Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
Shopping centre owners Intu Properties [LON:INTU] have published an update today on its plans to fix the balance sheet. The company had been looking to perform a significant equity raise, but with uncertainty over the ability for targets to be met given underlying equity market volatility, this route won’t be pursued. The process has apparently flushed out some alternative options in terms of funding via alternative capital structures or disposals. The company continues to perform well in terms of footfall against peers, but there’s no escaping the real cost of those CVAs. Shares are down over 90% in the last 12 months.
Preliminary full year results from Hostelworld [LON:HSW] provide an interesting insight as to the online travel sector. The company is essentially a travel agent for low cost hostels worldwide, and perhaps most interestingly notes that marketing costs accounted for 41% of net revenue last year. The company returned to growth in 2019, with that weighted into the second half, but the sector as a whole is clearly exposed to the COVID19 outbreak. The company cannot offer any accurate guidance as the scale of the impact is still to be determined, but if near term trends persist to the end of this month, it’s likely to hit EBITDA by EUR3-4m. The figure for the whole of last year was just EUR20.5m.
Sticking with travel and WizzAir [LON:WIZZ], eastern Europe’s largest low cost airline, has published a quarterly trading update. The company is again responding to COVID19 with spending cuts and route adjustments, but adds that at this point it’s too difficult to predict the extent of the impact on full year numbers. The company believes that once this crisis abates it can return to its solid growth trajectory – the question everyone is asking is just how long this storm might last for.