Easyjet hurt by poaching raid
SURPRISE news that chief financial officer Chris Kennedy had entered the departure lounge prompted nervous selling of easyJet. The shares touched 1607p before closing 28p lower at 1616p amid growing fears that the discount airline also could soon be waving cheerio to chief executive Carolyn McCall, who is believed to be attracting the attentions of several struggling UK retailers.
Details of Kennedy’s move to IT company ARM Holdings (23p better at £10) disappointed analysts who said it will be hard for the group to replace him. Kennedy will serve out a notice period of up to 12 months if necessary to ensure a seamless transition.
Broker Credit Suisse expects chief executive McCall’s lofty standing in the equity market and the media, and her promotion of a very healthy culture at easyJet, to prove an attraction to potential candidates. But Kennedy’s departure is bound to prompt questions regarding the chief executive’s future. But the broker sees Carolyn McCall as firmly committed to easyJet’s multi-year growth strategy. Its target price is 1837p.
Shares of Aer Lingus added 2.4pc to €2.28 on talk of an imminent increased offer from British Airways owner International Airlines Group, 7.5p off at 473.7p. Major shareholders, including the Irish government (25pc) and Ryanair (29pc) rejected a €1.15bn (£900m) offer and dealers now hear that an increased offer in the region of € 1.5bn (£1.17bn) will soon be tabled.
Wall Street’s overnight leap of 212 points after the Federal Reserve spoke of its confidence in a US economic recovery helped the London market take Wednesday’s rally a useful stage further. The Footsie closed 150.13 points higher at 6569.96 and the FTSE 250 233.85 better at 16,085.54. Helping the market’s cause was confirmation that the Bank of England had left UK interest rates unchanged at 0.5pc and the asset purchase target at £375bn.
The Street of Dreams yesterday kept the pot boiling by soaring a whopping 323 points to 17,907.87 on news that initial claims for state benefits were slightly above expectations in December ahead of today’s US nonfarm payroll (employment) numbers.
Beleaguered supermarket Tesco took a distinct turn for the better, soaring 27.25p or 15pc to 209.25p as the market gave the big thumbs up to new boss Dave Lewis’s plan to turn it around. He is axing the dividend, the head office in Cheshunt and closing 43 stores. Drastic times calls for drastic measures.
Marks & Spencer was sold down to 440p before closing 16.3p or 3.5pc lower at 446.9p after reporting a disastrous fall of 5.8pc in like-for-like clothing sales in the third quarter. If chief executive Marc Bolland was a cat he would be dead by now. He has now overseen 14 consecutive quarterly declines in clothing sales and the market is fed up with his excuses. He should resign and let someone like Harriet Green or Carolyn McCall resuscitate a great brand.
Bike accessories company Halfords fell 39.2p to 423.3p after chief executive Matt Davies resigned to take charge of Tesco’s UK operations. Sellers dragged estate agents Foxtons 10p lower to 164p after Credit Suisse downgraded to neutral from outperform and slashed its target price to 181p from 215p. The broker is concerned about the London property market in 2015.
Market indicators such as RICS already signal a slowdown in London, while prices sit at an elevated level ahead of the General Election in May. Zoopla shed 11.2p to 181.5p in sympathy.
Buyers continued to pile into insurance claims processor Quindell after Martin Hughes’ Toscafund revealed a 5.4pc stake. The shares followed Wednesday’s gain of 29.6pc with a further rise to 86.5p before they closed a further 11p or 16pc higher at 81p. Rumours were rife before the close that Jim Sutcliffe will soon be named chairman.
He has more than 30 years’ experience in the insurance, banking and asset management industry and would immediately restore Quindell’s reputation in the City.
Support services company Rentokil Initial firmed 3p to 120.3p after three overseas acquisitions, one in the UK and two overseas pest control businesses.
Broker Bank of America Merrill Lynch said acquisitions of Peter Cox Property Care in the UK, EcoTime Pest Control in Italy and Tropical Pest Control in the Bahamas are in line with a strategy of pursuing targets in higher growth markets and/or areas which add density to existing operations.
WANdisco jumped 45p to 520p after winning its largest Big Data contract to date with British Gas. Audioboom, the digital social media platform, edged up 0.25p to 10.25p after signing an agreement with an African mobile content aggregator.
÷ TECHNOLOGY group Spirent Communications rose 9p to 87.75p after its order intake exceeded expectations during the last quarter of 2014. It advanced to £97m from £82m, while revenues were also up to £82m from £76m. Broker N+1 Singer said a single quarter, particularly the fourth, is unlikely to be indicative of an extended recovery, but the higher levels of order intake are encouraging.