Three things you need to know in the financial markets this morning from investment writer, Tony Cross
There’s a trading update out from Flybe this morning which comes with a profit downgrade for the year, the note making clear high up that market expectations will be missed despite some healthy cost savings being made. The sector as a whole is facing a number of issues, including rising fuel prices and currency volatility, but an interesting line shows that whilst yields dropped 2%, half of this was attributed to a change in legislation at the start of the year meaning credit card fees could no longer be applied.
- IAG shares recover but more trouble ahead for Ryanair and easyJet
- Airline shares and the new runway at Heathrow
There’s an uninspiring trading update out from the educational publisher Pearson today, which shows flat sales and everything being in line with expectations for the full year. Arguably the stand out point however is the company’s expected effective tax rate, Previously this had been put at 20%, but a series of one-off benefits and a review of the implications of US tax reform now has the company expecting a 5%-7% tax credit, equivalent to adding 19p to the EPS.
Warehouse space has been increasingly in demand as consumers continue to move online and today’s trading update from SEGRO underlines that trend. That said, speculative project development has pushed down the company’s occupancy rate slightly, although with headline rents increasing faster than previously, investors may be willing to take the glass half full view. Full year results will be published on February 15th.