Na­tional Ex­press stays in the slow lane

The Daily Telegraph - Business - - Business - Louis ash­worth

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.

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