EasyJet (EZJ) shares jumped by 10 per cent after the low-cost carrier said bookings in the last three months of 2022 were strong, with passenger growth up by 47 per cent on the pandemic-disrupted period a year earlier.
The company declared a headline loss before tax of £133mn for the quarter, a £100mn improvement on the same period last year, and said it was confident of beating the market’s current expectations of a pre-tax profit of £126mn for the 12 months to September 30.
The airline’s new holiday arm, launched in late 2019 but which only really began in earnest last year, recorded a profit of £13mn, up from a loss of £1mn a year earlier. MF
Read the full update here
Brickmaker Forterra (FORT) said its 2022 financial performance would be “slightly ahead” of expectations, and of pre-pandemic levels.
Revenue increased by 21 per cent last year, to around £450mn, driven by higher pricing to recover costs. Cumulative brick selling prices rose by 50 per cent, the company said. Sales volumes were “broadly” in line with 2021, albeit hampered by availability through part of the year. A new factory at Desford is set to open within the next few months.
Outgoing chief executive Stephen Harrison said there were signs brick demand had eased in the final quarter due to uncertainty around new housing starts but added that UK producers are “ideally placed” to displace imported bricks if the market softened. Forterra shares rose by 3 per cent in early trading. MF
Microsoft (US: MSFT) was downbeat as revenue growth decelerated to a six-year low. Shares fell in the after-hours market following the earnings release, which suggests the outlook for the broader tech sector remains soft. CFO Amy Hood said a slowdown across commercial lines seen in December would continue into 2023. Decelerating growth in the cloud business and corporate software is hardly a surprise, but investors will be keen to see how this plays out longer term and how quickly it can bounce back or whether this is the ‘new normal’. NW
Read more on Microsoft here
Shares in Ascential (ASCL) jumped by a quarter this morning, after the information and events company announced plans to split up the business. The board plans to hive off the digital commerce division and turn it into a publicly traded company in the US. It also wants to sell off its trend forecasting business WGSN, allowing the UK-listed group to focus exclusively on events.
Ascential said a “significant proportion” of WGSN sale proceeds would be returned to shareholders. It added that the sale would provide growth capital for other parts of the company. JS
Read the full story here
Engineering consultancy Ricardo (RCDO) bought a 93 per cent share of E3-Modelling, a consultancy that develops large-scale models for the energy, environment and transport sectors, for £24mn.
Athens-based E3M creates models for clients including the European Commission, national governments and energy regulators. Ricardo is paying six times E3M’s revenue of £4mn for 2022, or more than 13-times its cash profit of £1.8mn. However, the company says E3M currently only operates in Europe, so it can expand its offer globally. Broker Peel Hunt lifted its earnings per share forecast for Ricardo by 1 per cent for the year to June, and by 4 per cent for the following year. MF
Homeless accommodation landlord Home Reit (HOME) has confirmed that its largest tenant is not paying rent, adding to the growing list of issues with the company’s rent roll. Accommodation provider Lotus Sanctuary, which accounts for 12.2 per cent of Home Reit’s rent roll, did not pay rent for the quarter to 30 November last year. The news comes after four of Home Reit’s other tenants, accounting for a further 25 per cent of Home Reit’s rent roll, aired disagreements with Home Reit over rent relief.
Should Lotus enter administration, Home Reit said that its rental obligations would be passed onto another tenant – a practice which Home Reit has done before and has drawn criticism. ML
Broken home? Investigating the controversy surrounding Home Reit
Warehouse developer Tritax Big Box Reit (BBOX) posted a 7 per cent drop in the value of its portfolio, becoming the latest landlord to suffer from the downturn in the property market. Its warehouse assets were valued at £5.5bn as of the end of 2021 but this fell to £5.1bn as of the end of 2022. The company said rising interest rates and inflation had weakened the investment market and was thereby driving down property values. ML
The good news for Reits after UK property's worst month ever
JD Wetherspoon’s (JDW) sales are still lagging pre-pandemic levels. The pub operator said that like-for-like sales for the 25 weeks to 22 January were down by 1 per cent against the last pre-Covid comparator, though they were up by 13 per cent against last year. The company has been selling off sites – two pubs were opened in the period while 10 were sold. While chair Tim Martin is “cautiously optimistic” about full-year trading, he also has returned to his mantra about the “the vast disparity in tax treatment between pubs and restaurants and supermarkets.” Martin has argued supermarkets are his pubs’ biggest competitor, not other licensed watering holes. JDW shares were down by 2 per cent in early trading. CA
Read more on JD Wetherspoon's here
Strong order book propels Ergomed to revenue growth
Ergomed (ERGO), a provider of services to the pharma and biotech sectors, has announced it met market expectations of its performance in the 2022 financial year. In a trading update, the company also boasted of 22.5 per cent year-on-year revenue growth to £145mn. While currently debt-free, the company has secured £80mn in debt facilities to support further M&A. It acquired pharmaceutical consultancy Adamas in February last year. Shares were down 2 per cent by mid-morning, indicating that markets may already have priced in a successful year for Ergomed. JJ
We put Ergomed forward as a buy idea in October