Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
Intercontinental Hotels [LON:IHG], the owners of brands including Holiday Inn, have published a pre-close trading update today. COVID continues to dominate but the company notes the pace of hotel re-openings accelerating, with only 10% of properties still shuttered. RevPAR (revenue per available room) is expected to be down 52% for the half year. The note goes into some detail over the resilience of its mid-range properties in the US and how these have bounced back well, compared to the top end of the market. In light of many US states now struggling with a resurgence of infections, this may yet prove short lived.
Housebuilder Redrow [LON:RDW] have published a trading update this morning following its year-end and running through the return to work. Although the company did furlough staff, it has elected not to use the government support on offer and is in the process of returning the cash taken, which again shows some interesting positioning which has been seen across most of the sector. Expectations were for profits to be weighted in the second half of the year so these have taken a hit, with year on year turnover set to be around one third lower. There’s also an interesting line on strategy, stating that in the wake of the pandemic, home buyer priorities are changing with demand for more inside and outside space. As such the company is scaling back development in London to account for this. Profits are set to be substantially lower than they were in 2019.
On The Beach
There’s a half year update from On The Beach [LON:OTB] out today. The company has again been hit by COVID-19 with a swathe of cancellations taking a toll on the business. Unlike some others in the sector however they benefit from an asset light model and also have trust account protection for customer monies. April bookings were down 90% and although there has been a boost in demand of late, this is starting from a very low base. The board believes it is well positioned to ride any growth wave and has access to a £75m RCF which so far remains undrawn.
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