21st Jul 2016 07:32
LONDON (Alliance News) - London stock prices started lower Thursday, with easyJet leading FTSE 100 fallers after it reported a fall in revenue in the third quarter of its financial year.
The low-cost airline said flight cancellations resulting from terrorist attacks, bad weather and air traffic control strikes offset a rise in seat capacity.
easyJet said total revenue in the quarter ended June 30 fell by 2.6% year-on-year to GBP1.20 billion, as revenue per seat declined by 7.7% to GBP54.54, despite the number of passengers carried rising by 5.8% to 20.2 million and load factor increasing by 0.3 percentage point to 92%.
easyJet said the number of passengers carried was boosted by an increase in capacity of 5.5% to 21.9 million seats, but revenue declined as the increased seat capacity was offset by the impact on yield of overall market capacity and cancellations as a result of "significant external events".
Those events included the terrorist attacks in Brussels in March and the crash of an Egyptair flight in May, as well as air traffic control strikes, runway closures at Gatwick airport, and severe weather. They led to 1,221 cancellations in the period.
easyJet traded down 5.9%, while peer Ryanair Holdings was down 2.5%. British Airways-owner International Consolidated Airlines Group was down 3.8%.
The FTSE 100 index was off 0.3%, or 19.98 points, at 6,709.01. The FTSE 250 was down 0.2% at 16,984.26, but the AIM All-Share was up 0.1% at 737.00.
European markets were outperforming. The French CAC 40 index was up 0.1% and the German DAX 30 was up 0.4%.
In Asia, the Japanese Nikkei 225 index closed up 0.8%, the Shanghai Composite ended up 0.4%, and the Hang Seng in Hong Kong continues up 0.9%.
Leading the gainers in the FTSE 100 were mining stocks, rebounding from their declines from the last trading session.
Joining the miners in the winning column was Unilever, up 0.6%. The consumer goods giant reported growth in profit in the first half of 2016, but said sales fell due to negative movements in foreign exchange rates. The Anglo-Dutch company warned on tough market conditions for the remainder of the year.
Unilever said pretax profit in the first half grew by 0.8% to EUR3.64 billion from EUR3.61 billion a year before, but sales fell by 2.6% to EUR26.28 billion from EUR27.0 billion.
Unilever said consumer demand remained weak in the period with slowing volumes, but underlying sales were driven by market share gains across each of the four categories of Personal Care, Foods, Home Care and Refreshment. On a constant currency basis, sales rose by 5.4%.
In the FTSE 250, AO World was the top gainer, up 6.7%. AO World said it is on track with its long-term strategic plan, and expectations remain unchanged following the Brexit vote.
Euromoney Institutional Investor said trading has been in line with its expectations in the third quarter, with no significant impact from Brexit.
The FTSE 250 company, which publishes trade magazines covering a range of business sectors and runs events, said revenue in the quarter to the end of June fell 1.0% year-on-year to GBP104.7 million.
Though Euromoney benefited from dollar strength against sterling following the Brexit vote, this was offset by lower revenue from the disposal of its Gulf Publishing and Petroleum Economist titles in April.
Underlying revenue, stripping out currency effects and disposals, fell 1.0% in the quarter, an improvement on the 6.0% decline reported in the first half. The stock traded up 3.4%.
In the economic calendar, the main focus will be on the European Central Bank's monetary policy decision at 1245 BST, and the subsequent press conference with President Mario Draghi at 1330 BST.
Elsewhere UK retail sales and public sector net borrowing are at 0930 BST, US initial and continuing jobless claims are at 1330 BST, the same time as Philadelphia Fed Survey and the Chicago Fed national activity index.
By Neil Thakrar; [email protected]; @NeilThakrar1
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