A difficult year isn’t getting a whole lot better for International Airlines Group, owner of British Airways and Iberia. Third-quarter revenues were down 83 per cent on last year, with passenger numbers down 88 per cent. Planes have been flying less than half full.
More worrying still is the outlook for the rest of 2020, which has deteriorated even further in the past six weeks. IAG now plans to run no more than 30 per cent of last year’s schedule for the final months of the year, and will miss a key financial target. It will no longer reach break-even point in terms of net cash flow from operating activities during the fourth quarter as it had hoped.
IAG has plenty of liquidity, after completing its €2.7bn cash call earlier this month. But the picture as Europe enters second lockdowns is nonetheless bleak.
Unilever reported better than expected sales growth in the three months to September, with the consumer goods giant benefiting from high demand for “hand and home hygiene” products, and food to eat at home. Underlying sales growth was 4.4 per cent higher than last year, though turnover was hit by foreign exchange headwinds. Earlier on in the pandemic people had cut back on deodorant and skincare; happily declines in those categories have slowed, while Unilever’s laundry and hair care products returned to growth.
Daily Mail and General Trust said profits for the year to September are set to be higher than the market has priced in. The most bullish analyst had forecast adjusted operating profits of £80m; DMGT said in fact the figure will be between £85m and £90m. Better than expected September ad revenues and pent-up property demand helped lift performance.
West End landlord Shaftesbury is raising almost £300m through a cash call designed to shore up its balance sheet. Tourist numbers visiting the group’s London property portfolio have collapsed, affecting rent collection. The new shares are priced at 400p each; shares in the £1.5bn market cap company closed at just under 500p yesterday.
Also out today are updates from builders' merchant Travis Perkins, events group Relx, price comparison site Moneysupermarket, car dealer Pendragon and miner Anglo American.
Beyond the Square Mile
Asset managers are seeking to raise almost $300bn to plough into private lending deals like leveraged buyouts, private debt, real estate and infrastructure funds. The rush into the sector has been swift, with asset managers pitching 520 private credit funds to investors in October, up from 436 at the year’s start and just under 400 in January 2019, according to data compiled by Prequin and the Financial Times.
Tesla delivered a fifth straight quarterly profit in the three months to the end of September, as the electric vehicle maker recovered from a coronavirus-induced shutdown in March and reiterated its goal to deliver a record-breaking 500,000 cars in 2020. Revenues jumped 39 per cent from a year ago to $8.77bn, beating analysts’ estimates of $8.3bn. Net profit rose 131 per cent to $331m. The sale of regulatory credits — in which Tesla sells zero-emission credits from various governments to other carmakers — was again a source of hundreds of millions of dollars.
One of the biggest US public pension funds has frozen new investments with Apollo Global Management, as growing concerns about founder Leon Black’s relationship with the late paedophile Jeffrey Epstein take a toll on the $414bn private equity group. The Pennsylvania Public School Employees’ Retirement System, which contributed $225m to the New York firm’s latest buyout vehicle, said it made the decision after reports emerged that Epstein had received at least $50m in payments from Mr Black since 2008.
Essential comment before you go
If we really want to change the make-up of our boardrooms, we need to find people who represent not only investors, but everyone else — from buyers, to suppliers, to local communities, to our natural environment.
Not all tech companies benefit from the homeworking boom. It has already come to an end for Avast, the London-listed Czech computer anti-virus company.
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