LONDON (Alliance News) - UK stock prices started Friday lower, following a sell-off on Wall Street, with IAG the biggest FTSE 100 faller as it said it achieved a pretax profit in the first quarter, a traditionally slack one for airlines, but warned about the continued impact of the Brussels terror attacks on travel.
International Consolidated Airlines Group - which owns British Airways, Ireland's Aer Lingus, and Spanish carriers Iberia and Vueling - said it made a pretax profit of EUR124 million in the three months to March 31, having suffered a EUR37 million pretax loss in the first quarter of 2015.
Operating profit increased to EUR168 million from EUR25 million a year before.
Revenue grew to EUR5.08 billion from EUR4.71 billion, boosted by 14% growth in traffic measured in revenue passenger kilometres, and a 22% rise in passenger numbers.
IAG said revenue in January and February was in line with the trends seen in the fourth quarter of 2015, while March revenue was helped by the earlier timing of Easter but hurt by the terrorist attacks in Brussels. It said the effects of the Brussels attacks are continuing into the second quarter.
The stock traded down 3.5%, in early trade Friday.
The FTSE 100 was 1.0% lower, or down 65.63 points, to 6,256.77. The FTSE 250 was down 0.7% at 16,939.73 and the AIM All-Share was down 0.1% at 729.58.
London equities were following a late sell-off on Wall Street, led by Apple after billionaire investor Carl Icahn told CNBC he sold his stake in technology giant. By the end of trading Thursday, the Dow 30 index was down 1.2%. The S&P 500 closed down 0.9%, and the Nasdaq Composite ended down 1.2%. Apple shares fell 3.1%, after losing 6.6% on Wednesday following its report of disappointing iPhone sales.
In Europe Friday, the French CAC 40 was down 1.3% and the DAX 30 in Frankfurt was down 1.1%.
In Asia, the Shanghai Composite ended down 0.3% and the Hang Seng in Hong Kong is down 1.3%. The Tokyo market is closed for Showa Day.
Royal Bank of Scotland Group shares fluctuated between gains and losses early Friday and were down 0.9% just after the open. The company said its first-quarter net loss widened after paying a fee to the UK government that will eventually allow the state-backed lender to resume dividends.
RBS's net loss, which included a GBP1.19 billion payment to the government to retire the so-called dividend access share, amounted to GBP968 million in the three months ended March 31, the lender said in a statement, widening from the GBP459 million net loss the corresponding quarter a year earlier. First-quarter pretax profit jumped to GBP421 million from GBP37 million.
The results come after RBS on Thursday warned there is a significant risk it will miss a deadline by which it must sell the UK retail branch network known as Williams & Glyn. A lengthier separation of the 300-branch network from the rest of RBS raises the prospect of higher costs and further delays to returning capital to shareholders. On Thursday, the stock fell 2.9%.
In the FTSE 250, Ophir Energy shares slumped 17% early Thursday after it said that talks with Schlumberger over the Fortuna floating liquefied natural gas project in Equatorial Guinea have been terminated.
Ophir said that despite Schlumberger completing technical due diligence, the two companies were unable to complete the transaction on terms agreed in the heads of terms, and as such, talks between the two were terminated.
In January, the company had struck a deal for Schlumberger to take a 40% stake in the Fortuna project as its upstream partner. Ophir currently has an 80% working interest in Fortuna.
Ophir reiterated Friday that Fortuna "still represents a technically and financially attractive project for Ophir and its shareholders" and said it continues to progress the project.
Restaurant Group was the worst performer in the FTSE 250, down 22%, after it warned on profit for its full financial year. It said it was experiencing a "deterioration in trading conditions" which will lead to a fall in full-year like-for-like sales. It also revealed the resignation of its chief financial officer.
Rotork was one of the biggest gainers in the mid-cap index, up 3.1%. The actuators said favourable exchange rates and acquisition contributions drove up revenue and order intake in its first quarter, and announced the purchase of valve gearbox manufacturer Mastergear for USD25.0 million.
The company said its order intake rose 2.5% over the period from the start of 2016 to April 3, on a quarter-on-quarter basis, whilst revenue rose 0.7%. Rotork said it benefitted from favorable exchange rates, which contributed 3.1% to order intake and 3.0% to revenue, and its acquisitions contributed 8.4% to order intake and 9.2% to revenue.
The focus in the morning's economic calendar will be on the eurozone, which releases unemployment data and preliminary readings for first quarter GDP and April's consumer price index, all at 1000 BST.
Elsewhere in the economic calendar UK net lending to individuals and mortgage approvals are both at 0930 BST. US personal consumption expenditure is at 1330 BST, the Chicago Purchasing Managers Index is at 1445 BST, and the Reuters/Michigan Consumer Sentiment Index is at 1500 BST.
By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1
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International Airlines (IAG)
Rotork (ROR)
