Ryanair Down amid Dispute with Pilots

Electronics maker Thomson down on acquisition; plus more of Wednesday's European stocks in the news

From Standard & Poor's European MarketScope


Low-cost airline Ryanair was down £0.13 to £5.92, after The Guardian newspaper reported that pilots' leaders have accused the company of an extraordinary attack on free speech in a high court battle over a website that contains anonymous criticisms of the airline by some of its employees. The Irish carrier is trying to unmask the identity of pilots responsible for controversial remarks about its working practices on a message board run jointly by the British and Irish pilots' unions. The company has drawn first blood by securing an injunction from a Dublin judge that bans the unions from destroying the codenames used by pilots on the company's European Pilots' Association's website.

Pub group Enterprise Inns was up £0.22 to £7.68 after the company said that both first half pre-tax profit and operating profit should be in line with expectations and that the business has performed well since the annual general meeting in January. The group added that the integration of the Unique Pub Chain has now been completed and the company expects synergies of £27 million per year to be realised during the current financial year.

Intercontinental Hotels was down £0.9 to £6.17, after the Independent newspaper reported that its former chief executive, Richard North, earned £1.2 million for 2004 despite being ousted because he "didn't have the right skills for the job." North could still earn a further £3.8 million from a long-term share scheme, according to the report. Although North left the group in December, he was awarded shares worth up to £3.8 million as part of a rolling three-year incentive scheme covering the period 2004 to 2006. He will be allowed access to the shares if shareholder returns from the company reach certain performance targets over the period. The company also trades ex-dividend today.

The Wireless Group was up £0.03 to £0.85, after the company announced fiscal year 2004 adjusted operating profit of £4.3 million, up 53.6% year on year, on sales that were up 22% to £39.7 million. The company said like-for-like turnover rose 11.5% to £36.3 million. On a statutory basis, the group said its operating loss was £9.4 million, down from £10.7m in 2003. The company added it has had a strong start to 2005 with group revenues up 9.9% in the first quarter, with its TalkSport radio station performing strongly. Additionally the company confirmed it is in discussions with a number of potential offerers which may or may not lead to an offer for the company. It added that the board is not currently in a position to provide any further information. Earlier, The Guardian newspaper reported that chairman and chief executive Kelvin MacKenzie has lined up the venture capital firm 3i as the new backer for his proposed £100 million management buyout of the company.


Consumer electronics maker Thomson was down €0.35 to €20.94, after the company announced it has aquired Inventel, a small French design house, specialising in telecoms. The bank Kepler noted that the price paid is approximately equivalent to 2005 sales, or €130 million to €135 million. Around €65 million will be paid in cash while the remainder will be paid in stock. The broker said the company sees a neutral impact of Inventel's acquisition in the second quarter and a positive impact going forward. The broker also noted that Inventel generates double-digit margins compared to 5.3% in the systems and equipment division. It sticks to a buy rating and €23 target price.

Mailroom equipment maker Neopost was up €2.25 to €68.00, after Deutsche Bank said the company reported excellent fiscal year 2004 results. The broker pointed out that the company is normally very conservative in its outlook statements. Neopost reported 2004 net profit of €108.6 million, up 30.3%, including a bond conversion. Excluding the bond conversion, net profit was €101.1 million, up 21.1%. The company raised its dividend by 20% to €1.50 and will pay a special dividend of €2.00. The company said it was confident about 2005 and forecast like for like sales growth of 5% and earnings before interest and taxes margin of 24%, irrespective of the U.S. dollar fluctuations.

Oil services company Technip was up €2.70 to €127.90, after it landed a contract to build a gas plant in Saudi Arabia. Saudi Aramco awarded a contract to the consortium of Technip and Bechtel for a grass-root gas plant as part of the Khursaniyah, Fadhli and Abu Hadiyah hydrocarbon field development program. The goal of the program is to substantially increase oil and gas production in Saudi Arabia.


Puma was up €6.79 to €194.10, after the sporting goods maker reiterated its forecast of sales increases in 2005 of between 5% and 9%. The company is expecting US sales to rise at least 10% this year, and sees European sales rising at a slower rate. The company also expects weaker 2005 gross profit margin at 50% to 52% compared to 51.9%. The company will not benefit from the change in goodwill accruals following the introduction of new International Financial Reporting Standards accounting standards, CEO Jochen Zeitz said. He added that the company's expense ratio will be between 30% and 31% this year with the tax ratio expected at 29% and 30%. He said on the whole he expects another record year.

Deutsche Boerse was down €0.95 to €58.15, after the Financial Times reported that rival exchange Euronext plans to start a new market to challenge London's AIM. The new exchange, to be called Alternext, will offer small companies access to capital markets with reduced listing requirements. The new market has been approved by the authorities and will open May 17.

Travel group TUI AG was down €0.50 to €20.40, after the Riu family reduced its indirect stake in the company to 5.1% after acquiring nearly 10% last year. Separately, Morgan Stanley reiterates its underweight rating but reduces its earnings before taxes and amortisation forecast by 6% to €533 million. The broker said that for the last three years the company has been consuming cash after its significant capital expenditures bill and has not been generating enough cash internally to finance its dividend.

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