Three things you need to know as the UK financial markets open, from Tony Cross.
#1. Share buyback announced from British Airways owner IAG
Airline operator IAG LON:IAG has published Q3 numbers this morning, noting an 8% increase in revenues, operating profits up by around 15% and revenue on an available set per kilometre basis 1.2% higher. The company also announced a €350m share buyback and management note that the strong financial performance is expected to continue for the remainder of the year. However the group’s operating profit was reduced by €96 million due to adverse exchange rate impacts.
#2. Serco loses Australian immigration contract
A “contract loss” announcement from the outsourcing specialist Serco LON:SRP is out this morning after the company failed in its rebid for the running of Australian immigration onshore detention facilities. This contract has been in place for 15 years and had it been retained would have delivered around £18m of operating profit next year.
The company also notes that separately, changes to UK National Insurance Contributions will cost an additional £20m. Guidance for FY24 remains unchanged but impacts are set to lie ahead.
#3. Housebuilder Vistry sees impact of accounting errors worsening
Housebuilder Vistry LON:VTY has a trading update out for the period from 1st July to 7th November, along with an update on previously reported accounting issues in the South division. The financial impact here is now seen as being larger than previously stated following a review by external accountants. Full year pre-tax profits are now expected to be £300m, down from the £350m noted a month ago.
On a more upbeat note, year to date sales are up 42%, although that did slow over the last couple of months, presumably with pre-budget buyer uncertainty. Employer NIC changes will add £5m to the wage bill next year and the company also anticipates pressure on build costs returning in ’25.
