British Airways Lower as Fuel Costs Soar
From Standard & Poor's European MarketScope
British Airways shares fell 0.17% Thursday after the carrier said it will increase the fuel surcharge on its long-haul flights from Monday as a result of further rises in the price of fuel. The airline says the long-haul fuel surcharge on tickets sold and issued in the UK will increase to £30 per sector from £24 per sector (£60 return trip). It adds that the short-haul fuel surcharge will remain unchanged at £8 per sector (£16 a return trip). BA says its fuel bill of around £1.6 billion is now its second largest cost after employee costs. It now costs almost 400% more than it did in December, 2001, to fill up a plane.
Hotel group Intercontinental gained 0.75% after reporting in-line interim operating profit. Hotel operating profit was £153 million, up 33%; hotels managed and franchised operating profit was £134 million, up 16%; group operating profit was £192 million, up 26%; adjusted EPS were 18.1p, up 27%. RevPAR was up 8.1% across hotels, with the strongest trading in Americas, UK and Asia Pacific. The company announced a further £250 million share buyback, and says it is in an excellent position in a strong hotels market.
Shares of furniture group MFI fell 6.08% after Seymour Pierce cut its fiscal 2005 pretax profit estimate to £40 million from £57.50 million and for fiscal 2006 to £65 million from £82.5 million. The broker argues the shares are a sell down to £0.90.
Rentokil shares were 1.73% higher. Raphoe Management, the investment vehicle of Sir Gerry Robinson, says it will announce further information in respect of its proposals today. Raphoe will provide more details regarding a possible bid approach.
Cap Gemini climbed 1.9% after announcing firs-half attributable net income of €58 million; operating margin of 1.8%; operating income of €123 million; net cash at €498 million; and revenue at €3.472 billion. The consultancy expects revenue growth for fiscal 2005 of 12% at constant rates and area of consolidation, and an operating margin above its initial target set at 2.6%.
Lafarge dropped over 7% after posting weak first-half results. The company warns that fiscal year results will be at the low end of its guidance range. The cement group reports first half sales on a like-for-like basis up 6%; current operating income of €837 million, down 7.3% or down 9.3% like-for-like; net income of €359 million, down 17.7%; EPS of €2.12.