherlands.
In addition to the employee turmoil, the airline made significant changes to its hand luggage policy last year. The new rules allow a ‘medium’ sized bag, with passengers being given some 25% leeway to the maximum dimensions.
At 10:02 GMT today, shares in Ryanair Holdings plc (LON:RYA) were trading at +0.19%.
Crest Nicholson profits decline 15%, Brexit uncertainty prevails
House-builder Crest Nicholson Holdings plc (LON:CRST) posted its final year results on Tuesday. Profits dropped 15% as current market uncertainty caused by Britain’s departure from the European Union prevails.
Chief Executive Patrick Bergin commented on the results:
“The business has had a good year operationally, with an increase in the number of new homes delivered. However, we have faced some challenges in London and with sales at higher price points where political and economic uncertainty has adversely impacted customer demand and this is likely to continue pending Brexit resolution.”
“Our forward sales are strong, boosted by our strategic partnerships and our new channels to market. Pricing is stable, build cost inflation has moderated and we have implemented plans to mitigate margin pressure, which will take effect progressively over the next few years.”
“Our revised business strategy and focus on cash generation underpins our confidence in generating sustainable shareholder returns.”
Sales, including those from joint ventures, were up 7% to £1,136.6 million.
Pre-tax profit was recorded as £176.4 million, a 15% drop compared to £207 million in 2017.
Total dividend was maintained at 33.0p.
Net cash by the end of the financial year was £14.1 million. This is significantly less than the £33.2 million recorded in 2017.
Drawing upon the impacts of Brexit, Patrick Bergin outlined the future of Crest Nicholson:
“In the context of an unresolved Brexit, I expect the first half of 2019 to be difficult. However, I believe our new strategy will ensure the business is fighting fit and equipped to deal with any challenges it faces.”
“Current market uncertainty is making it hard to look too far ahead, so while we are optimistic about the longer term prospects of the sector, we continue to remain vigilant and responsive. Our focus on the south of England housing markets remains a long-term strength, land remains in good supply and we have strong plans in place to meet the demand for affordable housing.”
“Overall, Crest Nicholson presents a resilient financial proposition and I am excited about our future. We have made good progress this year and I look forward to working with the dedicated and talented people we have across the organisation as we strengthen the business further in 2019.”
London house prices fell 1.2% month-on-month in November, according to the ONS. Given the difficult climate caused by Brexit, the recovery of house prices in 2019 remains uncertain. In fact, a report from the Royal Institution of Chartered Surveyors has outlined that house prices are expected to continue stagnating in 2019.
At 09:19 GMT today, shares in Crest Nicholson Holdings plc (LON:CRST) were trading at +5.26%.
Shield Therapeutics shares rise on iron-deficiency study developments
Shield Therapeutics (LON:STX) announced on Tuesday that it has reported positive results from a study of an iron deficiency treatment in adults suffering from inflammatory bowel disease. Shares in the company were trading almost 11.5% higher following the announcement.
The results are part of a “pivotal” study of Feraccru, a new ferric iron therapy that is approved and marketed within the EU for the treatment of iron deficiency in adults. It is also marketed in Switzerland for the treatment of iron deficiency anaemia in adults with inflammatory bowel disease.
Feraccru is currently undergoing a process of US approval and a decision is expected in July 2019.
In December, the company announced that it was set to expand its iron deficiency treatment for children, with child trials being introduced in 2019.
Chief Medical Officer of Shield Therapeutics, Dr Mark Sampson, commented on the announcement:
“Iron deficiency is a significant and progressive issue in patients with chronic renal disease which has been challenging to treat due to poor compliance with traditional oral iron salts. These results suggest that Feraccru offers a well-tolerated and effective treatment option which can benefit patients over the long-term.”
Additionally, CEO and founder of Shield Therapeutics, Carl Sterritt, said:
“Such positive long-term treatment data for Feraccru in complex patients with chronic diseases like CKD provides a very promising signal for the future commercial success of Feraccru. Having previously seen similar positive long-term effects in IBD patients with IDA this further clinical trial data provides additional evidence that Feraccru is well-tolerated by a majority of treated patients and is effective at correcting IDA. We hope that this positive data provides the necessary evidence to both prescribers and patients with iron deficiency with or without anaemia that Feraccru offers a simple to administer, well tolerated and efficacious treatment alternative that does not require hospital-based administration.”
Shield Therapeutics appointed a new chairman earlier in January, after the former chairman, Andrew Heath, stood down from his position at the company’s AGM.
At 08:58 GMT today, shares in Shield Therapeutics plc (LON:STX) were trading at +11.44%.