R4E.L Share News (R4E)

LONDON (Alliance News) - EasyJet is the worst-performing stock in the FTSE 100 Tuesday after growth in the first half of its financial year met expectations, but its outlook did not as it warned of the impact of last month's traffic control strike in France.

Analysts at Nomura, Numis, Panmure Gordon and Cantor have, or say they are likely to, cut their full-year forecasts for easyJet as a result of the disruption in France and its tough outlook. Despite the cut to estimates, all five of the brokers reiterate their Buy ratings, with price targets varying from 1,950.00 pence to 2,100.00p.

The low-cost airline said it swung to a profit in the first half of its financial year as it flew more passengers and it benefited from lower fuel prices and favourable exchange rate movements, and it it is still on track to grow revenue and profit in the year as a whole despite a GBP25 million hit in April that mainly came from the air traffic control strike in France.

Airlines traditionally make little or no money in the winter months when travel demand is lower and they face higher costs due to travel disruptions and items like de-icing of planes. However, this year they are getting a benefit from lower fuel prices.

EasyJet said it made a pretax profit of GBP5 million in the six months to end-March, compared with a loss of GBP53 million a year earlier, as revenue rose to GBP1.77 billion from GBP1.70 billion.

It said is expecting its fuel bill to be down between GBP60 million and GBP85 million on the year in the second half, and to be down between GBP95 million and GBP120 million for the year as a whole, but that benefit will be partly offset by adverse currency movements which are expected to have an impact of about GBP40 million in the second half and about GBP20 million in the year as a whole.

It is also expecting second half cost per seat to increase, largely be driven by charges at regulated airports, particularly in Germany and Italy, increased crew costs and higher navigation charges.

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Markets: London equity markets continue to fall with the FTSE 100 erasing almost all of the gains it made on Friday following the UK general election results. The pound strengthened against the dollar after data showed that UK industrial production grew more-than-expected in March.

US stock futures point to a lower open on Wall Street, with the DJIA and S&P 500 currently set to open down 0.6% and and the Nasdaq 100 down 0.7%. Verizon Communications has announced an agreement to buy AOL for USD50 per share or about USD4.4 billion.

FTSE 100: down 1.6% at 6,920.02
FTSE 250: down 1.3% at 17,634.12
AIM ALL-SHARE: down 0.4% at 756.28
GBP: up at USD1.5682
EUR: up at USD1.1243
GOLD: up at USD1,195.05 an ounce
OIL (Brent): up at USD66.08 a barrel
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Other Top Corporate News
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The US conditionally approved Shell Gulf of Mexico's controversial plan to drill for oil and gas in the Arctic Ocean this summer, the US Department of the Interior said. Shell, part of Royal Dutch Shell, plans to drill up to six offshore wells in relatively shallow water in the Chukchi Sea 112 kilometres north-west of the village of Wainwright, Alaska. The go-ahead is contingent upon Shell obtaining a further series of permits and approvals regarding drilling safety and federal laws protecting marine mammals and endangered species.
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Lloyds Banking Group is continuing its gradual return to full private ownership, as stock exchange documents on Tuesday confirmed that the UK taxpayer's stake has fallen yet again. The documents confirmed that the taxpayer's stake in the bank has fallen to 19.93% from 20.95% previously. Following its GBP20 billion state rescue in the financial crisis of 2008-09, the government had owned as much as 43% of the banking group.
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Experian said earnings in its recently completed financial year were hurt by unwelcome foreign exchange movements and cautioned that it expects earnings to be affected in its current financial year. In a statement, the information services and credit report company said it made a USD1.01 billion pretax profit in the year ended March 31, compared with USD1.05 billion in the prior year. Experian said its margins were hurt by the weakening of the Brazilian real and the euro relative to the dollar.
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Nomura and Royal Bank of Scotland misled investors in mortgage backed securities, a US judge has ruled, according to a Financial Times report. According to the report, the ruling found that "offering documents did not correctly describe the mortgage loans". Denise Cote, the judge in question, ruled in favour of the Federal Housing Finance Agency, which is the conservator of Fannie Mae and Freddie Mac.
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Capita said it is on track to meet analysts' expectations for 2015, delivering low-double-digit revenue growth, after securing a larger amount of contracts in the year so far. The support services giant said it has secured GBP1.2 billion of contracts so far in 2015, up from GBP1.1 billion a year earlier, and bought seven businesses for a combined GBP215 million. It added that its bid pipeline, which stood at GBP5.1 billion on February 26, remains buoyant in both the public and private sector.Capita also said it has been made preferred bidder to form a strategic partnership to deliver corporate services for the Central London Community Healthcare NHS Trust, a deal it says will be worth GBP80 million to the company over the next 10 years.
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Prudential said its group chief risk officer is stepping down after almost two years in the role. In a statement, the life insurance company and FTSE 100 constituent said Pierre-Olivier Bouée will step down as group chief risk officer on June 30, though he will cease to be a member of the board one month before that. He joined Prudential in 2008 and became chief risk officer in August 2013. Prudential is yet to name Bouée's successor but said a replacement will be announced in due course. The news means that Mike Wells, who is set to become chief executive in June as Tidjane Thiam departs for Credit Suisse, will work with a new risk chief when he takes the helm
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Mondi said Standard & Poor's has upgraded the company's credit rating to BBB Stable Outlook from BBB-. "We are pleased to confirm that S&P have upgraded our credit rating in recognition of the group's strong cash flows and profitability from our high quality, low cost and well diversified asset base," Mondi Chief Financial Officer Andrew King said.
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Enterprise Inns reported a huge drop in profit in the first half of its financial year, which it blamed on costs associated with debt refinancing and property charges, but said it will optimise returns from its assets under its strategic review of its property portfolio. The pub operator reported a pretax profit of GBP10 million in the six months to March 31, down from GBP47 million in the same period a year earlier. It booked GBP47 million in charges, compared with GBP8 million in charges the year before, which it said was largely due to a GBP26 million cost in respect of debt refinancing and property charges of GBP21 million.
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Hiscox said first-quarter gross written premiums increased by 12% to GBP561.7 million, driven by several of its operations within its retail underwriting division, as well as its London Market and reinsurance divisions.
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Al Noor Hospitals Group said it had continued to perform in line with its expectations in the first quarter of 2015, with revenue growth of 12%, and announced the resignation of Chief Financial Officer Pramod Balakrishnan. The United Arab Emirates-focused private healthcare service provider said that Balakrishnan has resigned to pursue an unspecified alternative opportunity, and will leave the company at the end of July. The search for a successor has begun, it said.
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JP Morgan Securities said that Estorn Ltd has agreed to sell 30 million Regus shares at 245 pence each, raising gross proceeds of about GBP73.5 million for the vehicle controlled by the serviced office provider's founder Mark Dixon. Dixon will still hold about 294.3 million Regus shares after the deal, or about a 31.4% stake in the business.
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Spire Healthcare Group reiterated its full-year guidance for 2015, as it traded positively and in line with expectations in its first quarter. Spire said that during the three months to end-March revenue grew around 10%, with growth coming from all of its three major payor groups, with Self-Pay and National Health Services businesses being particularly encouraging. Stripping out its acquisition of St Anthony's Hospital last May, revenue rose 6%.
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AIM Movers
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Aurasian Minerals shares have risen by two thirds after it agreed to form a joint venture in Laos with investment firm Sahamit Phattana that will undertake exploration and mineral development activities in the country. Aurasian said it will hold a 70% stake in the new venture with Sahamit holding the rest. Cost contributions will be on a pro-rata basis. Aurasian will also finance one-third of Sahamit's 30% stake with a loan. Sareum Holdings is up after it said Chief Executive Tim Mitchell would describe the company's research pipeline, including the programme set to file for clinical trials later this year, at the BioTrinity event in London on May 12. W Resources is another gainer after it completed the scout diamond drilling programme at the CAA/Portalegre gold and base metal exploration licence in Portugal and got encouraging results from the five holds drilled. Reach4entertainment Enterprises is down sharply after it warned late Monday that it expects to report a loss in 2014 following the revaluation of its assets and therefore will not meet current market expectations for its full-year pretax profit.
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Top Economics And General
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UK industrial production grew more-than-expected in March and for a second straight month, led by a strong gain in manufacturing output, data from the Office for National Statistics revealed. Industrial production rose 0.5% from February, when it edged up 0.1%. Economists had forecast stagnation for the month. The latest growth rate was the strongest since September last year, when production grew 0.6%. Manufacturing output increased 0.4% following 0.5% gain in the previous month. It was also a second consecutive month of growth. Economists had forecast 0.3% rise.
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Like-for-like retail sales in the UK were down 2.4% on year in April, the British Retail Consortium said. That followed the 3.2% annual increase in March, although the BRC cautioned that the data was somewhat skewed for both months by this year's early Easter holiday.
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Britain will be "constructive and engaged but also resolute and firm" in negotiations with the EU on their future relationship, UK Chancellor of the Exchequer George Osborne vowed after the Conservatives' election win. "We come here with a very clear mandate to improve Britain's relationship with the rest of the EU and to reform the EU so that it creates jobs and increases living standards for all its citizens," Osborne said during his first visit to Brussels since Thursday's election.
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Britain opposed plans to set national quotas for refugees who seek asylum in the EU, while France supported the expected proposal by the bloc's executive. The European Commission plans to propose an EU-wide quota system for migrants as part of its strategy on migration, due to be unveiled on Wednesday, commission president Jean-Claude Juncker announced last month.
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Eurozone finance ministers told Greece to speed up work aimed at reaching an agreement with its creditors on the country's reform plans, amid fears that Athens could soon run out of money. The Eurogroup of eurozone finance ministers welcomed recent progress, but warned in a joint statement that "more time and effort are needed to bridge the gaps on the remaining open issues." An agreement must be reached within the next two to three weeks in order to meet a June 30 deadline, an EU diplomat said on condition of anonymity. The extra time is necessary to seek parliamentary approval from some countries, including Germany. Athens made a EUR756 milion loan repayment to the IMF on Monday, hours ahead of a Tuesday deadline, Greek state radio reported.
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Eurogroup Chairman Jeroen Dijsselbloem welcomed the progress in Greece talks but he said more time is needed to bridge the remaining gaps and to reach a comprehensive agreement. "We will continue to monitor the situation and we stand ready to meet as soon as the institutions confirm that there is a basis for a successful conclusion," Dijsselbloem said in a statement on Monday in Brussels after the meeting of Eurozone finance ministers. "There are time constraints and liquidity constraints, hopefully we will reach an agreement before time runs out and before money runs out," he said.
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US Secretary of State John Kerry on Tuesday arrived in the southern Russian city of Sochi, where he is expected to meet Russian President Vladimir Putin and Foreign Minister Sergei Lavrov, Russian state media reported. It is Kerry's first visit to Russia since May 2013. The top US diplomat reportedly canceled several visits since then as relations with Russia plummeted amid the Ukraine crisis to their lowest point since the Cold War. Tuesday's talks are expected to focus on issues concerning Ukraine, Yemen, Syria and Iran, while tit-for-tat sanctions between Russia and the West are not on the agenda, Putin's spokesman Dmitry Peskov said in comments carried by state news agency RIA Novosti.
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An earthquake of magnitude 7.4 struck Nepal, prompting several buildings to collapse and injuring at least 20, officials said. The tremor comes 17 days after a 7.8 quake in the country last month left more than 8,000 dead and almost half a million houses unusable. "We do not know about the casualties since it is too early," said Laxmi Dhakal, Interior Ministry spokesman. "But we expect more devastation."
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A powerful typhoon slammed into southern Japanese islands early Tuesday, bringing heavy rains, strong winds and high waves in the region, news reports said. Typhoon Noul caused power outages on the island of Miyako and authorities advised thousands of residents to evacuate their homes on the island of Yoron, broadcaster NHK reported.
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Afternoon Watchlist (all times in BST)

n/a EU EcoFin Meeting
13:55 US Redbook index
14:00 US NFIB Business Optimism Index
15:00 US JOLTS Job Openings
15:00 UK NIESR GDP Estimate
17:45 US FOMC Member Williams speech
19:00 US Monthly Budget Statement
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Wednesday's UK Corporate Events

Vertu Motors - Full Year Results
Barratt Developments - Interim Management Statement
International Game Technology - Q1 Results
Compass Group - Half Year Results
G4S - Interim Management Statement
Mondi - Interim Management Statement
Galliford Try - Interim Management Statement
New World Resources - Q1 Results
Partnership Assurance - Q1 Interim Management Statement
Premier Oil - Interim Management Statement
John Wood Group - Trading Statement
Centamin - Q1 Results
SABMiller - Full Year Results
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Wednesday's Key Economic Events (all times in BST)

00:50 Japan Current Account
00:50 Japan Trade Balance - BOP Basis
03:45 Japan BOJ Policy Board Member Sato Speech
06:30 China Industrial Production
06:30 China Retail Sales
06:30 China Urban investment
06:30 France Gross Domestic Product
07:00 Germany Gross Domestic Product
07:00 Germany Consumer Price Index
07:45 France Consumer Price Index
07:45 France Current Account
09:00 Italy Gross Domestic Product
09:30 UK ILO Unemployment Rate
10:00 Italy Consumer Price Index
10:00 EU Gross Domestic Product
10:00 EU Industrial Production
10:00 EU Industrial Production
10:30 UK BOE's Governor Carney speech
10:30 UK Bank of England Quarterly Inflation Report
12:00 US MBA Mortgage Applications
12:30 EU ECB Monetary Policy Meeting Accounts
13:30 US Retail Sales
14:30 US Export/Import Price Index
15:00 US Business Inventories
15:30 US EIA Crude Oil Stocks change
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