Gategroup Rises on Renewal of Long-Term Contract: Zurich Mover
Gategroup Holding AG (GATE), an airline caterer, gained the most in almost five months after extending contracts with a long-term client.
Gategroup rose as much as 6.3 percent, the biggest intraday gain since Oct. 17, and was up 4.4 percent to trade at 20.00 Swiss francs by 11:02 a.m. local time.
The company, based in Kloten outside Zurich, said this morning it signed two five-year deals with Spanish carrier Iberia Lineas Aereas de Espana SA and its newly formed subsidiary Iberia Express. The contracts, worth around 425 million francs ($450 million), will see Gategroup provide catering services at Madrid, Barcelona and other airports in Europe, the U.S. and Latin America, the company said in an e- mailed statement.
The renewal is “a positive step despite the slightly lower volume,” Rene Weber, an analyst at Vontobel Holding AG (VONN), wrote in a note to clients. The new contracts are worth 85 million francs a year, compared with 100 million francs a year previously, he said.
The decrease is partly due to currency effects, Weber said. The Swiss franc has soared against the euro since the start of debt crisis. The euro traded at 1.2358 francs at 10:40 a.m. today, compared with 1.6828 francs in October 2007.
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