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Top News: Ryanair expects strong rebound in customer numbers
Ryanair revealed an uptick in revenue in the first quarter of its financial year after carrying far more passengers as travel restrictions ease, but said its losses ballooned as the coronavirus pandemic ‘continued to wreak havoc on our business’.
The airline carried 8.1 million passengers in the three months to the end of June, far below pre-pandemic levels but a welcome improvement from the 400,000 carried the year before when travel was mostly grounded.
Revenue increased as a result to EUR371 million from EUR125 million, but came in slightly below the EUR406.4 million expected by analysts. Ryanair’s quarterly net loss swelled to EUR273 million from EUR185 million the year before.
‘Covid-19 continued to wreak havoc on our business during Q1 with most Easter flights cancelled and a slower than expected easing of EU government travel restrictions into May and June. Significant uncertainty around travel green lists (particularly in the UK) and extreme government caution in Ireland meant that Q1 bookings were close-in and at low fares,’ said Ryanair’s chief executive Michael O’Leary.
‘The 1st July rollout of EU Digital Covid Certificates and the scrapping of quarantine for vaccinated arrivals to the UK from mid-July has seen a surge in bookings over recent weeks. Pricing remains below pre Covid-19 levels and there will continue to be great value for Ryanair guests travelling this summer as we focus on recovering traffic, jobs and tourism across our European network,’ he added.
Ryanair said it expects traffic to rise to almost 9 million passengers in July alone – more than what it carried in the entirety of the first quarter and a significant bump up from the 5 million passengers it carried last month.
The airline refrained from providing full-year guidance due to how close people are booking before travelling, stating it has ‘close to zero’ visibility in what to expect. However, Ryanair did say it now expected to carry 90 million to 100 million passengers over the full year, up from its previous guidance that it would hit the lower end of 80 million to 120 million passengers.
Ryanair is tentatively targeting ‘somewhere between a small loss and breakeven’ over the full year.
Ryanair shares jumped 2.3% in early trade this morning at 1614.7 euro cents.
‘We are seeing a strong rebound of pent up travel demand into August & September and we expect this to continue into the second half of FY22, with pre Covid-19 growth planned to resume strongly in summer 2022,’ said O’Leary.
Cranswick sales continue to grow despite tough comparatives
Cranswick revealed sales have continued to rise despite coming up against tougher comparatives from when demand exploded last year during lockdown, boosted by the addition of extra capacity.
The meat and food producer said revenue jumped 9.6% in the 13 weeks to June 26 compared to the same period a year earlier, when demand exploded as people started to eat more at-home during lockdown, resulting in a 24.8% revenue rise in the 13 weeks to June 27, 2020.
Cranswick said volumes were up 7.7% in the first quarter and that the continued growth in revenue reflects the ‘gradual but sustained recovery of the food to go and food service channel’. That was also boosted by the uplift in capacity at its Eye poultry facility to 1.4 million birds per week from 1.1 million, as well as the start of commercial output at its new cooked bacon facility in Hull.
Cranswick said work on the new premium breaded poultry facility in Hull is also ‘progressing well’.
UK pig prices were 9% lower than the year before, but experienced a 12% rise throughout the three-month period.
‘The outlook for the current financial year remains in line with the board's expectations,’ said Cranswick. ‘The board is confident that continued focus on the strengths of the company, which include its long-standing customer relationships, breadth and quality of products, robust financial position and industry leading asset infrastructure, will support the further successful development of the group during the current year and over the longer term.’
The update was released ahead of Cranswick holding its annual general meeting today, which will see chairman Martin Davey step down. He has been with Cranswick for 36 years and has held the role of chairman since 2004. He will remain in an advisory role until May 2022.
Cranswick also revealed it will release interim results covering the 26 weeks to September 25 on Tuesday November 23.
Cranswick shares were trading broadly flat in early this morning at 4009.0p.
Pennon and Severn Trent given green light to raise prices
The UK’s water regulator Ofwat has said water companies will be allowed to temporarily increase their prices charged to businesses in order to battle against higher levels of customer debt caused by the pandemic.
Ofwat said lockdown rules that have been in place since March 2020 could leave water firms with higher levels of customer debt as businesses have struggled. The fact Ofwat has introduced stronger protection for businesses during the pandemic and forced water firms to abide by price caps has also limited the industry’s ability to react during the last 18 months.
The regulator’s target is for bad debt costs in the business retail market not to exceed 2% of non-household revenue, but said this has now been exceeded and prompted it to take action.
Firstly, Ofwat intends to adjust the price cap to allow the industry to raise prices so they can recover excess bad costs. The industry will be allowed to up the maximum price they charge customers from April 2022 and Ofwat says this makes sense in the long-term as it reduces the risk of any water suppliers going bust.
‘These decisions aim to protect the interests of non-household customers in the short and longer term, including from the risk of systemic Retailer failure as the business retail market continues to feel the impacts of COVID-19,’ said the regulator.
However, to also protect customers, Ofwat said water companies will have to bear 25% of bad debt costs where these are more than 2% and non-household customers will bear the other 75%. It also plans to start ‘smoothing’ price increases over time by ensuring any adjustments to price caps will have to remain in place for at least two years.
‘By implementing market-wide adjustments to price caps, we aim to minimise any additional costs for customers in the shorter term by promoting efficiency and supporting competition,’ Ofwat added.
Ofwat is also considering other options where it is yet to make a final decision. This includes asking the industry to pool together the excess costs from bad debt. It also said that if bad debt costs fall or improve compared to its 2% target than the price increase may not be necessary.
Further consultations will now be held with the industry and the proposed adjustments to price caps should be made by the end of the year. A wider review of price caps will happen ‘later in 2021’.
Water stocks were trading lower this morning, with Pennon shares down 0.3% at 1250p and Severn Trent shares down 0.5% at 2731.5p.
AstraZeneca sees Alexion’s Ultomiris recommended for EU approval
AstraZeneca said it has been recommended that the approvals of Alexion’s Ultomiris should be expanded to cover children and adolescents suffering from paroxysmal nocturnal haemoglobinuria (PNH).
The recommendation has come from the Committee for Medical Products for Human Use of the European Medicines Agency (EMA), which was based on the Phase III clinical trial results in children and adolescents suffering from the rare disease and blood disorder. The EMA will still have to make the final decision.
‘This trial demonstrated that Ultomiris was effective in achieving complete C5 complement inhibition through 26 weeks for the treatment of children and adolescents up to 18 years of age with PNH. Additionally, Ultomiris had no reported treatment-related severe adverse events, and no patients discontinued treatment during the primary evaluation period or experienced breakthrough haemolysis, which can lead to disabling or potentially fatal blood clots,’ said AstraZeneca.
The drug was approved for use in adults back in 2019 and can now be used on children over 10 kilograms and certain adolescents.
AstraZeneca and Alexion Pharmaceuticals completed their mega-merger last week.
AstraZeneca shares were down 0.2% in early trade this morning at 8470.0p.
Carnival sees Princess Cruises and Holland America Line restart US operations
Carnival said Princess Cruises and Holland America Line both restarted operations in the US over the weekend by setting-off from the Port of Seattle as the cruise line tries to get back on its feet after being anchored down the by the pandemic.
Holland America Line kicked-off its Alaska season by the Nieuw Amsterdam ship setting sail from Seattle on Saturday while Princess Cruises saw its Majestic Princess ship leave the port on Sunday. Each line will conduct 10 cruises that sail out of Seattle through until September.
‘This marks the return to cruising and Alaska for both lines, which combined have more than 125 years of experience bringing cruisers to The Great Land. Historically, one in two guests who cruise to Alaska sail on Princess or Holland America,’ said Carnival.
Both cruise lines have been working out of Seattle for over 20 years and contributes more than $364,000 in provisioning, taxes and spending during a typical full season.
Carnival shares were down 1.3% in early trade this morning at 1423.6p.
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