Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
The Eastern European low cost airline Wizz Air [LON:WIZZ] has this morning published results for the first quarter. The numbers cover the April-June period and are as bleak as would be expected, with passenger numbers down 93.2% and a load factor of just 55%. However it’s the look ahead that is arguably more important. By the end of June, the carrier was operating at 70% of capacity, compared to an average of 11.5% across the quarter, which the airline believes gives it operational momentum going into the summer. Fleets have also been redeployed to take advantage of market opportunities although given the uncertainty, no forward guidance is being offered.
There’s a Q2 trading update out from Next [LON:NXT], noting full price sales are down 28% for the period, a significantly better figure than had been predicted in the April statement. Critically, the company now believes, based on its central sales scenario, that a full year pre-tax profit of £195m can be generated. Previously these assumptions were pointing towards the company simply breaking even, so that could fuel investor confidence not just for the stock itself but across other mutli-channel retailers, too. The company also notes an unexpected consequence of lockdown has been a lower returns rate at the warehouse. Sales of children’s clothing and homewares have jumped, which are apparently much less likely to be returned than dresses and formalwear. To translate this, although full price sales dispatched fell 17%, this equated to a 9% increase in actual full price sales.
There’s a half year report out from Barclays [LON:BARC] this morning, with pre-tax profits of £1.3 billion being noted, down from the £3 billion seen a year ago. Bad debt provisions have however been pushed higher as the lender prepares for the economic fall out of the COVID pandemic, with a provision of £1.6 billion having been made. Economic uncertainty and the persistence of low interest rates are set to keep conditions challenging for the bank, with the board set to decide on future dividend payments and the capital return policy at the end of the financial year.
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