Maitland/AMO Morning Monitor – Tuesday 8 October 2019

8th October 2019

What really matters... COVID-19

The FTSE, CAC and DAX are expected to open up.

Asian markets are broadly higher today with shares in Japan leading the region.

Stock market moves

In other news

  • HKEX drops £32bn bid for London Stock Exchange after failing to convince LSE management of its vision
  • The US will withdraw forces from Syria in advance of a planned Turkish military offensive
  • HM Revenues & Customs has warned that businesses would face an annual £15bn bill for filling in customs forms in the event of a no-deal Brexit

Politics today

  • MPs on the PACAC committee will take evidence from both legal and constitutional experts on prorogation
  • Boris Johnson will host a meeting with European Parliament President David Sassoli

Corporate announcements

* Maitland Client

easyJet PLC Trading Update and Pre-Close Statement
  • Cost performance remained strong and in line with expectations despite the difficult Q4 disruption environment.
  • The company expects to deliver Full Year 2019 headline profit before tax of between £420m and £430m. This is in the upper half of the previous guidance range.
  • Passenger numbers for the full year increased by 8.6% to 96m, driven by an increase in capacity of 10.3% to 105m seats.
  • Johan Lundgren, CEO, said: “easyJet has continued to perform in line with expectations, despite challenging market conditions. Our implementation of initiatives in the fourth quarter to optimise yield has led to solid revenue performance with total revenue per seat at constant currency set to increase for the full year.”
Ferrexpo PLC* 3Q 2019 Production Report
  • 9M 2019 total pellet production up 1.7%.
  • 9M 2019 production of high quality 65% Fe pellets up 4.2%.
  • Refurbishment of the Group’s final pellet line to begin on 28 October 2019 for approximately 55 days.
  • Given the current market environment, Ferrexpo’s full year production will likely be in the range of 10.4MT to 10.6MT compared to previous guidance of 10.6MT.
Electrocomponents PLC Trading Statement
  • Continued strong performance in Industrial led to 5% like-for-like Group revenue growth in both Q2 and H1.
  • The company expects H1 gross margin to be down year on year, by around 0.8%, impacted primarily by mix. The company expects a more modest year-on-year decline in H2 as strong growth in OKdo will be partially offset by purchasing and pricing actions.
  • Lindsley Ruth, CEO, said: “Our relentless focus on customer service, digital leadership and sales force effectiveness has been key in driving market share gains even in these more uncertain markets. We are pleased with our performance in H1 and remain on track to deliver good progress for the year.”
PageGroup PLC Trading Update
  • The company delivered third quarter gross profit of £216.7m, up 2.1% in constant currencies.
  • Given the heightened political and macro-economic challenges seen in the quarter, together with the limited forward visibility, the company currently expects 2019 operating profit to be in the range of £140m to £150m.
  • Steve Ingham, CEO, said: “The majority of the Group’s regions were impacted by increased macro-economic and political uncertainty in Q3. Consequently, Group gross profit growth slowed to 2.1% in constant currencies from 7.4% in Q2. Looking ahead, the deterioration in trading conditions seen during Q3 across the majority of our regions is anticipated to continue.”
Diploma PLC Directorate Change
  • Nigel Lingwood has informed the Board that he plans to retire as Group Finance Director.
  • Nigel will remain with the Group for a period of 12 months which will ensure that there is sufficient time to allow a thorough search process to take place and a smooth transition of responsibilities.
  • Johnny Thomson, CEO, said: “Nigel has been instrumental in creating Diploma as it is today – a successful business model, with strong organic growth augmented by excellent acquisitions, delivering impressive shareholder value. He has been a fantastic support to me as I have got to know the Group.”