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(Alliance News) - Ryanair said Friday it has reached agreement with its Irish pilots on a four-year deal that reduces pay by 20%, though this is restored over the four years.
The Irish labour accord follows a similar one with UK pilots earlier this week and includes productivity improvements and flexible working patterns.
"This agreement gives Ryanair a framework to flex its operation during the Covid-19 crisis and a pathway to recovery when the business returns to normal in the years ahead," the Irish budget carrier said.
It also has reached agreement with Irish and UK based cabin crew for 10% pay reductions, also restored over four years.
"We welcome this week's results in both Ireland and the UK of acceptance of a 4-year agreement on 20% pay cuts and productivity improvements on rosters and flexible working patterns to save the maximum number of Irish and UK pilot jobs," said Ryanair Chief Executive Officer Eddie Wilson.
On Thursday, Ryanair had reported its traffic in June dropped by 97% to 400,000 passengers versus the 14.2 million passengers it carried a year earlier. It operated just 2,800 scheduled flights in June versus its budgeted schedule of 79,600.
The stock was up 0.2% early Friday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.1% at 6,244.41
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Hang Seng: up 1.2% at 25,419.44
Nikkei 225: closed up 0.7% at 22,306.48
DJIA: closed up 92.39 points, 0.4%, at 25,827.36
S&P 500: closed up 0.5% at 3,130.01
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GBP: up at USD1.2476 (USD1.2465)
EUR: unchanged at USD1.1236
Gold: soft at USD1,774.80 per ounce (USD1,775.75)
Oil (Brent): up at USD42.74 a barrel (USD42.30)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Friday's Key Economic Events still to come
US Independence Day holiday observed. Financial markets closed.
0930 BST UK CIPS-Markit services purchasing managers' index
0955 CEST Germany services PMI
1000 CEST EU eurozone economic outlook
1000 CEST EU eurozone services PMI
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English holidaymakers can embark on overseas trips from Saturday as quarantine restrictions are lifted and travel advice is updated, PA reports. The 14-day self-isolation policy for people returning to or visiting England from destinations such as Spain, France, Italy and Germany is being lifted, the Department for Transport announced. Meanwhile, the Foreign & Commonwealth Office will exempt a number of countries from its advisory against all non-essential travel, which has been in place since March 17 due to the coronavirus pandemic. The change in travel advice comes into force on Saturday, while the quarantine policy will be amended from July 10. That means people who depart on Saturday and spend at least six days in certain locations will not need to self-isolate on their return. A full list of the countries deemed to pose "a reduced risk to the public health of UK citizens" will be published later on Friday.
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A legal challenge by airlines against the government's 14-day quarantine rule for passengers arriving in the UK has reached the High Court. British Airways, easyJet and Ryanair announced the legal action in June, saying the policy is "flawed" and will have a "devastating impact on British tourism and the wider economy". BA is part of International Consolidated Airlines Group. The airlines are seeking a judicial review of the rules and are bringing the case against Health Secretary Matt Hancock. The claim will be heard at the Royal Courts of Justice over two days, starting on Friday and continuing on Monday.
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Fragile consumer confidence is showing some signs of improving as many businesses prepare to open their doors again, according to an index. The findings could bring more hope to high streets as some businesses such as pubs and hairdressers prepare to reopen this weekend. While the overall mood remains downbeat, it is less negative than a couple of weeks earlier, GfK's Covid-19 "flash report" found. The index measures people's attitudes towards their households' personal finances, the wider economy and how consumers feel about splashing out on major purchases. The latest data, gathered between June 18 and 26, produced an overall score of minus 27. While this was still a negative score, it marked an improvement compared with a score of minus 30 in a previous survey carried out from June 1 to 11.
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BROKER RATING CHANGES
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GOLDMAN SACHS CUTS AB FOODS TO 'NEUTRAL' ('BUY') - TARGET 2360 (2250) PENCE
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GOLDMAN SACHS CUTS NEXT TO 'SELL' ('NEUTRAL') - TARGET 4400 (5300) PENCE
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COMPANIES - FTSE 100
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Land Securities noted it has only collected 60% of the net rent due on June 24 compared with 94% for the equivalent period last year. Landsec said GBP122 million of rent was due on June 24. "Covid-19 has resulted in some customers taking longer to pay their rent and we continue to have supportive and constructive dialogue with our customers," the company added. It noted 75% of the rent due on March 25 has now been received, with GBP30 million outstanding. As of June 30, 79% of Landsec's retail units were trading and 16 of its 18 leisure parks were open. "In line with government guidance, our shopping centres, outlets and retail parks are open, with encouraging levels of footfall," the company said. Landsec noted it remains in a financially "robust" position. At June 30, its adjusted net debt was GBP3.92 billion with GBP1.20 billion of cash and available facilities. As a result, Landsec is planning to reinstate its dividend following its interim results in November.
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Rio Tinto's Oyu Tolgoi mine in Mongolia is expected to see a 21 to 29 month delay for first production, which will increase the development capital needed for the project by between USD1.3 billion to USD1.8 billion from the original USD5.3 billion. The updated mine design is the result of the review announced by Rio Tinto in July 2019 when enhanced geotechnical and geological information obtained from drilling and mapping at depth suggested there may be "some stability risks" associated with the original mine design. Rio Tinto's ownership share is 33.5% of Hugo Dummett North and 29.5% of Hugo Dummett North Extension - both at Oyu Tolgoi in Mongolia. The probable ore reserves for Hugo Dummett North have been revised down to 400 million tonnes from 447 million at the end of 2019, while the North Extension seen its reserves revised upwards to 40 million tonnes from 32 million tonnes.
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COMPANIES - FTSE 250
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Plastic and fibre product supplier Essentra said its second-quarter performance saw a "profound impact" from the Covid-19 pandemic, but the hit was in line with internal expectations. Group like-for-like revenue declined 17% in April, but this improved as the quarter progressed. In May it was down 10%, whilst in June it is expected to only record a 1% drop. Essentra therefore expects that like-for-like second quarter performance will be down 10%, whilst its interim like-for-like revenue is guided to fall 9%. Looking ahead, Essentra anticipates some continued disruption to its trading in the coming months but believes that it is still too early to outline the full impact on full year financial performance.
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Rank Group said will begin the reopening of its Mecca bingo clubs from Saturday. Initially it will be opening 35 venues in England, with further 30 venues are expected to open in a phased approach throughout July and August including, when permitted, its venues in Scotland and Wales. The remaining 12 venues will remain closed until October whilst Rank Group assesses their ongoing viability. "Some restructuring of the cost base and format of these venues is likely to be necessary to allow them to reopen, including renegotiation of rents," the company said. Underlying operating profit for the year ended 30 June is expected to be at the lower end of its previously provided guidance range of GBP48 million to GBP58 million, Rank Group said. The company said this is due to the venues reopening costs being expensed. Monthly net cash outflow has also been in line with previous guidance, Rank Group added, with cash and available facilities at July 1 of about GBP140 million. With the reopening of Mecca, the company expects its monthly cash outflow will reduce from about GBP10 million per month to GBP7 million per month and to be cashflow positive upon the reopening of Grosvenor.
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COMPANIES - MAIN MARKET AND AIM
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Online trading platform CMC Markets said its "entire business has continued to perform very well" in its first quarter. Client trading activity remains around double that of the same period the year before, CMC added, with client income retention "materially" higher than the 82% reported in the first half of the previous financial year. Stockbroking net trading revenue also continues to benefit from the market conditions, the company added. As a result, net operating income for the first quarter of financial 2021 is in excess of that reported for the first half of financial 2020 of GBP102.3 million. "The board is confident that, even in the event that more normalised client trading activity returns, with the strong underlying performance of the business, 2021 net operating income will exceed the upper end of current market consensus," CMC added.
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Fuller, Smith & Turner was scheduled to release its annual results Friday but noted its auditors require "additional time to complete the formalities of the audit process". "The delay is a result of the auditors' internal processes, with Grant Thornton continuing to cite the complexities surrounding Covid-19 and related abnormal working arrangements as the reason behind the time taken to complete the audit," the pub chain said.
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COMPANIES - GLOBAL
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SoftBank and an Abu Dhabi sovereign wealth fund are in talks to back a UK government-led bid for collapsed satellite firm OneWeb, Sky News reported. Sky News said Japanese tech investor SoftBank and Mubadala, an investment arm of the Gulf state, have been holding talks with government officials about contributing hundreds of millions of pounds to a newly comprised shareholders group. The UK-led bidding team consists currently only of the government and existing OneWeb shareholder Bharti Enterprises, Sky News said, according to a person "close to the situation". Rival bidders for OneWeb are thought to include Telesat, a Canadian company. London-headquartered OneWeb filed for bankruptcy in March in the US, where most of its operations are located, after failing to secure new funding. It has 74 satellites and already counted Softbank as an investor.
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German car maker Daimler said it will take a stake of around 3% in Chinese battery cell manufacturer Farasis Energy (Ganzhou) Co. Daimler's Mercedes-Benz has launched a "far-reaching" strategic partnership with Farsis, including the development and industrialisation of cell technologies accompanied by "ambitious goals" for cost competitiveness. In order to be able to meet increasing demand for German Mercedes-Benz factories in the future, Farasis is building a plant for battery cells in Bitterfeld-Wolfen, creating up to 2,000 new jobs. Daimler Greater China is investing a "multi-million euro amount" as part of Farasis's IPO, a stake which is conditional upon regulatory approvals. The stake will allow Daimler the option to nominate a representative to the board.
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Friday's Shareholder Meetings
Marks & Spencer
Capital Gearing Trust
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By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.
