Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
Full year results from Trainline plc [LON:TRN] are out this morning. The company had a bumper 12 months, with sales up 17%, driving a 24% increase in revenues and a more than three-fold increase in adjusted earnings per share. However this only covered the period to February 29th, before the COVID-19 lockdowns took hold across Europe and the company notes that volumes are currently down more than 95%. Mitigating action has been taken and management states that with £150m liquidity headroom and outgoings cut to £8m-£9m per month, they can ride this storm out. The company notes that the pandemic will drive more people to make digital ticket purchases as the public look to reduce points of contact, but success is also going to be reliant on demand for public transport returning.
There’s a first quarter update from IHG [LON:IHG], the owner of a raft of hotel brands including Holiday Inn and Intercontinental. The COIVD-19 pandemic has rattled the hospitality and leisure sector, with the business noting that RevPAR – revenue per available room – has been decimated. The Q1 figure is down 25%, March was down by 55% and expectations are that April will have slumped by around 80%. However, the global footprint of the business may lend some support with Chinese properties now coming back on stream and the company has a lot of liquidity. Even at zero occupancy, the company can run for 18 months, but it’s important to bear in mind this is an asset-light business, which typically just owns the brand, rather than the building itself.
Quarterly results from IAG [LON:IAG] are out this morning, too, covering the period to March 31st. The group owns airlines including British Airways, Iberia and Aer Lingus, and has understandably been hit hard by COVID-19 and although the quarter in question saw a mere 10% drop in passengers, with fleets largely grounded a meaningful return to service is unlikely to be seen before Q3. Passenger demand is expected to be suppressed until 2023 at the earliest.
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