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(Alliance News) - There appears to have been at least one winner from the UK's summer of travel misery, food kiosk operator SSP.
The Upper Crust and Millie's Cookies chain owner on Thursday said its revenue continued to strengthen in the third quarter as rail travel bounced back from the pandemic.
For the three months to June 30, SSP said revenue was at 87% of 2019 levels driven by a recovery in passenger numbers.
But SSP noted that it also benefited from "longer passenger dwell times in some markets", without explaining this further. The UK in recent months has suffered both train strikes and flight cancellations and delays, leaving passengers stuck in airports and train stations.
SSP said recovery has been led by domestic and leisure travel in both the air and rail sectors. Further, rail commuter travel continued to recover well, albeit at a slower pace than leisure travel, SSP said.
Looking ahead, SSP said its medium-term expectation for a recovery of the like-for-like business to 2019 levels of profitability remains unchanged. It also expects to deliver sales in the region of GBP2.1 billion and an earnings before interest, tax, depreciation and amortisation margin of around 6%, which is at the upper end of the previous full-year guidance range.
SSP shares were down 3.0% early Thursday, while the wider FTSE 250 was down 0.2%.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.2% at 7,139.63
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Hang Seng: down 0.4% at 20,724.64
Nikkei 225: closed up 0.6% at 26,643.39
S&P/ASX 200: closed up 0.4% at 6,650.60
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DJIA: closed down 208.54 points, or 0.7%, at 30,772.79
S&P 500: closed down 0.5% at 3,801.78
Nasdaq Composite: closed down 0.2% at 11,247.58
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EUR: down at USD1.0021 (USD1.0089)
GBP: down at USD1.1850 (USD1.1929)
USD: up at JPY138.60 (JPY137.35)
Gold: down at USD1,724.87 per ounce (USD1,739.37)
Oil (Brent): down at USD99.40 a barrel (USD100.80)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Thursday's key economic events still to come
0930 BST UK Bank of England quarterly bank liabilities survey
1100 BST Ireland consumer price index
0830 EDT US producer price index
0830 EDT US jobless claims
1030 EDT US EIA weekly natural gas storage report
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Jeremy Hunt has thrown his weight behind Rishi Sunak after being knocked out of the race to succeed UK Prime Minister Boris Johnson in the first round of voting by Tory members of Parliament. The endorsement gives the former chancellor a boost ahead of the second ballot on Thursday, which will eliminate the least popular candidate. Hunt, who along with Chancellor Nadhim Zahawi failed to garner the 30 votes needed to progress to the next stage of the contest, described Sunak as "one of the most decent, straight people with the highest standards of integrity" in politics. Sunak, whose resignation from No 11 helped trigger the Tory leadership race, topped Wednesday's ballot, as trade minister Penny Mordaunt emerged as his leading rival in second place. The former defence secretary surged ahead of Foreign Secretary Liz Truss, despite being seen as a relative outlier before the race began.
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Property professionals saw fewer new inquiries from UK house hunters in June, but house prices continued on an upward march, according to surveyors. Some 27% of professionals reported a fall in interest from potential buyers, the Royal Institution of Chartered Surveyors said. It marked the third month in a row that interest from new buyers slipped. London appeared to be more resilient, as 7% of professionals there reported an uptick in inquiries in the past month. Despite a general cooling in demand in the housing market, the direction of house prices was upwards, with 65% of professionals seeing an increase.
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US President Joe Biden will hold bilateral talks on Thursday with Israeli officials in Jerusalem, where the two allies are expected to declare a "united stand" on common foe Iran. Biden touched down in Tel Aviv on Wednesday for the first Middle East tour of his presidency, which will see him meet Israeli and Palestinian leaders before flying onwards to Saudi Arabia. Tehran will top the agenda of talks slated for Thursday, according to Israeli Prime Minister Yair Lapid, while a senior official said the two leaders were due to sign a joint declaration. The document "is going to be a living testimony to the unique quality, health, scope, depth and intimacy of the US-Israel relationship", the Israeli official said, speaking on condition of anonymity. "It takes a very clear and united stand against Iran, its nuclear programme and its aggression across the region," the official added.
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Major progress has been achieved in the dispute over the unblocking of badly needed grain exports from Ukraine's Black Sea ports, UN Secretary General Antonio Guterres said on Wednesday. A "critical step forward" was taken at talks between representatives of the United Nations, Ukraine, Russia and Turkey in Istanbul, Guterres told reporters in New York. "Today at last we have a ray of hope," he said. Guterres did not share details of the plan to restart Ukrainian grain exports, saying that while "more technical work" remained, the momentum to reach a deal had accelerated. Turkish Defence Minister Hulusi Akar meanwhile announced agreements on technical issues such as joint inspections of arrivals and departures from ports, the Anadolu news agency reported.
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BROKER RATING CHANGES
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Goldman Sachs cuts BHP to 'neutral' (buy) - price target 2,200 (3,000) pence
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JPMorgan places Centrica on 'positive catalyst watch' into interims, raises price target to 120 (94) pence - 'overweight'
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Berenberg raises Hunting to 'buy' (hold) - price target 275 (220) pence
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COMPANIES - FTSE 100
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Housebuilder Barratt Developments said it delivered an "excellent" performance for its recently ended financial year, reflecting strong customer demand for homes and the productivity of its sites. For the financial year that ended June 30, adjusted pretax profit is anticipated to be in the range of GBP1.05 billion and GBP1.06 billion, slightly ahead of current market consensus expectations at GBP1.048 billion, and up from GBP919.7 million in financial 2021. Barratt said total home completions returned to pre-pandemic levels, with 17,908 homes completed in the year, up from 17,243 homes the year before. Looking ahead, Barratt said it has significant net cash balances, a well-capitalised balance sheet, and a strong forward sales position. It also said it has "clear plans" to secure both incremental home completion growth and further operating efficiencies in the year ahead.
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Water works Severn Trent said it has made a good start to the financial year operationally and continues to expect at least GBP50 million in customer outcome delivery incentives outperformance payments in financial 2023. As expected, Severn Trent said it was seeing an increase in operating costs, particularly energy and chemicals.
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COMPANIES - FTSE 250
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Ashmore Group, a specialist emerging markets asset manager, said assets under management dropped by 18% over the past three months, standing at USD64.0 billion on June 30, down from USD78.3 billion on March 31. The USD14.3 billion fall in AuM was the result of USD6.6 billion in net outflows and USD7.7 billion in negative investment performance. Ashmore said the net outflows were concentrated in the local currency and blended debt themes, amid reduced investor risk appetite. "The global macro environment deteriorated in the quarter due to continued geopolitical tension, higher than expected inflation and more aggressive monetary tightening in the US leading to fears of recession and broad-based risk aversion," commented CEO Mark Coombs. "The decline in Ashmore's AuM over the quarter reflects this challenging market backdrop as asset values fell and investors de-risked portfolios."
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COMPANIES - GLOBAL
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Deutsche Telekom said it has agreed to dispose of a 51% stake to Digital Bridge Group and Brookfield Asset Management Inc in mobile telecoms tower business GD Towers at an enterprise value of EUR17.5 billion on a cash- and debt-free basis. Digital Bridge is an infrastructure-focused private equity firm based in Boca Raton, Florida, while Brookfield is a Toronto, Ontario, Canada-based asset manager. GD Towers operates around 40,000 sites in Germany and Austria. Deutsche Telekom will keep a 49% stake in GD Towers, and is expected to generate cash proceeds of EUR10.7 billion from the sale. The group said the proceeds will go towards deleveraging purposes, and accelerating its path towards a targeted 50.1% stake in T-Mobile US. Bonn-based Deutsche Telekom currently holds a 48% interest in T-Mobile US.
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Thursday's shareholder meetings
BT Group PLC - AGM
Dr Martens PLC - AGM
Great Western Mining Corp PLC - AGM
Helical PLC - AGM
Mind Gym PLC - AGM
Personal Assets Trust PLC - AGM
Randall & Quilter Investment Holdings Ltd - AGM
RS Group PLC - AGM
Triple Point VCT 2011 PLC - AGM
Vietnam Enterprise Investments Ltd - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
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