Contrasting fortunes for a couple of transport companies, with Stagecoach moving higher after its figures but Easyjet losing ground after a boardroom reshuffle.
Stagecoach shares are up 5.5p at 155.4p despite the bus and transport group reporting a 28% fall in first half profits to £75.5m, with rising fuel and pension costs and a slowdown in its US business. The company - recently involved in a proposed merger with rival National Express - still beat expectations, and it raised the half year dividend by 11.1%. Chairman Brian Souter said it had made a good start to the second half of the year and currently trading was in line with forecasts. Panmure Gordon analyst Gert Zonneveld said:
We maintain our buy recommendation on Stagecoach. The shares trade on 10 times this year and 8.8 times next year with a dividend yield of about 4.4% (assuming a 10% increase in full year dividend per share). Furthermore it has a strong balance sheet. We expect the dispute with the Department for Transport regarding the revenue support on South Western to be resolved through arbitration by April next year. The shares would clearly benefit from a favourable outcome.
Meanwhile Easyjet slipped 12.2p to 364.7p after news that chief executive Andy Harrison would leave at the end of June. The airline had been embroiled in a dispute with founder and 38% shareholder Stelios Haji-Iannou.
Overall the market has slipped back ahead of the pre-budget report, with FTSE 100 now down 28.41 points at 5194.72. Brian Myers at odlmarkets.com said:
Today feels like one of those defining moments in our recent financial history. Markets are likely to be paralysed until we get confirmation from then Chancellor about the state of our economy and his plans to revive us.
