Top News: Wizz Air expects ‘transition year’ to generate further losses
Wizz Air warned it expects another tough year as travel restrictions continue to plague the industry, which will cause it to report yet another annual loss after sinking deep into the red over the past 12 months.
The low-cost airline saw passenger numbers plummet 75% in the year to the end of March, causing a similar drop in revenue to EUR739 million. Its underlying loss of EUR482.5 million turned from a EUR344.8 million profit the year before, in line with its guidance range. The reported net loss of EUR576 million was toward the lower-end of its target range.
Wizz Air shares were trading 1.1% higher in early trade this morning at 4936.0.
Wizz Air said it was ‘one of the most challenging years’ for the aviation industry but said it managed to protect most of its employees by focusing on preserving cash and cutting costs. It ended the year with EUR1.61 billion in cash, which should be enough to allow the airline to survive until a recovery begins considering it bunt through EUR84 million in cash during the final three months. It said it does not see any reason to raise additional liquidity for general purposes going forward.
Wizz Air said it expects to be operating at around 30% of its capacity in the first quarter of the new financial year and confirmed it will resume all cash-generative flights when it is given the green light by governments. Wizz Air revealed in a separate statement that it carried 66% fewer passengers in May 2021 compared to the year before.
‘We are cautiously optimistic about the recovery of the business, which has started later than what we would have liked as COVID-19 restrictions have remained in place longer than anticipated. Therefore, F22 will continue to be a transition year,’ said chief executive Jozsef Varadi.
Despite the anticipated start of a recovery this year, Wizz Air expects to remain loss-making over the full-year.
‘Whereas the recovery pattern continues to be difficult to forecast, the trends are encouraging and we are ready as ever. We have prepared the company to be an even more formidable player and to take advantage of the next phase of market opportunities that await post pandemic. The investments we have made in our fleet and in our network over the past 12 months will soon yield results,’ Varadi added.
Wetherspoons boss calls on UK to adopt ‘reasonably liberal immigration system’
The founder and chairman of pub chain Wetherspoons has called on the UK government to introduce a ‘reasonably liberal immigration system’ for EU workers to help companies that are suffering from a shortage of workers.
Tim Martin, an ardent supporter of Brexit, told the Telegraph that such a system would be a ‘plus for the economy and the country’ and help counter the UK’s low birth rate. A visa system could make it easier for the hospitality industry to recruit workers from the EU, many of which have left the country since Brexit with more having left due to the pandemic.
‘America, Australia and Singapore have benefitted for many decades from this approach. Immigration combined with democracy works,’ Martin said.
The Office for National Statistics revealed a 70% surge in job vacancies within the accommodation and food industries in April compared to March, with hospitality businesses stepping up their search for staff as lockdown restrictions began to ease.
Wetherspoons shares were trading 0.3% lower in early trade today at 1356.5.
Airtel Africa to sell telecoms towers in Tanzania
Airtel Africa has agreed to sell a portfolio of telecoms towers for $175 million to a joint venture between SBA Communications Corp and its UK partner Paradigm Infrastructure.
The company said it is offloading around 1,400 towers owned by Airtel Tanzania that form part of its wider telecoms infrastructure network. It will receive $157.5 million upfront when the deal is completed in the second half of this year, with the balance being paid in instalments. Notably, Airtel Tanzania will continue to develop and operate the equipment on the towers under a separate lease agreement with the buyers.
‘The transaction is the latest strategic divestment of the group's tower portfolio as it focusses on an asset-light business model and on its core subscriber-facing operations,’ said Airtel Africa.
Airtel Africa is focused on growing its subscription services such as voice, data and mobile money services.
Around $60 million of the proceeds will be used to invest in its network and sales infrastructure in Tanzania and to make a payment to the country’s government as agreed under a deal struck back in 2019. The remainder of the funds will be used to deleverage the business and pay down debt.
Airtel Africa shares were trading 0.4% higher in early trade this morning at 80.0.
Kingfisher links new debt facilities to sustainability targets
Kingfisher, the home improvement retailer that owns the likes of B&Q and Screwfix, has secured a new £550 million revolving credit facility that is linked to ‘ambitious sustainability and community-based targets.’
The company said the new credit facility, which will last for three years but could be extended by up to one to two years further, will offer a lower interest rate if it hits specific targets. It replaces two existing facilities, a £225 million one that expires in March 2022 and a £550 million facility due to expire in August 2023.
‘This revolving credit facility shows our commitment to integrate our responsible business principles into all aspects of our business. Our Responsible Business plan is an integral part of our Powered by Kingfisher strategy and this facility links our ambitious sustainability and community targets with our financing activities,’ said chief financial officer Bernard Bot.
The targets focus on three areas. The first is climate change and concentrates on cutting carbon emissions from the business, particularly from the fuel used by its fleet, natural gas compression used in stores, and the emissions caused by electricity used to power its operations.
The second focuses on Kingfisher creating more forests than it uses by the 2026 financial year and sets an ambition to be using 100% sustainable wood and paper for all of its products. Currently, just over 80% of its products meet this criteria.
The third and final area is to do with the ‘fight to fix bad housing’. The facility will offer better rates to Kingfisher if it can help over 2 million of the most vulnerable people – more than double its previous target – with their housing needs by 2026 through its community contributions. Over 760,000 people have benefited from such schemes since it was launched back in the 2016/17 financial year.
Kingfisher shares were trading 0.3% higher in early trade this morning at 360.3.
Assura reaches agreement on new ambulance hub
Assura has reached agreement on development funding for a new £22 million ambulance hub in the West Midlands.
The new facility is being leased to the West Midlands Ambulance Service University NHS Foundation Trust, which is the second-largest ambulance trust in England, on a 30-year lease with rent being reviewed every five years and linked to RPI.
The facility will contain essential services for paramedics concentrating on helping people in hazardous areas, such as at extreme heights, in confined spaces or in the water. It will have space for 70 ambulances in total and also include a warehouse to store specialist equipment and training facilities.
Construction will start in the third quarter of 2022 and take around 15 months to complete, Assura said.
‘The West Midlands Ambulance Service serves over 5.6 million people, providing critical front-line and Patient Transport Services. An effective and modern Ambulance Hub will be critical to the delivery of this essential service, and Assura, with its deep NHS and healthcare experience, is well positioned to provide the required space,’ the company said.
‘This development is illustrative of the NHS's demand for modern, specialist real estate across its operations. The COVID crisis has only increased this demand, and Assura is well placed to provide the specific infrastructure that this country needs in a post-COVID environment,’ it added.
Assura also provided a brief update for the rest of the business covering the first two months of the year, stating it has completed the development in Ware and is currently on-site at 16 other developments. It has so far sold-off 10 assets for £15 million and made four acquisitions worth £22 million.
Assura shares were trading 0.7% higher in early trade at 74.8.
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