The FTSE 100 reflected the broad indecision in markets on Friday in a choppy session that saw early gains disappear, but losses held within a FTSE 100 range beginning to form around 8,020-7,850.

The FTSE 100 was trading at 7,882 at the time of writing.

Concerns around interest rates have prevented global equities breaking to the upside, but underlying strength in economies has provided support for stocks.

Better than expected UK consumer confidence data released on Friday was the latest data point to buoy markets.

“The UK economy recently narrowly avoided recession and the narrative has shifted to one of peak inflation, and an end in sight to interest rate hikes. Consumers with more confidence tend to be more willing to part with cash, which could feed through to better-than-expected retail performance,” said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown

However, later in the session, US personal consumption data highlighted the current ‘good news is bad news’ nature of economic data. A much better than expected growth of 1.8% vs 1.3% for US personal spending in January sent equities into a tail spin as investors braced for higher interest rates for longer.

IAG

IAG demonstrated consumer’s greater propensity to spend with a strong recovery in 2022 revenues. IAG revenue rose to €23bn in 2022 – a substantial improvement on 2021’s meagre €8.3bn.

However, IAG shares dipped slightly on Friday as the airliner also revealed staggering net debt that has hardly moved since the end of 2021.

Tekcapital’s Guident has once more demonstrated their prowess in autonomous vehicle safety technology with the inking of an agreement with NOVELSAT to bolster the connectivity of their remote monitoring systems.

NOVELSAT will provide Guident with access to low-earth space satellites that will facilitate always-on connectivity between autonomous vehicles and Guident’s remote safety centres. 

“NOVELSAT is excited to partner with Guident to bring the highest level of safety to autonomous systems,” said Gary Drutin, CEO of NOVELSAT.

“Our space-based connectivity solutions will ensure the always-on, high-capacity connectivity that is essential for the safe deployment and operation of autonomous vehicles and devices in diverse environments. We believe that this partnership will enable us to lead the way in providing innovative connectivity solutions that meet the needs of the autonomous systems industry.”

Guident’s autonomous vehicle safety technology

Guident’s technology is at the forefront of the autonomous vehicle safety requirement to have access to human intervention.

Tekcapital’s portfolio company has already validated their technology on numerous occasions by securing contracts with the Boca Raton technology campus, and very recently, Auve Technology.

Guident’s partnerships have made autonomous shuttles in closed circuits a reality by providing the necessary remote monitoring networks.

Today’s announced partnership with Novelsat will further strengthen Guident’s offering and possibly open the door to further deals in the future.

“Leveraging cross-network connectivity, our human-in-the-loop AI technologies will enable always-on remote monitoring control of autonomous vehicles and devices, thereby resolving unforeseen situations and providing unparalleled safety and reliability in various applications,” said Harald Braun, Chairman and CEO of Guident.

“We believe the integration of these technologies is a game-changer, and we are excited to be at the forefront by providing low earth orbit satellite monitoring redundance in addition to 5G and GPS monitoring of autonomous vehicles.”

Tekcapital portfolio

With a number of Tekcapital’s portfolio companies already listed in the case of Lucyd and Belluscura, Guident may prove to be something of future blockbuster as it subtly establishes a significant footprint in the autonomous vehicle safety market.

Autonomous vehicle safety is a fast moving industry and Guident has again proved it is one step ahead of competitors.

Tekcapital shares were trading positively at the time of writing.

IAG shares hit a patch of turbulence on Friday after the airline operator released full year results for 2022 which confirmed robust revenue recovery from the pandemic.

Revenue for 2022 was €23bn, up from €8bn in 2021, as pent up demand from the pandemic was unleashed on the travel sector.

After recording a near €3bn operating loss in 2021, the British Airways owner swung to a €1.2bn operating profit.

“British Airways owner, IAG has swung to an operating profit of €1.2bn, compared to billions in losses last year. The impressive regaining of altitude comes as a direct result of Covid restrictions easing and a return to more normal travel,” said

“As a long-haul specialist, IAG has been one of the last names in the sector to gain momentum following the pandemic. Of course, aviation has flown straight into another hurdle in the form of a cost-of-living crisis. So far it seems pent up demand for travel is keeping things propped up, but there is a limit to how long this can continue. It’s heartening to see IAG’s capacity ramping back up to pre-pandemic levels – getting to this point didn’t come without its well-publicised challenges.”

Despite the return to profit, IAG shares were 4% lower at the time of writing on Friday. Analysts at AJ Bell highlighted IAG’s €10.3bn net debt as a potential source of strive for investors.

“As a legacy of Covid, debt is highly elevated. This could make the market uncomfortable, particularly if there is any indication it is preventing IAG from making necessary investments in its business,” said Russ Mould, investment director at AJ Bell.

IAG also announced the €400m acquisition of the remaining 80% of Air Europa on Friday. Although €100m of the consideration will be paid in shares, investors may be a little perturbed IAG are spending cash on acquisitions, rather than paying down debt.

Avation (LON:AVAP) together with its subsidiaries, leases commercial passenger aircraft to airlines worldwide. 

Ahead of announcing its interim results next Friday, 3^rd March, the group has given the market guidance by way of an Update pointing to a full year outturn that will be ahead of expectations.

The Singapore headquartered company’s fleet includes narrow-body jets, twin-aisle jets, and ATR 72 twin-engine turboprop aircraft. 

Set up in 2006, the company now owns and manages a fleet of 36 commercial passenger aircraft. It is also involved in the financing business. 

The Pre-Results Trading Update

Chairman Jeff Chatfield has today stated that due to a combination of factors, such as lower than anticipated aircraft transition costs, lower administration and legal costs, improvements in finance income, recognition of gain on an investment in a listed airline and other variances, Avation expects its financial performance for the full year ending 30 June 2023 to be significantly ahead of market expectations.

Analyst Opinion – ‘fair value’ of 185p a share

John Cummins at WH Ireland was encouraged by the Update statement, especially after the last couple of challenging years for the group.

He notes that market dynamics are starting to provide and increasingly positive backdrop for aircraft lessors such as Avation.

Ahead of this announcement Cummins was anticipating that the year to end June 2023 would see revenues of $93.0m and an adjusted pre-tax loss of $3.4m.

For the coming year his estimates were for $100.9m revenues and an adjusted pre-tax profit of $1.7m.

Conclusion – facing bluer skies

The group’s shares have endured a very bumpy flight over the last few years, they reached 330p in January 2020. The Covid Pandemic saw them drop to 130p within the following two months.

Since then, they have been down to 66p, in May last year, before starting to climb again to rest around the 115p level.

But after the Update the shares have risen 10p to 125p and look to be facing bluer skies.