Post-break bounce for the FTSE 100 as travel stocks boosted by EU travel plans

Liam Roche
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Post-break bounce for the FTSE 100 as travel stocks boosted by EU travel plans

The FTSE 100 defied unflattering predictions pushing back past the 7,000 mark as investors’ confidence in a return to normality appears to be growing.

“Bank Holidays seem to be having a restorative effect on the FTSE 100, after coming back from Easter full of vim and vigour, today saw the index make another strong post-break advance, reclaiming the 7,000 mantle,” says AJ Bell investment director Russ Mould.

“The catalyst for this latest move higher is chatter about a commodities supercycle with oil companies and miners higher as well as continuing optimism about the reopening of the global economy – with travel, retail and hospitality stocks also in demand,” Mould added.

There was also good news for airlines, who may dare to dream of a somewhat normal summer, as the EU suggested it could open up to fully vaccinated tourists.

“Time to revive EU tourism industry and for cross-border friendships to rekindle – safely,” EU Commission President Ursula von der Leyen tweeted.

FTSE 100 Top Movers

Fresnillo (4.58%), Polymetal International (3.13%) and Whitbread (2.50%) have made the most ground early on Tuesday following the bank holiday weekend.

At the other end of the FTSE 100, Aveva Group (-3.35%), Pearson (-3.41%) and Just Eat (-2.49%), have seen the biggest falls so far.

Travel Stocks

Britain is set to announce the green list for countries that people can travel to on holiday shortly, and will have the right procedures in place to ensure travel can happen safely, said trade minister Liz Truss on Tuesday.

Hopes that Britons will be able to travel to Europe rose on Monday after the European Union recommended easing restrictions to allow in people who were fully vaccinated or from countries with a “good epidemiological situation”, boosting travel stocks on the FTSE 100. The British government said in mid-April it would announce which countries would be open for quarantine-free travel from England in early May, ahead of a plan to allow holidays again from May 17 at the earliest.

Warren Buffett names successor at Berkshire Hathaway

Liam Roche
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0
Warren Buffett names successor at Berkshire Hathaway

Buffett to be replaced by Canadian vice-chairman Greg Abel

The Oracle of Omaha, Warren Buffet, has announced that Greg Abel, vice-chairman of Berkshire Hathaway, will succeed him as the company’s new chief executive.

Buffett, who built Berkshire Hathaway into a £452bn company, has not given an indication he will step down from his position, despite being 90 years old.

“The directors are in agreement that if something were to happen to me tonight, it would be Greg who’d take over tomorrow morning,” Buffett told CNBC.

Greg Abel was behind the growth of Berkshire Hathaway‘s energy unit into a major US power provider.

The Canadian has been vice-chairman at Berkshire, overseeing its non-insurance businesses since 2018.

Abel appears to have beat Ajit Jain to the post. Jain, who oversees, the company’s insurance business, was another contender for the role.

Buffett appeared to confirm that age may have been a factor in the decision making process.

At 58 years old, Abel is a decade younger than Jain, and Mr Buffett told CNBC that Abel’s relative youth was significant.

“The likelihood of someone having a 20-year runway though makes a real difference,” he said.

In March, Buffett joined an exclusive group of people worth $100bn (£72bn), as Berkshire Hathaway shares hit record highs.

Buffett has said he will give away more than 99% of his fortune, with the bulk going to the Bill and Melinda Gates Foundation.

Travelodge to open 17 new hotels this year

Liam Roche
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0
Travelodge to open 17 new hotels this year

Travelodge set to benefit from surge in staycations in UK

Travelodge, the hotels and hospitality company, confirmed on Tuesday that it is going to open 17 new hotels this year, adding a total of 360 new jobs.

The additional sites will bring the company’s total to 597, spread across the UK, Ireland and Spain.

Two of the new hotels will be in London, while the remainder will be in other parts of the country.

The development of the new sites is expected to cost in the region of £175m, while they are expected to open in time for the summer season.

It could provide a timely boost for Travelodge as Brits are increasingly settling for staycations over the summer holidays.

Craig Bonnar, Travelodge chief executive said: “After a challenging 12 months, today’s announcement demonstrates the strength in the Travelodge brand and is a key step forward as we emerge out of lockdown.”

“I am delighted to be able to say that the opening of our new Travelodge hotels across the UK is going to create 360 new jobs in hospitality and support 17 local economies.”

“Our priority is now to officially reopen our remaining hotels in May, as we emerge from lockdown, welcome our customers back and continue to offer great value but now with even more choice, as we build an even bigger and better Travelodge brand.”

The travel and leisure sector gained 1.3% across Europe over the weekend, benefiting from Britain’s expected announcement of a green list for countries that people can travel to on holidays.

Britons’ summer holiday plans were given a major boost on Monday, as the EU confirmed vaccinated travellers will be able to fly to Europe from June, though it’s understood the UK could give the green light to travel to fewer than 10 countries.

Uber pens deal with Arrival in move towards all-electric taxis

Liam Roche
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0
Uber pens deal with Arrival in move towards all-electric taxis

Uber to transition its 45,000 London-based drivers to electric vehicles by 2025

Arrival (NASDAQ:ARVL), the British electric vehicle manufacturer, recently listed on the New York Stock Exchange, has entered a partnership with Uber (NYSE:UBER) to develop electric taxis.

The deal will involve Uber drivers having an input into the design of the cars which are scheduled to move into production next year.

It is part of a wider plan by Uber to transition its 45,000 London-based drivers to electric vehicles by 2025, while the remainder of UK drivers will do the same by 2030.

When Arrival floated in the New York Stock Exchange in March it committed to developing a “small vehicle” in addition to its vans and buses.

Tom Elvidge, senior vice president of Arrival Mobility UK said: “We know that electrifying ride-hailing vehicles will have an outsized impact on cities, and we are keen to support drivers as they manage this transition.”

“Arrival Car will be centered around drivers’ needs to create a vehicle that is affordable, durable and desirable.”

Uber’s regional general ganager for Northern and Eastern Europe, Jamie Heywood, said: “As our cities open up we have an opportunity to make sure that urban transport is cleaner than ever before. 

“Uber is committed to helping every driver in London upgrade to an EV by 2025, and thanks to our Clean Air Plan more than £135m has been raised to support this ambition.”

“Our focus is now on encouraging drivers to use this money to help them upgrade to an electric vehicle, and our partnership with Arrival will help us achieve this goal.”

It is the latest in a string of partnerships from Arrival. The company developed a bus along with FirstGroup which expected to begin operating early next year, as well as receiving an order for 10,000 vans from UPS.

The key selling-points behind the Arrival Car are the battery’s ability to last all day, as well as being no more expensive than a Toyota Prius.

New premium listing: Darktrace

Andrew Hore
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0
New premium listing: Darktrace

Darktrace was cautious with its pricing and in conditional dealings the share price went to a significant premium, but it was still trading far short of the £3bn at which the management had hoped it would be valued.
One of the main shareholders is Mike Lynch and there are other shareholders under the banner of his venture capital firm Invoke Capital. Mike Lynch is the former boss of software company Autonomy, which was acquired by Hewlett-Packard for $11bn in 2011. There have been subsequent legal actions against Mike Lynch because of the takeover and the claim that figures were inflated. The ...

Revolting shareholders: US listing pay increase causes Tremor

Andrew Hore
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0
Revolting shareholders: US listing pay increase causes Tremor

Tremor International (LON: TRMR) is on its way to a US listing, but shareholders are not happy about the new pay awards for executives. These are required to be voted on by shareholders under Israeli law. The changes will not come into force until the US listing happens. Tremor believes a US listing would get it a rating more in line with US Ad Tech companies. The executive directors will certainly feel the benefit.
The AIM-quoted company held a general meeting on 30 April and there were resolutions to approve the new remuneration for chief executive Ofer Druker, which increases from $600,000 ...

boohoo set to reveal acquisition benefits

Andrew Hore
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0
boohoo set to reveal acquisition benefits

Online fashion retailer boohoo (LON: BOO) is reporting its full year figures on Wednesday 5 May and much has changed with the business compared with one year ago.
The AIM-quoted retailer remains profitable and highly cash generative and it has added retail brands to its portfolio as rivals have fallen into financial difficulties. These purchases have been done at attractive prices and there will be some initial indications at how things are going.
There has also been controversy about suppliers and the way that they have behaved. The UK supplier list and sustainability strategy were published ...

New Aquis admission: Dispersion Holdings

Andrew Hore
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0
New Aquis admission: Dispersion Holdings

Decentralised finance (DeFi) focused investment company Dispersion Holdings (LON: DEFI) went ahead with its flotation at the end of April, but it was not as originally announced in its intention to float on AQSE Growth Market announcement.  
The same team was behind the flotation of NFT Investments (LON: NFT) earlier in April. Dispersion Holdings bought a 2.99% stake in NFT after trading in those shares commenced. The current NFT share price is well below the price paid by Dispersion Holdings. There was also another investment made prior to flotation.
There were initial plans to raise £10...

Dark Horse Investments – Classic Motorcycles that offer unrealised Investment Potential

UK Investor Magazine
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0
Dark Horse Investments – Classic Motorcycles that offer unrealised Investment Potential

Alan Green provides his latest instalment of insight into motorcycle investment

Deliveroo Share Price: Waitrose deal provides welcome boost

Liam Roche
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0
Deliveroo Share Price: Waitrose deal provides welcome boost

Deliveroo Share Price

Deliveroo suffered one of the worst debuts in London history as its shares fell by 26% when the food delivery company came to the market at the end of March. According to data from Refinitiv, Deliveroo was trading as low as 271p within the first 20 minutes of trading, way lower than the offering price of 390p. The UK-headquartered company priced 384.6m shares at 390p each, the bottom of its target range, meaning Deliveroo was valued at £7.6bn, which is the highest in London since Glencore in 2011.

Since that day it has been more of the same. On 26 April Deliveroo shares were valued at 228p. However, over the past few days the company has regained some ground, moving up for four consecutive days. This follows Deliveroo entering a two-year partnership with Waitrose to deliver groceries. The question now is whether or not Deliveroo can sustain this investment and entice investors.

Waitrose

After a successful trial of the service, Waitrose and Deliveroo came to an agreement over a two-year partnership for rapid home deliveries. The British supermarket confirmed it would be growing Deliveroo’s service from 40 to 150 stores across the country before the end of summer.

The new partnership comes on the back of an overall increase in the number of home deliveries of groceries during the pandemic, as such orders now make up 14% of the market, up by double since the beginning of 2020. Waitrose customers will be able to order from an increased range of 750 to 1,000 products and have them delivered in 20 minutes to addresses from London to Scotland.

Outlook

In mid-April Deliveroo posted healthy Q1 results, including a fourth consecutive quarter of growth. While its orders were up by 114%, compared to the same period a year before, up to 71m. While the IPO wasn’t overly successful, the funds raised will go along way to securing its near-term future, as will its recent results and the Waitrose news.

However, the company is expecting a slowdown once lockdowns are gone, while it still expects customer spending on its food delivery app to grow by 30-40% in 2021. Other issues ongoing disputes between the company and its workers over labour rights. The company is facing increasing pressure over its employment practices, which could put investors off.

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