(Alliance News) - The following stocks are the leading risers and fallers within the main London indices on Monday.
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FTSE 100 - WINNERS
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J Sainsbury, up 1.4%. Jefferies raised the supermarket chain to Buy from Hold.
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FTSE 100 - LOSERS
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TUI, down 30%. The German tourism firm is suspending the "majority" of its operations over coronavirus fears, and made a request for state aid. TUI, which employs 70,000 people worldwide, said the move would affect its "package travel, cruises and hotel operations". The firm was taking "substantial cost measures" to mitigate the effect on its earnings, adding that it would apply for state aid guarantees "to support the business until normal operations are resumed". It also said it was withdrawing its profit forecast for the current financial year.
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International Consolidated Airlines, down 22%. The British Airways, Aer Lingus and Iberia owner said it is implementing further initiatives - following a raft of route suspensions - in order to combat the "challenging market environment" caused by the virus pandemic. The company said its first quarter capacity, or available seat kilometres, is expected to fall 7.5%. In April and May, IAG will reduce its capacity by about 75% compared to the year before. IAG is planning to ground surplus aircraft. In an attempt to cut operating expenses further, IAG will halt non-essential and non-cyber related IT spend, freeze recruitment and discretionary spending, implement voluntary leave options, temporarily suspend employment contracts, and reduce working hours. IAG also said that it is unable to give an accurate profit guidance for the 2020 due to the continued uncertainty on the potential impact and duration of Covid-19 virus. IAG also put its leadership succession on hold amid the crisis.
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easyJet, down 19%. The budget airline said it has undertaken "significant" cancellations, which could result in the grounding of the majority of its fleet. "European aviation faces a precarious future and there is no guarantee that the European airlines, along with all the benefits it brings for people, the economy and business, will survive what could be a long-term travel freeze and the risks of a slow recovery," easyJet said.
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Kingfisher, down 19%. The retailer said the Covid-19 outbreak did not dent sales in February and March but expects a hit from the store closures ordered in France and Spain. In February, the company's like-for-like sales were 7.6% higher. Excluding the benefit of the extra day for Leap Year, like-for-like sales were up 2.3%. February 29 fell on Saturday. In the first two weeks of March, up to and including this past Saturday, Kingfisher said sales "continued to be positive". All 221 of the company's Castorama and Brico Depot stores were closed on France, starting Sunday, until April 14 - following a decision by the French government to close all non-essential places used by the public. In addition, all 28 stores in Spain have closed until Sunday March 29, following the government's declaration of a two-week state of emergency.
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Carnival, down 12%. The cruise line operator has suspended operations of four additional North American cruise brands for one month. On Thursday last week, the cruise ship operator had said its Princess Cruises division would voluntarily pause its global operations for sixty days in response to the "unpredictable circumstances" evolving from the spread of Covid-19 virus. On Monday, Carnival said Carnival Cruise Line, Cunard North America, Holland America Line and Seabourn also will suspend operations for one month, putting a pause on new voyages.
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Associated British Foods, down 12%. Primark store closures are set to cost the high street fast-fashion chain GBP190 million in sales over the next month, AF Foods said. Stores in France, Spain, Austria and Italy, where governments have imposed lockdowns, have been forced into temporary closure. "These stores currently generate 30% of Primark's sales. From the date of this announcement, we had expected sales of GBP190 million from these stores over the next four weeks," AB Foods said. In the UK, which represents 41% of Primark sales, like-for-likes have declined over the last two weeks amid reduced footfall.
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Flutter Entertainment, down 9.7%. The gambling firm said its full-year earnings could take a GBP110 million hit if governments and sports regulators continue to cancel events until the end of August due to the spread of Covid-19. Sports events with high attendances have been postponed or even cancelled in recent days, and Flutter said this will "obviously have a material impact on the revenue and earnings". In 2019, 78% of its revenue came courtesy of global sporting events. Flutter's estimates assume that UK and Ireland shops remain open, with horse racing fixtures in the two countries, and Australia, continue to run. Should they not, its full-year Ebitda could take a further GBP30 million hit every month.
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FTSE 250 - LOSERS
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Tullow Oil, down 25%. RBC cut the firm to Underperform from Sector-Perform.
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Wizz Air, down 23%. The budget airline said it has suspended all flights to Poland until further notice due to the Polish government's decision to impose travel restrictions imposed on all foreign flights. "The travel ban imposed by the Polish government affects 20% of Wizz Air's capacity. At this point in time it is difficult to predict the duration and the impact of the Covid-19 pandemic on Wizz Air as governments across Europe are implementing strategies to cope with the virus, however, the company's ultra-low cost business model and our strong balance sheet with EUR1.3 billion of free cash provide a solid foundation and a significant competitive advantage in the current challenging environment for airlines, while also making us a long-term structural winner in the aviation sector," Wizz Air said.
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Future, down 18%. The UK Competition & Markets Authority said it would clear Future's GBP140 million acquisition of fellow magazine publisher TI Media, but only as long as the two companies sell three closely competing products. Future initially announced the acquisition of TI Media in late October 2019. The CMA in January said it would probe the deal. CMA's preliminary investigation found that the two companies competed closely in photography and football magazines and in technology websites. The regulator said customers who read football or photography magazines, or who use or advertise on technology websites, could face higher prices or lower-quality products due to the merger. Future owns titles such as FourFourTwo and Digital Camera, as well as technology websites such as Techradar.com and T3.com. TI Media owns titles such as WorldSoccer and Amateur Photographer, and technology website Trustedreviews.com.
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Network International Holdings, down 17%. The Middle East focused payments solutions provider said it is currently unable to assess the impact of measures taken by the Central Bank of UAE to lower transaction costs in response to Covid-19 virus outbreak. The Central Bank of UAE on Saturday set out new regulations to lower costs incurred by merchants when their customers pay for goods and services using debit or credit cards. A large proportion of the fees paid by the merchants pertain to the interchange fees, which are typically a pass-through cost for Network International. In response to the new measures, the company said it is "currently unable to assess the impact, if any, these measures may have on its business until further details are made available".
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Unite Group, down 12%. The student accommodation provider said it has not seen any noticeable impact to date on sales performance for the 2020-21 academic year from the new coronavirus outbreak and all of its student properties remain open. Unite said reservations to date are currently at 77%, flat year-on-year, and sales to and enquiries from international students remain in line with prior years. "We now plan to operate a reduced programme of summer business in 2020 given the risk of disruption to bookings. The removal of variable costs associated with our summer business will help to mitigate the impact on earnings, which we do not expect to be material," Unite added.
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OTHER MAIN MARKET AND AIM - WINNERS
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Tekcapital, up 59%. The company's portfolio company Belluscura has filed a patent application covering novel modular portable oxygen enrichment ventilation systems for treating patients suffering from chronic obstructive pulmonary diseases and acute respiratory distress syndrome brought on by such diseases as Covid-19. Tekcapital hold an 18.9% stake in Belluscura.
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OTHER MAIN MARKET AND AIM - LOSERS
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Countrywide, down 43%. Peer LSL Property Services confirmed it does not intend to make an offer for the real estate agent. Countrywide said its remains confident in its underlying business. "The company has seen a positive mood swing in public sentiment through the early part of 2020 which we have seen reflected in a strong start in agreed sales which are ahead of the board's expectations through February 2020. Whilst we have seen some softening in recent days as a result of Covid-19, it is too early to assess that impact," Countrywide added. LSL was down 13%.
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Laura Ashley, down 7.7%. The retailer said its sales in the six weeks to March 7 were 28% ahead of the same period the year before, and gross profit was up 22% year on year - with both coming in ahead of internal expectations. Laura Ashley said it has yet to see a dent in sales from Covid-19, but expects footfall to reduce and is monitoring the situation. Elsewhere, the company said its funding requirement review is ongoing but said it needs further funding to meet its ongoing working capital requirements. Majority shareholder MUI Asia is considering a GBP10 million loan, while Laura Ashley said it is in advanced discussions with a third-party lender for an additional GBP15 million. "If the group is unable to secure commitment for the requisite level of funding by the end of March to satisfy its ongoing working capital requirements and turnaround plan, then the company will need to consider all appropriate options," Laura Ashley added.
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Dialight, down 20%. The company swung to an annual loss in 2019, in a "disappointing" year. In 2019, Dialight recorded a pretax loss of GBP11.3 million, compared to a GBP7.6 million profit in 2018. Revenue slipped to GBP151.0 million from GBP169.6 million. Chief Executive Fariyal Khanbabi said: "From a financial perspective 2019 was disappointing, in large part due to the significant costs associated with exiting from our outsource manufacturer, as previously highlighted. However, we continued to make investments in operations and new products to better position us for future growth. Our operations in Mexico and Malaysia are now performing well and our product development continues at pace." He added: "Most of our end markets are likely to remain challenging short-term, exacerbated by the possible impacts of the Covid-19 virus."
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Gfinity, down 51%. The e-sports provider said the start of its second half has not seen commercial opportunities "materialise as expected", and discussions around strategic partnerships have also "not progressed as quickly as anticipated". "The challenging market conditions have now been exacerbated by the unprecedented impact of the Covid-19 virus which is forcing the postponement of all live sporting and esports events. Two major events that Gfinity designs and delivers for clients, and due to take place before July 2020, have now been postponed," Gfinity explained. As a result, its revenue for the year to June 30 will be lower than current market expectations.
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By Paul McGowan; paulmcgowan@alliancenews.com
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