(Alliance News) - Anglo-German holiday firm Tui lost EUR1.5 billion in just three months, as the Covid-19 pandemic kept Britons and Europeans at home, it revealed on Thursday.
Tui reported a pretax loss of EUR1.46 billion in the third quarter ended June 30, swung from a EUR60 million profit a year before, as revenue plunged 98% to EUR75 million.
Tui said partial operations have successfully resumed since mid-May. It expects to be broadly operationally cash break-even in its fourth quarter. It said financial 2021, which will begin on October 1, will be a transition year, with business not getting back to normal until financial 2022.
The huge loss caused by the virus lockdown and travel restrictions forced Tui to turn to the German government for state aid. Following recent liquidity agreements, Tui has total cash and lending facilities of EUR2.4 billion, it said.
Tui shares were down 6.7% early Thursday in London. The stock is down by two-thirds since 2020 began.
Here is what you need to know at the London market open:
----------
MARKETS
----------
FTSE 100: down 1.1% at 6,214.32
----------
Hang Seng: down 0.1% at 25,216.33
Nikkei 225: closed up 1.8% at 23,249.61
DJIA: closed up 289.93 points, or 1.1%, at 27,976.84
S&P 500: closed up 46.66 points, or 1.4%, at 3,380.35
----------
GBP: up at USD1.3072 (USD1.3044)
EUR: up at USD1.1833 (USD1.1794)
Gold: down at USD1,933.67 per ounce (USD1,948.50)
Oil (Brent): unchanged at USD45.24 a barrel (USD45.26)
(changes since previous London equities close)
----------
ECONOMICS AND GENERAL
----------
Thursday's Key Economic Events still to come
1100 BST Ireland consumer price index
1000 CEST France IEA oil market report
0830 EDT US initial jobless claims
1030 EDT US EIA weekly natural gas storage report
1630 EDT US foreign central bank holdings
----------
Some 3.4 million people in England have been infected with Covid-19, a figure far higher than previous estimates, a study suggests. The results come from the world's largest home testing programme to find antibodies for the coronavirus, a study involving more than 100,000 volunteers and carried out by Imperial College London. Conducted with the use of a simple finger-prick home test said to be easy and accurate enough for mass surveillance studies, the programme suggested 6% of England's population had already been infected with Covid-19 by July 13. The 3.4 million people that represents is many times higher than the tally of known cases for the entire UK as posted by Johns Hopkins University in the US – whose aggregated numbers have become the main reference for monitoring the disease – and which listed the country's case numbers at 315,546 as of Thursday morning.
----------
The UK housing market could be heading for a boom followed by a bust, according to feedback gathered by surveyors. The Royal Institution of Chartered Surveyors said anecdotal evidence suggests that the temporary stamp duty holiday introduced from July 8 in England and Wales is playing a significant role in lifting demand. The stamp duty threshold for homes has been temporarily raised to GBP500,000, saving some buyers as much as GBP15,000, but the threshold will be lowered back to GBP125,000 from April 1 2021. But Rics' July survey of property professionals found that the recent impetus seen in the housing market is not expected to continue as wider government support measures are gradually phased out later in the year.
----------
US Democrats and the White House were no closer to agreeing on a new emergency pandemic spending package Wednesday as Treasury Secretary Steven Mnuchin traded blame with House Speaker Nancy Pelosi over failed negotiations. President Donald Trump's administration and Democratic leadership have for weeks been discussing a new round of emergency aid to workers and businesses hit hard by the coronavirus crisis, but have been unable to agree on how much to spend. Mnuchin said he spoke with Pelosi by phone but that she was unwilling to budge unless the White House agreed to spend at least USD2 trillion as part of the new measure – a figure rejected by Republicans. In a joint statement, Pelosi and top Senate Democrat Chuck Schumer accused the White House of intransigence and refusing to budge from their proposal to spend only USD1 trillion on the new measure.
----------
Data confirmed Germany entered annual price deflation territory in July. Year-on-year, Germany's consumer prices fell 0.1%, confirming the preliminary reading, after 0.9% growth in June. "After the inflation rate increased slightly in June 2020, the value added tax reduction, which is a measure of the Federal Government's stimulus package, had a downward effect on the development of prices," Destatis noted.
----------
Japan producer prices improved on an annual basis in July, data from the Bank of Japan showed. Producer prices rose 0.6% month-on-month in July, matching June's rise. Annually, prices fell 0.9% but this was more moderate than June's 1.6% decline and May's 2.8% fall.
----------
BROKER RATING CHANGES
----------
BERENBERG CUTS SOFTCAT TO 'HOLD' ('BUY') - TARGET 1250 (1,100) PENCE
----------
BARCLAYS RAISES JOHN LAING TO 'OVERWEIGHT' (EQUAL-WEIGHT) - TARGET 365 (395) PENCE
----------
LIBERUM RAISES ASOS TO 'HOLD' (SELL) - PRICE TARGET 5000 (2450) PENCE
----------
COMPANIES - FTSE 100
----------
GVC Holdings said it was encouraged by its first-half performance despite a challenging backdrop due to the coronavirus pandemic. For the half-year ended June 30, net gaming revenue was down 11% to GBP1.61 billion from GBP1.81 billion a year before, and underlying pretax profit was down 75% to GBP55.4 million from GBP212.1 million. On a reported basis, GVC swung to a pretax profit of GBP22.7 million from a GBP12.3 million loss a year before. UK retail like-for-like net gaming revenue was down 50% to GBP277.9 million, which the company attributed to cancelled sporting events due to lockdown restrictions. GVC scrapped its interim dividend, having paid out 17.6 pence last year, citing uncertainty brought about by Covid-19.
----------
COMPANIES - FTSE 250
----------
Watches of Switzerland said it delivered a strong performance in its maiden year as a public company. For the financial year ended April 26, revenue was up 6% to GBP819.3 million from GBP797.7 million in financial 2019, and adjusted pretax profit was GBP49.4 million, up from GBP26.5 million. For financial 2021, Watches of Switzerland expects revenue in a range between GBP840 million to GBP860 million, on the basis of a continued strong luxury watch market in the UK and US. "While we began 2021 with our global store portfolio closed due to the pandemic, we were well prepared for the re-opening of our stores during Q1 and trading has exceeded our expectations in both the UK and the US," said Chief Executive Brian Duffy.
----------
National Express said 2020 had started extremely well with outstanding results in January and February; however Covid-19 then had an immediate and unprecedented effect on all of its transport businesses. For the half-year ended June 30, revenue was GBP1.03 billion, down 23% from GBP1.34 billion last year, and the company swung to a pretax loss of GBP122.2 million, from a GBP88.4 million profit last year. Looking ahead, given the uncertainty on the duration of Covid-19, National Express said it is not currently providing profit guidance for 2020.
----------
COMPANIES - GLOBAL
----------
Deutsche Telekom reported a sharp rise in second quarter revenue and lifted its earnings outlook following subsidiary T-Mobile US's merger with Sprint. Revenue shot up 38% in the second quarter to EUR27.0 billion, but pretax profit dipped 2.4% to EUR1.84 billion. For the first half overall, revenue was up 20% to EUR46.98 billion, and pretax profit down 9.4% to EUR3.38 billion. In its US segment, which includes T-Mobile US, revenue surged 76% in the second quarter to EUR17.30 billion. T-Mobile closed its takeover of smaller rival Sprint in April in a deal worth USD31.6 billion. Bonn-based Deutsche Telekom described the merger as "the culmination of Deutsche Telekom's successful strategy for its US operations".
----------
Japanese industrial conglomerate Mitsubishi posted a drop in first-quarter profit. Revenue for the three months to June 30, the firm's financial first quarter, dropped 32% year-on-year to JPY2.667 trillion, worth around USD25 billion. Pretax profit dived 75% to JPY55.98 billion and attributable profit was down 77% to JPY36.61 billion. The fall in revenue was mainly due to lower transaction volumes in the Petroleum and Steel businesses, while profit also suffered from a fall in market prices for the Australian metallurgical coal unit and a drop in franchise commissions in the convenience store arm. Mitsubishi also pointed to impairments for property, plant and equipment and to lower vehicle sales for Mitsubishi Motors Corp. For the full financial year, ending March 31, 2021, Mitsubishi expects attributable profit of JPY200.00 billion, which would be down 63% on the year before.
----------
Thursday's Shareholder Meetings
Castings
----------
By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.
