London’s FTSE 100 follows Asia lower on Monday with a 41.4 point drop in the blue-chip benchmark to 7,637.4 as trade war concerns continue to trouble investors, notable weakness seen in travel stocks, tobacco companies and housebuilders.
Budget airline Ryanair (RYA) loses altitude, the shares off 4.5% at €14.8 on news of a 20% drop in first quarter profits to €319m due to higher fuel and pilot costs, competition in the European market and the earlier timing of Easter which led to a 4% decline in average fares.
Ryanair’s combative boss Michael O’Leary expects the weak pricing environment to continue due to the World Cup, the Northern European heat wave and customer uncertainty about pilot strikes, although the low cost carrier sticks with full year guidance for profit after tax in the €1.25bn-to-€1.35bn range. LaudaMotion, in which Ryanair will soon own a 75% stake, has been hit hard by weaker fare environment and is expected to lose €150m in its first year but break even within three.
Financial services software supplier Microgen (MCGN) sparks up 10p to 395p on strong half year results, adjusted operating profit up 12% to £7.4m in the six months to June as its Aptitude Software and Microgen Financial Systems arms continued to make good progress. Armed with £11.6m cash, Microgen also hikes the half time dividend 10% to 2.2p.
Convenience stores and newsagents operator McColl’s Retail (MCLS) slumps 10.2% to 188.5p after posting a 2.7% drop in first half like-for-like sales and a £2.2m fall in profit before tax to £2.3m caused by ‘unprecedented supply chain disruption’ due to the collapse of cigarette wholesaler Palmer & Harvey.
McColl’s warns full year adjusted earnings before interest taxation, depreciation and amortisation (EBITDA) will be flat and cautions that ‘looking further ahead, to 2019 and beyond, it will remain important to manage intense cost pressures in the business, whilst also investing in the customer offer to maintain our competitive position.’ Also hitting sentiment is the resignation of finance director Simon Fuller, who is off to take up the equivalent role at Reach.
Also losing ground is Ascential (ASCL), the media outfit dropping 3.8% to 442p after reporting a 4.5% decline in first half EBITDA to £42.5m reflecting investment in the launch of Money20/20 Asia, preparations for the inaugural edition of Money20/20 in China in the second half as well as lower revenues from its Cannes Lions event.
Mission Marketing (TMMG:AIM) ticks 5.3% higher to 50p on news of ‘an excellent start’, healthy organic growth and new business wins giving management confidence in again reporting strong double digit profit growth for the first half.
Technology venture capital business Draper Esprit (GROW:AIM) improves 5.9% to 630p on a bullish AGM update, highlighting continued positive momentum in the first four months of the financial year to March 2019 and also announcing a £7m investment in Cambridge-based surgical guidance company Endomag.