National Express stays in the slow lane
SHARES in National Express were stuck heading downhill yesterday. The FTSE 250 group warned travel activity is still at “much suppressed levels” after swinging to a £60.7m loss before tax for the first half of the year.
Revenues dropped by 23pc to £1.03bn compared to £1.34bn for the same period in 2019, with free cash flow also swinging to £193m in the red.
The FTSE 250 group said it had seen “encouraging early signs of demand returning”, but said it remains under pressure.
Warning it was impossible to know whether demand will return to pre-virus levels, it said tests for a worst-case scenario showed it would be able to continue operating even in the event of new lockdowns.
Dean Finch, chief executive, said: “While there are some signs of demand returning, levels are both significantly reduced and subject to variability given local lockdowns, the impact of quarantines and uncertainty over the extent of US school reopenings.”
Royal Bank of Canada’s Stephanie D’Ath said National Express still looked like a strong business despite the pandemic. National Express’s shares dropped 28.5p to 147.5p, leaving it as the biggest faller among mid-caps, with rival FirstGroup behind it with a 4p slide to 41.4p.
It was a poor day for Britain’s top stock indices, with London’s bluechips feeling the impact of a slew of stocks trading “ex-dividend”, meaning investors who bought their shares would not be entitled to the next payout. BP, Shell, Diageo, AstraZeneca, GSK and Legal & General were all among those trading ex-divi.
GVC Holdings was the only blue-chip to release results, briefly leading risers on the FTSE 100 after posting consensus-beating guidance but scrapping its interim dividend.
The gambling operator said its earnings before interest, taxation, depreciation and amortisation will be between £720m and £740m – about 3pc ahead of what analysts had expected. It closed up 14.6p at 800p.
Watches of Switzerland led the FTSE 250, climbing 62.5p to 324.5p. It returned to sales growth over the past two months after taking a significant sales hit from Covid-19. Shore Capital’s Greg Lawless said the results showed a favourable trajectory.
Retirement investment services provider Just Group rose 4.1p to 55p, after it reported a first-half profit before tax jump from £125.3m last year to £304.5m, despite higher costs, though its operating profit slipped 18pc. Crucially, it raised its capital key ratio, demonstrating financial strength.
Mast operator Helios Towers dropped 15.6p to 162.2p, even after it reported improved underlying earnings. Jefferies’ Giles Thorne said the group’s expansion plans look convincing.