Top News: easyJet starts ramping-up capacity as travel restrictions ease
EasyJet said it is bringing on significant more capacity as the UK and Europe ease travel restrictions, igniting hope that airlines will be able to capitalise on the peak summer travel season following the toughest year in history for the industry.
The airline carried 3 million passengers in the three months to the end of June after easyJet operated at 17% of pre-pandemic capacity, slightly ahead of the 15% guided. Notably, the pandemic meant easyJet’s entire fleet was grounded for all but two weeks of the period.
Revenue in the quarter totalled £212.9 million, up from just £7.2 million the year before. Although flattered by the weak comparatives, that came in slightly better than the £206.4 million expected by analysts and compares favourably to the first-half of the financial year.
The airline reported a headline loss before tax of £318.3 million in the period, slightly narrower than the £346.8 million loss booked a year earlier.
With the environment still tough, easyJet has continued to focus on managing costs. It said its cash burn in the quarter was around £34 million per week, better than the £40 million guidance provided in the first quarter. The airline reiterated that it expects to deliver £500 million worth of savings over the full-year.
The company said it is expecting activity to pick-up significantly in the fourth quarter of the financial year, with easyJet hoping to operate at 60% pre-pandemic capacity levels. It said it remains flexible to ramp capacity up-or-down as necessary.
easyJet shares were trading 1.3% higher in early trade this morning at 777.2p.
‘At this stage, given the continued level of short-term uncertainty, it would not be appropriate to provide any other financial guidance for the remainder of the 2021 financial year. Customers are booking closer to departure and visibility remains limited,’ easyJet warned.
Less than half of its fourth-quarter schedule has been booked currently compared to 65% the year before, demonstrating that people are booking with much less notice. That is mostly due to the complex restrictions placed on travel in the UK and Europe.
The airline said it was switching capacity from UK-touching to EU-touching for this summer to capitalise on the strongest traffic flows, and is increasing capacity for flights to countries on the UK’s amber list after the country decided double-vaccinated passengers could fly there without the need to quarantine on their return.
‘As a result of the current divergence in government travel policies, easyJet's bookings for this summer are heavily skewed towards continental Europe. Whilst our business is normally split 50:50 between the UK and Europe, at present two thirds of bookings are coming from Europe,’ easyJet explained.
Wise delivers strong growth in first update since listing
Wise said it delivered strong double-digit growth in volumes and revenue during the first quarter of 2021 in its first update since completing its landmark listing.
Wise completed its initial public offering earlier this month, priced at 800p per share and earning an £8 billion valuation to make it the biggest float of the year and the largest-ever tech listing in London.
The company said volumes of money being transferred soared 54% year-on-year in the first quarter of its financial year to £16.4 billion from £10.7 billion. That was also up 5% from the previous quarter. Revenue followed 43% higher to £123.5 million from £86.3 million the year before, increasing 6% from the previous quarter. The take-rate, which measures revenue as a percentage of volumes, came in at 0.75% compared to 0.81% the year before, but held steady quarter-on-quarter.
Wise said 3.7 million customers used its platform to complete transactions during the quarter. Wise said the number of personal customers grew 28% year-on-year while business customers soared 56%. Volumes outpaced customer growth as customers sent more money per transaction, which had been depressed the year before due to the pandemic.
‘We are pleased to have started FY2022 in line with our expectations and expect to continue in line with our forward-looking guidance, including for revenue growth of low to mid 20s on a percentage basis in FY2022,’ said Wise.
Wise shares were trading down 1.3% in early trade this morning at 925.2p.
AG Barr expects profits to grow past pre-pandemic levels
Soft drinks maker AG Barr said it expects profits to return to pre-pandemic levels and beat expectations in the current financial year.
AG Barr, which owns drinks brands including IRN-BRU and Rubicon, said profit for the financial year to the end of January 2022 will be ‘slightly ahead’ of the £37.4 million delivered in the year to the end of January 2020, before the pandemic hit. That would also be an improvement from last year’s profit of £32.8 million, which was hit by the pandemic.
‘At our full year results on 30 March 2021 we communicated that the business was in strong financial health, with our brands and business poised for growth on a like for like basis,’ AG Barr said.
AG Barr shares were up 1% in early trade this morning at 533.5p.
‘Trading since then has been better than anticipated, driven by a combination of factors, some Covid related, including customer restocking, in the hospitality sector in particular, and some associated with underlying brand momentum, such as the positive performance of recent innovation launches,’ it added.
A first-half trading update will be released on Tuesday August 3.
CVS Group growth accelerates and margins expand
CVS Group said growth accelerated and margins expanded during a tough year for vets during lockdown, and said it is looking forward to welcoming back customers inside its practices after the last of restrictions were lifted by the government on Monday.
The veterinary services provider said like-for-like sales grew by 17.4% in the year to the end of June, a significant acceleration from the 0.7% growth booked the year before. As a result, CVS Group said it expects adjusted Ebitda to come in higher than market expectations, which is impressive considering expectations were raised back in March.
CVS said its adjusted Ebitda margin for the full year will be higher than the 18.4% reported in the first half, which bodes well considering it delivered a 16.6% margin in the last financial year.
CVS Group shares were up 2.7% in early trade this morning at 2317.5p.
The company said it expanded the number of vets on its books by 10% during the year and is continuing to advertise new positions.
‘Following the gradual easing of lockdown restrictions, we are pleased to be able to welcome clients back into practice reception areas from the start of the new financial year. In light of the UK Government announcing an end to substantive restrictions from 19 July 2021, clients will also now be welcomed back into practice consulting rooms, improving the overall customer experience,’ said CVS.
‘We look forward to continuing our growth trajectory as we head into the new financial year and have further plans to improve our level of clinical care through investment in our people and our specialist facilities. We are also well placed to pursue further targeted acquisitions,’ CVS added.
Preliminary results for the year will be released on Thursday September 23.
Anglo American tweaks guidance as production rises
Anglo American said it largely increased production of most commodities during the second quarter of 2021, with diamond output more than doubling, as it tweaked its guidance for the rest of the year.
‘We have delivered a solid operational performance supported by comprehensive Covid-19 measures to help safeguard the lives and livelihoods of our workforce and host communities. We have generally maintained operating levels at approximately 95% of normal capacity and, as a consequence, production increased by 20% compared to Q2 of last year, with planned higher rough diamond production at De Beers, as well as strong plant performance at our Los Bronces copper operation in Chile and higher throughput at our Mogalakwena platinum group metals mine in South Africa,’ said chief executive Mark Cufitani.
The company said it produced 8.2 million carats of diamonds in the quarter compared to only 3.5 million the year before as Anglo American ramps-up output to meet increased consumer demand. Production was up 37% in the first half as a whole at 15.4 million carats. Anglo American tightened its guidance for the full year to 32 to 34 million carats from its previous target of 32 to 33 million.
Copper output in the quarter increased 2% to 170,000 tonnes and nudged up 5% in the first half to 330,000 tonnes, with the increase predominantly driven by a strong performance at Los Bronces. Anglo American narrowed its full year guidance to 650,000 to 680,000 tonnes from 640,000 to 680,000 tonnes beforehand.
Platinum group metal production jumped 59% in the second quarter to 1.05 million ounces and increased 28% in the first half to 2.07 million. Production benefited from weak comparatives when output was hit by the pandemic last year as ell as a significant increase from Mogalakwena. The company is now aiming to produce 4.2 to 4.4 million ounces of PGMs this year, having nudged down from its previous target of 4.2 to 4.6 million ounces.
Iron ore output in the quarter edged-up 6% to 15.7 million tonnes thanks to a strong performance at Kumba in South Africa. Production was up 3% in the first half at 31.9 million tonnes and Anglo American is aiming to produce 64.5 to 66.5 million tonnes over the full year, having previously said it could make up to 67.5 million tonnes.
Lastly, metallurgical coal output plunged 25% in the second quarter to 3.0 million tonnes and fell 20% in the first half to 6.2 million tonnes. Output is building from a low base following the restart of mining at Moranbah at the start of June and the ongoing development work at Grosvenor, which is expected to restart production toward the end of the year. Guidance for the full year remains unchanged at 14 to 16 million tonnes.
Anglo American shares were trading 1.7% higher this morning at 2825.3p.
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