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British Airways owner IAG has cautioned that losses this year will be deeper than expected. But chief executive Luis Gallego remained confident that the reopening of transatlantic routes will turn the business around.
IAG’s third quarter update guided for an annual operating loss before exceptional items of about €3bn, which compares with a consensus loss estimate of €2.87bn. The cautious guidance was in spite of IAG posting a narrower than feared underlying loss for the quarter ending September, at €485m compared with a €513m consensus.
IAG targeted flying about 60 per cent of its pre-pandemic capacity in the current quarter. By next summer the airline could operate at 90 per cent of 2019 capacity which would put IAG on track to turn profitable in 2022, Gallego told analysts on the results conference call.
UK house prices rose for a fourth straight month in October, mortgage lender Halifax reported. The average house cost £270,027, up 0.9 per cent in monthly terms and 8.1 per cent higher year on year, Halifax said.
Insurer Beazley set aside $125m in the third quarter to cover claims related to Hurricane Ida and European flooding. Gross premiums written had increased in the period by 29 per cent year on year to $3.3bn, Beazley reported. It targeted an improved full-year combined ratio, a measure of profitability that compares losses and expenses against premiums, in the mid 90s per cent from 109 per cent last year.
THG non-executive director Zillah Byng-Thorne and her husband have paid about £155,000 to increase their stakes in the ecommerce group. Byng-Thorne, who is CEO of magazine publisher Future, paid 202p apiece for 32,291 shares and Max Thorne bought a further 25,300 shares at 196.2p each, according to a regulatory filing. THG closed on Thursday at 196.2p, having more than halved in a month.
Vimto maker Nichols said third-quarter trading had beaten expectations with revenue up 17 per cent year on year. The soft drinks company raised its 2021 profit guidance but left the 2022 guide unchanged to reflect the rising costs of logistics, labour and materials.
Morgan Advanced Materials, the maker of industrial ceramics and composites, said in a trading update that full-year sales will be at the top end of previous guidance.
4imprint, which markets promotional merchandise such as branded pens and mugs, said recent progress has been “encouraging” in uncertain and volatile markets, so it remains on tack to meet full-year targets.
Beyond the Square Mile
Uber delivered its first profitable quarter on an adjusted basis, thanks to a rapidly recovering ride-share business and a boom in food delivery. Airbnb, meanwhile, enjoyed record earnings in the third quarter thanks to a travel industry recovery and in-house belt-tightening.
Opec+ risks imperilling the global economic recovery by refusing to speed up oil production increases, the White House said, and warned that the US was prepared to use “all tools” necessary to lower fuel prices.
SoftBank is facing pressure to unveil a new stock buyback programme. The Japanese technology group’s falling share price has created “deep frustration” among shareholders, people with knowledge of the matter told the FT. Activist hedge fund Elliott Management, which has a large stake in SoftBank, has argued that the only short-term catalyst for its flagging share price is a capital return programme.
Essential comment before you go
There’s logic behind the Rothermere family’s attempt to take Daily Mail and General Trust private but the mechanism is “faintly coercive”, writes Helen Thomas. “Investors might well welcome the return of funds that DMGT doesn’t have good ways to invest. They might appreciate a take-private offer. But there is no good reason for the two to be linked.”
Robert Armstrong’s Unhedged newsletter reconsiders IBM, “one of the stock market’s favourite morality tales”, on the event of its datacentre spin-off. Problems should have been spotted long before the stock peaked in 2013, because nearly a decade earlier IBM was already prioritising gross profits and shareholder returns over investment, he writes.
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