Winter losses narrow for easyJet, Rentokil revenue rises in first quarter

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Sharecast News | 18 Apr, 2024

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The FTSE 100 is expected to open 36 points higher on Thursday, having closed up 0.35% on Wednesday at 7,847.99.

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Budget airline easyJet said in an update on Thursday that its winter losses narrowed by more than £50m over the six months through March, with its headline loss before tax expected to be between £340m and £360m. The FTSE 100 company said that despite challenges like fuel cost inflation and Middle East tensions impacting results, targeted capacity growth, productivity gains and flat year-on-year unit costs excluding fuel contributed to its improvement. Additionally, easyJet holidays saw significant profit growth of 206% compared to the first half of 2023, and a 42% increase in customers year-on-year, with strong bookings for the upcoming summer.

Rentokil Initial reported a 4.9% increase in group revenue for the first three months of 2024 on Thursday, with 3.1% attributed to organic revenue growth and continued pricing momentum. The FTSE 100 firm said growth in North America stabilised, with organic revenue up 1.5%, driven by early initiatives of its growth plan. It saw a positive performance across all regions and categories, with particular progress in technician sales leads participation rates, customer retention, and successful pricing strategies.

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The Labour Party is open to the prospect of a takeover of the owner of Royal Mail by the struggling postal group’s Czech billionaire investor, which is considering a renewed approach. EP Group, a conglomerate controlled by Daniel Kretinsky, revealed on Tuesday that it had made a “non-binding indicative proposal” to the board of International Distributions Services (IDS), Royal Mail’s parent company, on April 9 seeking its recommendation for a possible cash offer for the remainder of the shares it does not already own. - The Times

Jeremy Hunt has vowed to go “further and faster” to slash the welfare bill as he warned of an unsustainable rise in the cost of workless benefits. In an interview with the Telegraph, the Chancellor also said he wanted to cut National Insurance by another 2p before the election but stressed that he would only reduce taxes in a “responsible” way. Hunt said getting more people back to work and slashing the benefits bill would form a key part of the Conservative manifesto as he sought to draw a dividing line between the Tories and Labour on welfare. - Telegraph

Hundreds of people could lose their lives if Boeing fails to address quality issues, a whistleblower warned the US Congress on Wednesday. Sam Salehpour, an engineer at the planemaker, told a high-profile hearing on Capitol Hill that he feared “physical violence” after going public with his concerns. There is “no safety culture” at Boeing, he claimed, alleging that employees who raise the alarm are “ignored, marginalised, threatened, sidelined and worse”. - Guardian

The government has launched a last-ditch effort to keep a historic train factory in Derby open in an effort to ensure it can assemble the rolling stock it has been contracted to deliver for HS2. After more than a year during which Alstom, the owners of the Litchurch Lane works, have been warning ministers that it does not have enough work to remain open, the transport secretary last night agreed to a new commitment to build ten more trains for London’s Elizabeth Line. It is understood that a contract for the extra rolling stock for the metro line that runs across the capital will be signed as early as next month. - The Times

The Federal Reserve chair, Jerome Powell, cautioned on Tuesday that persistently elevated inflation will probably delay any Fed interest rate cuts until later this year, opening the door to a period of higher-for-longer rates. “Recent data have clearly not given us greater confidence” that inflation is coming fully under control and “instead indicate that it’s likely to take longer than expected to achieve that confidence”, Powell said during a panel discussion at the Wilson Center. “If higher inflation does persist,” he said, “we can maintain the current level of [interest rates] for as long as needed.” - Guardian

US close

US stocks declined on Wednesday, with the S&P 500 and Nasdaq both hitting two-month lows, as investors significantly scaled back their projections for interest-rate cuts.

The S&P 500 and Nasdaq fell for the fourth straight session, dropping 0.58% and 1.15% respectively, with both indices hitting their lowest levels since 21 February.

The Dow, which had snapped a six-day losing streak on Tuesday, was back in the red, falling 0.12% to 37,753.31.

Weighing on sentiment were comments made on Tuesday by Federal Reserve chair Jerome Powell, who said that recent economic data – such as three straight months of stronger-than-forecast inflation – had "clearly not" given the central bank confidence to start easing monetary policy.

Powell pushed back on market expectations for two or three rate cuts in 2024 – projections that were discussed by Fed officials at their latest meeting.

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