National Express back in fast lane after Covid
NATIONAL Express surged as it saw revenues bounce back to prepandemic levels.
The bus and coach operator jumped 3.6pc, or 8p, to 233p after reporting that its revenues in the first three months of 2022 were similar to those in 2019.
The firm’s performance in March was ahead of the same period three years ago thanks to a ‘particularly strong recovery’ in its UK and European coach businesses as it cashed in on pent-up demand for travel as lockdown restrictions were eased.
The Easter holidays had been particularly strong, with strong demand for its London airport routes on Good Friday as holidaymakers jetted off abroad.
UK bus demand was also at over 80pc of pre-Covid levels, with National Express keeping its fares low to support passengers during the cost of living squeeze.
Boss Ignacio Garat said a ‘further strong recovery’ was expected across the rest of the year as the company reiterated predictions that its 2022 revenues would be in line with 2019 levels. The update provided a much-needed boost to National Express shareholders who were burned last month when its planned merger with rival Stagecoach (down 0.2pc, or 0.2p, at 105.1p) was gate-crashed by an offer from German investment fund DWS.
The company maintained its offer was ‘superior’. However, the DWS bid has already been backed by Stagecoach’s board.
Analysts at broker Liberum said the update was ‘broadly encouraging’ but noted that the company’s profit recovery was likely to lag behind revenues.
The FtSE 100 was up 0.08pc, or 5.65 points, at 7386.19 but the
FtSE 250 lost 0.5pc, or 107.1 points, to 20492.12.
Markets staged a relief rally following Monday’s sell-off, with blue-chip miners and UK-focused banks leading the charge.
Glencore was one of the biggest risers, jumping 3.4pc, or 15.45p, to 464.8p after analysts at Barclays hiked their target price on the firm to 730p from 680p.
Other miners rose after receiving price increases from the bank, with anglo american up 2.7pc, or 88p, to 3311.5p, antofagasta rising 1.6pc, or 23.5p, to 1468.5p, Endeavour Mining climbing 1pc, or 19p, to 1964p and Fresnillo adding 3.3pc, or 25p, to 772.4p.
One outlier was Rio tinto, which Barclays downgraded to ‘underweight’ from ‘equal weight’ after flagging concerns about Chinese steel output, a key measure of global iron ore demand.
However, shares in Rio edged up 1.5pc, or 81p, to 5453p after analysts upped their target price to 4800p from 4400p.
Meanwhile, lloyds rose 1.1pc, or 0.49p, to 45.89p after Citigroup upped their target price to 91p from 88p.
Other banks were also in the green, with NatWest up 1pc, or 2.1p, to 220.3p but Barclays edged down 0.8pc, or 1.2p, to 142.98p.
Retail stocks were under pressure after Primark owner Foods (down 5pc, or 81.5p, to 1548.5p) warned it was putting up prices to offset surging inflation.
Fears that price rises could dent demand sent shares in Next down 3.1pc, or 192p, to 5936p, while JD Sports slumped 5pc, or 6.95p, to 133.45p. Similar concerns about the cost of living squeeze knocked supermarket Sainsbury’s which lost 1.3pc, or 3.2p, to 240.2p. tesco fared better rising 0.6pc, or 1.6p, to 270.2p.
Housebuilder taylor Wimpey gained 0.6pc, or 0.7p, to 128.75p after it flagged continued strong demand for its properties.
In an update for the first four months of the year, the firm noted that the recent rise in interest rates had ‘not impacted’ demand for new homes, adding that trading was in line with expectations.