Airline shares take off after Brexit is delayed
AIRLINE stocks were soaring after Brexit was pushed back to the end of October.
The new deadline, which prevents Britain from leaving the EU with No Deal today, helped brush away fears that Brexit uncertainty might deter the UK’s holidaymakers from booking their summer escape to the Costa del Sol.
Travel agent Tui jumped by 8.3pc, or 59.2p, to 775.4p, helped along by a note from analysts at BNP Paribas’s Exane branch who predicted the stock would begin to outperform the market.
EasyJet revved up by 8.4pc, or 88.5p, to 1144.5p, while British Airways’ parent IAG lifted by 5.9pc, or 30.4p, to 545.4p.
Airlines have experienced a turbulent time over the past year, as fuel cost pressures have pushed budget operators like Flybe to the brink of disaster and a scorching summer last year persuaded Britons to stay on their home turf.
Investors who stuck with the companies will be glad for the respite, and may hope that the UK’s eventual split from the EU will end on a cordial note to ensure bookings don’t take another dive.
The boost to travel firms wasn’t enough to haul the FTSE 100 into positive territory. Metals miner
Fresnillo was the biggest drag, falling 7.2pc, or 62.2p, to 798.4p as it revealed production results for the first quarter of the year.
Silver production at the Mexicofocused firm slid 14.8pc compared to the same time last year, due to lower ore grades being pulled up from its mines.
Gold production was also down, by 8.8pc, as less ore was processed at one site and delays weighed on another.
Chief executive Octavio Alvidrez confirmed that the results were ‘slightly weaker than anticipated’, but did not reduce the full-year guidance.
He emphasised that the company was taking a number of measures to polish up its dulled performance, including improving coordination between its teams and investing in new equipment.
Analysts at Jefferies said the disappointment piled more pressure on the second half of the year, but added that they believe Fresnillo still offers the best growth among London-listed precious metals miners.
On the FTSE 250, building materials firm Grafton Group cemented a £113m deal to acquire Dutch ironmongery business Polvo.
Grafton’s boss Gavin Slark said the acquisition would increase the firm’s presence in the fast-growing Dutch market, and shares jumped by 6.1pc, or 50p, to 868p.
Shared office business IWG was building up the gains as analysts at Peel Hunt endorsed its new strategy of franchising.
At the end of last year, after walking away from private equity bidders who boss Mark Dixon claimed were undervaluing his business, IWG set out the new approach. It involves granting other parties the rights to use IWG’s brand names to run shared office spaces, in return for management fees and upfront cash.
Peel Hunt said that if successful, Dixon’s idea could see the share price more than double. The stock yesterday climbed 4.8pc, or 12.5p, to 275p.
Hvivo, the business backed by fund manager Neil Woodford which is developing new ways to test drugs, suffered a wobble as it revealed losses had widened last year.
Though revenue climbed 10.5pc to £13.6m, losses increased from £14.8m to £18.9m as Hvivo was forced to write down the value of some of its assets.
The company, whose shares have swung wildly over its seven-year life on the stock market from highs of 375p to lows of 14.2p, said its turnaround was progressing well. But shares still dipped by 7.9pc, or 2.25p, to 26.25p.