UK WINNERS & LOSERS SUMMARY: Airlines Take Off After Ryanair Results

Mon, 18th May 2020 10:46

(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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Fresnillo, up 11%, Polymetal International, up 4.5%. The gold miners were tracking spot gold prices higher, quoted at USD1,761.45 an ounce Monday morning, up from USD1,743.84 late Friday. Gold hit an intraday high of USD1,764.48 an ounce overnight - the highest level since November 2012 - in the wake of comments from Federal Reserve Chair Jerome Powell. The US central bank chief told broadcaster CBS's '60 Minutes' programme on Sunday that the US economy can begin to recover from a recession in the second half of the year, assuming the coronavirus doesn't erupt in a second wave. But Powell suggested that a full recovery won't likely be possible before the arrival of a vaccine.

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FTSE 250 - WINNERS

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Hochschild Mining, up 18%. The gold miner said that it has met all the health and safety requirements of the Peruvian government to restart operations at the Inmaculada and Pallancata mines. Hochschild expects to reissue its 2020 guidance once full production is achieved and the overall impact of mine suspensions is clear. In line with current government guidelines, the company's brownfield exploration programme is expected to recommence in July. In February, the company had said that it was targeting 422,000 gold equivalent production for 2020. However, this guidance was subsequently suspended in April due to the suspension of the company's mines in Peru and Argentina. The San Jose mine in southern Argentina recently restarted operations and is following a phased ramp-up process.

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Mitchells & Butlers, up 6.0%. The pub and restaurant operator said it has secured an extension to a temporary waiver granted against possible technical default on the company's loan covenants due to government-enforced closure of its restaurants and pubs. The waiver to the banking covenants has been extended to June 8. The FTSE 250-listed pub company - which operates the Harvester, Toby Carvery, All Bar One and Miller & Carter chains - initially secured a waiver from its lenders in April to prevent a breach of its financing arrangements.

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OTHER MAIN MARKET AND AIM - WINNERS

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Ryanair Holdings, up 10%. The Irish carrier reported a rise in earnings and traffic in its recently ended financial year which was largely unaffected by the Covid-19 pandemic that has since battered the airline sector. Revenue in the financial year that ended March 31 was 10% higher annually at EUR8.49 billion from EUR7.70 billion. Pretax profit, however, was down by 29% year-on-year to EUR670.3 million from EUR948.1 million. Ryanair's total number of passengers climbed 3.8% to 148.6 million, though its load factor slipped slightly to 95% from 96%. Ryanair earlier in May said it could slash up to 3,000 jobs as the airline embarks on restructuring in response to destructive effects of Covid-19. "Ryanair's done a good job reigning in its cash expenses during the lockdown, but EUR60 million a week is still a lot. When furlough schemes start winding down costs may balloon again, but the group's formidable cash pile and relatively strong balance sheet gives it time to restructure," said Hargreaves Lansdown's Will Ryder. Blue-chip peers International Consolidated Airlines and easyJet were up 8.3% and 7.2% respectively in a positive read-across.

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Collagen Solutions, up 16%. The biomaterials and regenerative medicines maker said that it is evaluating three different types of potential transactions, received as part of the company's formal sale process. In April, the company decided to conduct a formal review of various strategic options to maximise value for shareholders. These options included, but were not limited to, the potential sale of the entire company or the sale of one or more of the company's assets. Collagen, as part of the process, has received indications of interest in respect of a purchase of the entire company as a whole, a purchase or investment in a part of the business of the company and a refinancing of the company. Collagen said it is engaging with relevant parties "in a constructive and positive manner with a view to optimising value for shareholders".

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By Arvind Bhunjun; arvindbhunjun@alliancenews.com