First quarter revenue slumps for easyJet, Diageo increases interim dividend

London open

The FTSE 100 is expected to open 62 points lower on Thursday, having closed down 1.3% on Wednesday at 6,567.37.

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Budget airline easyJet said it expected to fly no more than 10% of 2019 capacity in the second quarter as the coronavirus pandemic almost wiped out revenue for the three months to December 31. The company, hammered by the slump in passenger numbers due to Covid-19, said first quarter group revenue slumped 88% to £165m, while passenger numbers plummeted 87% to 2.9 million.

Diageo increased its interim dividend as the drinks company reported first-half operating profit down 8.3% to £2.2bn. Net sales for the six months to the end of December fell 4.5% to £6.9bn as a 1% increase in organic sales was more than offset by currency movements. Diageo increased the dividend by 2% to 27.96p a share.

3i Group reported a “resilient” third quarter on Thursday, with its net asset value per share rising 936p from 905p, despite a negative effect of £156m effect of sterling strengthening in the quarter. The FTSE 100 private equity company reported a total return of 18.7% for the nine months ended 31 December, with and 92% of its top 20 private equity portfolio by value having grown last-12-months earnings to September.

Newspaper round-up

UK car production slumped to its lowest level since 1984 last year amid the turmoil caused by the coronavirus pandemic, and Nissan overtook Jaguar Land Rover as the biggest British manufacturer. The output of British car factories dropped by 29% compared with the year before – to about 921,000. It was the first time annual production had fallen below 1m since 2009, during the depths of the financial crisis. - Guardian

The three largest shareholders in GameStop, the video game retailer at the center of a frenzied duel between Wall Street and small investors, have made more than $2bn from the company’s astronomic recent share rise. Stock in the company continued its vertiginous rise on Wednesday, hitting a fresh 52-week high of $354.83, making the 13% stake held by Ryan Cohen, 34, GameStop’s largest single shareholder, worth more than $1.3bn. - Guardian

Tesla is celebrating its first ever year-long run of profitability despite chaotic factory closures resulting from the Covid-19 regulations in a turbulent year. The electric carmaker made $721m in 2020, with $270m generated in the last three months of the year thanks to “substantial growth” in deliveries. It fell just shy of its ambitious target of shipping 500,000 cars in 2020, but said it expected to see annual 50pc growth in deliveries each year and was on track to exceed that in 2021, Tesla announced on Wednesday. - Telegraph

The government has been criticised for the “piecemeal” nature of its disclosure of hundreds of thousands of recipients of emergency state support. Revenue & Customs this week published the names of about 750,000 employers to have accessed the £46.4 billion wage furlough scheme in what it said was “part of our commitment to transparency and to deter fraudulent claims”. - The Times

The number of empty shops and offices in Britain increased at the fastest pace in decades at the end of last year, an influential survey has found. The Royal Institution of Chartered Surveyors’ quarterly survey found that the retail sector experienced its sharpest increase in vacancy levels in the three months to the end of December since the survey began 30 years ago. Availability of office space recorded its strongest rate of increase since the global financial crisis. - The Times

US close

Stocks on Wall Street had their worst day in months on Wednesday, as market participants digested the latest rate decision from the Federal Reserve, as well as updates from Apple, Facebook and Tesla.

At the close, the Dow Jones Industrial Average was down 2.05% at 30,303.17, the S&P 500 lost 2.57% to 3,750.77, and the Nasdaq Composite was 2.61% weaker at 13.270.60.

Late in the session, the Federal Reserve sated market expectations by standing pat on interest rate targets, while maintaining asset purchases of at least $120bn every month.

““The economy is a long way from our monetary policy and inflation goals, and it’s likely to take some time for substantial further progress to be achieved,” said the central bank’s chair, Jerome Powell, in his press conference after the meeting.

He said policy would remain “highly accommodative” as the country’s economy climbed its way out of the Covid-19 hole.