FTSE 100: TUI soars on narrower losses; Rolls-Royce plummets
TUI shares soared to the top of the FTSE 100 risers list as the Anglo-German travel firm said its first quarter loss narrowed as revenue grew and it expected to grow underlying earnings 10% for the full year.
The company plans to continue making disposals as part of its growth strategy, having sold Hotelbeds Group in September and on Monday TUI announced it would sell Travelopia, its portfolio of specialist travel brands to KKR for around £325m.
The company is also in talks with Etihad for the sale of TUI Fly to create a new airline.
With UK bookings remaining significantly ahead of the previous year, quarterly underlying losses before interest, tax and amortisation (EBITA) narrowed 17% to €66.7m, compared to the previous year.
TUI also swung to an underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of €29.8m, from a €7.5m loss, while revenue increased 2.3% to £3.28bn.
Shares in retailer Next were also in favour as the firm announced that John Barton will be retiring as non-executive chairman and stepping down from the board on 1 August, to be succeeded by Michael Roney, the former chief executive of Bunzl.
Barton, who became a member of the board in 2002, was appointed deputy chairman in 2004 and chairman in 2006.
On the other side of the ledger, aircraft engine maker Rolls-Royce led the fallers after it posted a record £4.6bn pre-tax loss but revealed a better than expected underlying profit and that efforts to cut costs as part of its transformation programme were at the top end of expectations.
For 2017 the engine maker said it expected "modest" improvement in sales and targeted free cash flow to be "similar to 2016".
The pre-tax loss, which is one of the biggest in corporate history, reflects a £671m corruption fine but more so the collapse of the pound, which led to a £4.4bn non-cash write-down of the company's derivatives contracts.
Revenue for the calendar year of £14.96bn was up 9% on a reported level, though underlying sales falling 2% to £13.78bn due to a weakness in the marine market coming from the oil-price slump.
Anglo American shares were lower as chairman John Parker said he planned to step down from the role in 2017 after eight years.
Senior independent director Philip Hampton will now lead a process to identify candidates with appropriate global listed company boardroom experience and Parker will continue to chair the board until a successor is found.
Market Movers
FTSE 100 (UKX) 7,276.56 -0.03%
FTSE 250 (MCX) 18,772.84 0.07%
techMARK (TASX) 3,342.65 -0.18%
FTSE 100 - Risers
TUI AG Reg Shs (DI) (TUI) 1,224.00p 5.79%
Pearson (PSON) 668.00p 2.61%
Capita (CPI) 526.00p 2.43%
Fresnillo (FRES) 1,549.00p 1.64%
Royal Bank of Scotland Group (RBS) 237.70p 1.32%
International Consolidated Airlines Group SA (CDI) (IAG) 499.90p 1.13%
Next (NXT) 3,975.00p 1.12%
Old Mutual (OML) 215.20p 1.08%
Randgold Resources Ltd. (RRS) 7,490.00p 1.08%
Ashtead Group (AHT) 1,671.00p 0.97%
FTSE 100 - Fallers
Rolls-Royce Holdings (RR.) 716.50p -3.18%
Anglo American (AAL) 1,381.50p -1.99%
BAE Systems (BA.) 605.50p -1.70%
Rio Tinto (RIO) 3,618.50p -1.66%
Reckitt Benckiser Group (RB.) 7,000.00p -1.06%
Burberry Group (BRBY) 1,620.00p -1.04%
Micro Focus International (MCRO) 2,234.00p -0.89%
Prudential (PRU) 1,609.00p -0.80%
Smiths Group (SMIN) 1,520.00p -0.78%
Johnson Matthey (JMAT) 3,130.00p -0.76%