The low cost airline is set to have a turbulent start to the day’s trading following the publication of a half year trading update. Covering the period to 31st March, the winter season is always more challenging for the sector but the fact that the projected losses of between £540m and £560m account for an extra £25m in fuel spend from March and also a £30m increase in the legal provisions doesn’t help. The company notes it is 70% hedged for fuel for the rest of the financial year, where it bought at $706/tonne but with spot prices now at $1500/tonne the problem is clear. Each $100/tonne increase in fuel adds £40m to costs so whilst the company has a healthy balance sheet, the sooner calm is seen in the Gulf the better. The easyJet share price was down 4% shortly after the open.
A rather more upbeat picture from grocers Tesco following the publication of their full year results. Sales were 4.6% higher, profits gained 0.8% and the company achieved its highest market share in a decade as the value proposition resonated with hard-pressed shoppers. The adjusted operating profit for the year ahead is expected to remain broadly flat, with a forecast of £3bn-£3.3bn being called, against today’s print of £3.15bn. The Tesco share price added more than 3% in early trade, recouping some of the week’s earlier losses.
The homewear specialists issued a Q3 update today which saw management raise concerns over the impact of waning consumer confidence on the company’s full year performance. Whilst sales for the period were up against the comparative, full year profitability is still expected to land within the previously cited range, just at the lower end and with no end in sight to the cost of living squeeze, there’s clearly some concern building about where next. The Dunelm share price had slipped almost 5% by 8.20am.
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