24th Sep 2019 08:01
(Alliance News) - Anglo-German travel company TUI said Tuesday it is assessing the short-term impact of smaller peer Thomas Cook's insolvency on its financial 2019 results.
TUI reiterated its financial 2019 underlying earnings before interest, tax and amortisation guidance, given in March, of negative 26% compared to underlying EBITA of EUR1.18 billion in financial 2018.
TUI said its Holiday Experiences unit was delivering strong results, but its Markets & Airlines arm was facing "a number of ongoing external challenges". These included the grounding of the Boeing 737 MAX aircraft, airline over-capacity, and continued Brexit uncertainty. However, the Summer 2019 season is "closing out in line with expectations", TUI noted.
Looking ahead to the coming financial year, TUI said it intends to be more cost competitive in Markets & Airlines in financial 2020.
"Where TUI customers are booked on Thomas Cook Airlines flights and these are no longer operated, replacement flights will be offered. We are currently assessing the short-term impact of Thomas Cook's insolvency under the current circumstances, on the final week of our 2019 financial result," said Chief Executive Officer Friedrich Joussen.
Meanwhile, Irish carrier Ryanair Holdings said its cabin crew based in the UK voted by a majority of 80% in favour of a four-year Collective Labour Agreement, to cover all Ryanair's directly employed cabin crew in the UK until March 2023.
Ryanair said the CLA is to deliver a new pay structure, with increased guaranteed income. The agreement was negotiated between Ryanair and the union UNITE.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.2% at 7,337.93
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Hang Seng: up 0.2% at 26,270.42
Nikkei 225: closed up 0.1% at 22,098.84
DJIA: closed up 14.92 points, 0.1%, at 26,949.99
S&P 500: closed flat at 2,991.78
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GBP: unchanged at USD1.2440
EUR: soft at USD1.0990 (USD1.1000)
Gold: down at USD1,521.20 per ounce (USD1,523.83)
Oil (Brent): flat at USD64.36 a barrel (USD64.42)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Tuesday's Key Economic Events still to come
0930 BST UK public sector finances
1100 BST UK CBI industrial trends survey
1000 CEST Germany Ifo business climate index
0855 EDT US Johnson Redbook retail sales index
0900 EDT US monthly house price index
0900 EDT US S&P CoreLogic Case-Shiller indices
1000 EDT US Richmond Fed business activity survey
1000 EDT US consumer confidence index
1630 EDT US API weekly Statistical Bulletin
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UK Prime Minister Boris Johnson failed to achieve a "New York breakthrough" on Brexit in a meeting with European Council President Donald Tusk. Johnson had downplayed his chances of securing a new deal ahead of meetings with key EU leaders during the United Nations General Assembly. After leaving their bilateral meeting on Monday, Tusk lamented that there had been "no breakthrough" and that there is "no time to lose" with the October 31 deadline looming.
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The UK's highest court will give its historic ruling on Tuesday morning over the legality of the five-week suspension of Parliament. Prime Minister Johnson, who has been accused of an unlawful "abuse of power", will be in the US when the Supreme Court announces its findings, following an unprecedented hearing last week. Eleven justices have been asked to determine whether his advice to the Queen to prorogue Parliament, for what opponents describe as an "exceptionally long" period, was unlawful. The Supreme Court is going to give its decision at 1030 BST. Johnson was asked whether he was nervous about the Supreme Court judgment in an interview in New York, and replied: "It takes a lot to make me nervous these days."
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Japan's economy showed signs of "robust" growth in September, but suffered slowdowns in both its manufacturing and services sectors. The Jibun Bank flash composite purchasing managers' index reading decreased in September to 51.5 from 51.9 in August. "The resilience of Japan's service sector to the struggles of the country's manufacturers continued to shine through during September," said IHS Markit economist Joe Hayes. "As a result, it's looking like Japan will boast what will be a robust rate of growth in the current climate for the third quarter."
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US Secretary of State Mike Pompeo has expressed his gratitude to Germany, France and Britain, after the three countries released a joint statement saying Iran "bears responsibility" for the recent attack on a Saudi Arabian oil plant. "The US thanks our close friends, UK, France, and Germany, for their clear articulation of Iran's sole responsibility for the act of war against Saudi Arabia and its impact on the region and the world," Pompeo wrote on Twitter. Iran has denied involvement in the oil plant strike on September 14, which was claimed by Iranian-backed Houthi rebels in Yemen, but the US has doubted that narrative.
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BROKER RATING CHANGES
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PEEL HUNT CUTS WEIR GROUP TO 'HOLD' ('BUY')
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LIBERUM CUTS ROYAL MAIL TO 'SELL' ('HOLD')
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COMPANIES - FTSE 250
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Soft drinks maker AG Barr said it is on course to deliver a full-year performance in line with its revised expectations, following a profit warning in July. For the six months to July 27, revenue fell to GBP122.5 million from GBP136.9 million last year, and pretax profit declined to GBP13.5 million from GBP18.2 million. The company said it incurred exceptional costs associated with a restructuring programme which started during the period. AG Barr raised its interim dividend to 4 pence from 3.90 pence last year. "The first half of 2019 has been disappointing," the company said. "However, it was always expected to be a year of pricing transition for the business which would lead to elevated levels of risk. We now have plans in place to address our specific brand related challenges and to ensure that the business is appropriately scaled to perform in the current market."
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Merchant bank Close Brothers said it delivered a solid annual performance, as it also announced the departure of its chief executive. For the financial year ended July 31, net interest income rose to GBP505.7 million from GBP486.1 million last year and its loan book on July 31, was up 5.7% to GBP7.6 billion from GBP7.2 billion a year ago. The company's common equity tier one capital ratio increased to 13.0% and return on opening equity "remained strong" at 15.7%. Close Brothers is proposing a full-year dividend per share of 66.0p, up 5%. Close Brothers said Chief Executive Preben Prebensen will step down but remain with the firm for 12 months to ensure a smooth handover. The company has begun the search for a new CEO and is looking both internally and externally.
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COMPANIES - OTHER MAIN MARKET AND AIM
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Thousands of stranded Thomas Cook Group passengers will be repatriated on Tuesday as the rescue operation continues into its second day. Holidaymakers were being brought home amid questions over the multimillion pound sums received by the bosses of the firm prior to its collapse. The conduct of the directors will come under the microscope as the Insolvency Services fast-tracks an investigation into the circumstances surrounding the company going into Liquidation. After that happened in the early hours of Monday, there was anger at other travel firms and airlines hiking their prices. Around 15,000 holidaymakers were flown home on an estimated 61 flights on Monday, after the travel company collapsed. Some 150,000 tourists will be brought home over the next two weeks in a UK Civil Aviation Authority flight programme costing GBP100 million.
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Metro Bank has been forced to withdraw a GBP200 million bond sale, the Financial Times reported. The challenger bank needs to raise new debt by the end of 2019 to meet EU regulations, the newspaper noted, but investor confidence has been knocked by the company's financial misreporting issue back in January. The FT said Metro Bank wanted to raise between GBP200 million to GBP250 million, but had only received GBP175 million of orders by mid-afternoon on Monday.
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COMPANIES - INTERNATIONAL
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Anheuser-Busch InBev said it will proceed with the listing of its Asia Pacific subsidiary, Budweiser Brewing Co APAC, on the Hong Kong Stock Exchange at HKD27.00 per share. The brewer also said it is issuing an additional 189.4 million shares to meet market demand, bringing the total offering amount to 1.45 billion shares. After exercising this upsize option, Budweiser APAC's IPO is expected to raise HKD39.2 billion, or about USD5 billion. AB InBev will still hold an 89% interest in Budweiser APAC following the listing. The new shares are expected to begin trading in Hong Kong on September 30. AB InBev intends to apply all of the net proceeds from the offering to repay debt.
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US aeroplane maker Boeing launched a compensation fund on Monday for the relatives of those who were killed in crashes involving the company's 737 MAX model in Indonesia and Ethiopia. The families of the 346 victims are each to receive USD144,500, according to a statement by the fund, which is managed by prominent US attorney Ken Feinberg. Boeing said in July that it would set aside USD100 million in financial aid for the families, half of which is to be made available in the short term. Also on Monday, US Federal Aviation Administration said it would be up to individual countries to decide whether to give the green light again for the Boeing 737 MAX jet, over six months after the aircraft was grounded following a pair of deadly crashes. The FAA said "each government will make its own decision to return the aircraft to service, based on a thorough safety assessment."
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An EU court is to rule in two illegal state aid cases on Tuesday, one involving the US coffee giant Starbucks in the Netherlands, and another concerning Luxembourg and the financing arm of Italian carmaker Fiat Chrysler Automobiles. Judges at the EU General Court in Luxembourg are to rule on challenges filed against the two 2015 European Commission orders to compensate for unpaid taxes worth between EUR20 million to EUR30 million each. The EU executive, which acts as the bloc's competition watchdog, concluded that both EU member states had awarded the two multinationals illegal tax advantages.
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Tuesday's Shareholder Meetings
Versarien
Knights Group
Park Group
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By Tom Waite; [email protected]
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