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Ryanair said it was having to cut prices on flights to boost demand after the emergence of the Omicron variant caused a last-minute collapse in bookings in the run-up to Christmas and the new year.
With only two months to go until the end of its financial year, Ryanair warned the outlook for pricing and yields remained “hugely uncertain”. It said it could make a full-year loss of anything from €250m to €450m after cutting its guidance days before Christmas.
Passengers currently required “significant price stimulation at lower prices” to fill planes, and the airline warned investors to expect further disruption from coronavirus rather than a smooth return to normal.
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Estate agent Purplebricks swung to a loss in the six months to October after fee income fell by almost 30 per cent and the number of instructions dropped by close to 40 per cent. Purplebricks said that there continued to be a “significant imbalance” between the strong demand for housing and limited supply that has driven up prices. The supply squeeze has hit instructions and gross margins, while costs are rising as Purplebricks moves to a model where it fully employs its agents.
Magic circle law firm Freshfields handed out extra bonuses to its London-based private equity lawyers last year as UK firms battle an exodus to US rivals. The payouts — on top of the firm-wide bonus scheme — amounted to about £50,000 for some mid-ranking lawyers, according to one person familiar with the matter.
The activist Cevian is pushing for a sweeping overhaul at Vodafone, with a portfolio restructure, strategy revamp in key markets and board refresh all on the laundry list. Cevian has built an undisclosed stake in the FTSE 100 group and has been engaging with its board and management for months, our team report. Consolidation with mobile operators in markets including Spain, Italy and the UK is high on the agenda. Shares will be in focus today.
The private-equity owned group behind Cinch and WeBuyAnyCar has built a 19.9 per cent stake in car dealer Lookers. Constellation Automotive struck a deal to buy rival dealership Marshall Motor last month.
Education publisher Pearson is buying up Credly, a provider of workplace digital credentials and certifications. Pearson is paying $140m for the 80 per cent it does not already own, plus another $20m due later. Credly had revenues of $13m last year, up almost 50 per cent on the year before.
Week in the City
On the schedule for Tuesday is a first quarter update from challenger bank Virgin Money, which is likely to be rather more dry than the interview boss David Duffy gave to The Sunday Times yesterday in which he showed off his three phones, two laptops and array of photo-friendly equipment. There’s also monthly house price data from Nationwide.
Wednesday brings a third-quarter trading update from Vodafone which will come under far closer scrutiny than usual now the telecoms group is under attack (or at least pressure) from activist Cevian. Commodities giant Glencore publishes a production update ahead of full-year results in a fortnight’s time. FTSE 250 group Playtech meanwhile holds shareholder meetings to vote on the takeover offer from Aristocrat Leisure — a deal that may yet be blocked by a group of Asia-based investors. Tobacco group Imperial Brands holds its AGM and utility Severn Trent has a quarterly update.
Another day, another update from a telecoms group with an unwelcome activist: on Thursday it’s BT (where Patrick Drahi’s vehicle is on the register). Shell publishes its fourth-quarter results, while the Bank of England monetary policy meeting will be the event of the week (markets are expecting the first back-to-back rate rise since 2004). Media group Future has its AGM, where a backlash is expected over boss Zillah Byng-Thorne’s bonus for the second year in a row.
On Friday, the only update of note is a trading statement from travel food retailer SSP: December will have been pretty bleak, so expect focus to be on the outlook now WFH guidance has gone instead.
Beyond the Square Mile
Software company Citrix is nearing a $13bn sale to Elliott and Vista Equity in what would be one of the biggest tech buyouts on record, our US team report. The deal would cap a years-long tussle with activist Elliott, which began agitating for change after investing in 2015, and mark the first $10bn-plus buyout of the year following a slump for public tech stocks.
China tech stocks recovered some of the losses made in two days of heavy selling, in an abridged session ahead of the lunar new year. The Hang Seng Tech index closed 2.4 per cent higher led by food delivery platform Meituan and ecommerce group JD.com, after the index posted losses in all but one trading session last week.
Shares in casino company Macau Legend fell as much as 30 per cent, however, after the company revealed its chief executive and controlling shareholder had been detained by the City’s police. The company is the latest to be caught up in Chinese authorities’ crackdown against Macau’s dominant gambling sector and comes despite signals last week that the crackdown may be starting to ease, William Langley reports.
Andrew Hill has a fascinating column this week on the paradox that leads professionals into temptation. He reports how high-minded managers may be more prone to bias because they think they know how to ignore gift-givers. A warning to all professionals out there.
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