Trending tickers: BT | Burberry | EasyJet | National Grid
The latest investor updates on stocks that are trending on Thursday
Burberry (BRBY.L)
Burberry sales were given a boost as shoppers in China were ready to splurge again after the end of pandemic restrictions.
The British fashion company increased comparable store sales by 7% in the year ending April 1, while adjusted operating profit rose to £634m. Both were better than analysts had expected.
“The return of the tourist and the economic reopening in China have provided a twin boost to Burberry’s reviving fortunes,” Richard Hunter, head of markets at Interactive Investor, said.
In the quarter to April 1, comparable store sales rose 16%, accelerating from 1% in the third quarter and above a company compiled consensus of 14%. Sales in Mainland China rose 13%
Adjusted operating profit grew by 21% to £624m in the year to 1 April 2023, while revenues jumped to £3.09bn from £2.8bn.
"We have delivered a strong financial performance, supported by good progress in our core leather goods and outerwear categories, with revenue accelerating in the fourth quarter as growth rebounded in Mainland China," chief executive Jonathan Akeroyd said in a statement.
BT (BT-A.L)
BT is to slash up to 42% of its workforce by the end of the decade as the UK telecoms group embarks on a radical cost cutting drive.
The FTSE 100 group said on Thursday that it would cut between 40,000 and 55,000 jobs, including employees and third-party contractors, by 2030.
The headcount reduction, which will be up to 40% of employees, is out of a current workforce of 130,000.
Chief executive Philip Jansen said that by the end of the 2020s BT will have a "much smaller workforce" and a "significantly reduced cost base".
Around 10,000 roles will also be replaced by automation thanks to artificial intelligence, Jansen added.
The BT announcement was made as it reported a 12% drop in profits of £1.7bn for the year to April.
“BT has seen Vodafone’s job losses and taken them to another level, with up to 55,000 expected to be cut from the workforce by the end of the decade as the business seeks to cut costs,” Matthew Dorset, equity research analyst at Quilter Cheviot, said.
Vodafone said it would axe a tenth of its staff over the next three years, equating to 11,000 jobs.
Read more: FTSE 100 higher but BT plunges as it plans to cut up to 55,000 jobs
“The business has faced pressure from alternative network providers, although on the retail side customer numbers have remained stable. On the Openreach side of the business BT had a net loss of 68,000 connections, a reversal of a recent trend of slowing losses. This will be a concern and a figure to watch going forward,” Dorset added.
Many of BT’s planned job cuts will fall on its UK workforce.
Victoria Scholar, head of investment at Interactive Investor, said: “BT is planning to cut 55,000 jobs by 2030 as it looks to slim down its operations and reduce its cost base. ‘A big chunk of job cuts will be in the UK’, said BT’s CEO Philip Jansen. It is targeting £3bn in cost savings by 2025.
“Full-year core earnings rose by 5% to £7.9bn, in line with analysts’ expectations but BT reported disappointing free cashflow down 5% to £1.3bn and pre-tax profits slumped 12% to £1.7bn.”
EasyJet (EZJ.L)
EasyJet has slashed first-half net losses on strengthening demand from holidaymakers and despite jumping costs.
The average EasyJet ticket price was 31% higher between January and March compared with the same period last year
The group faced a loss after taxation of £307m in the six months to the end of March, down 28% from a loss of £431m a year earlier, it revealed in its annual results.
Chief executive Johan Lundgren said: "EasyJet's optimised network combined with the strong demand seen for flights and holidays, enhanced revenue capabilities and operational resilience means we enter the summer with confidence.
"Recent research has shown that travel is the number one priority for household discretionary spend, with customers safeguarding their holidays and increasingly opting for low-cost airlines and brands which provide great value."
It carried 33.1 million passengers over the six months between October and March, a 41% increase on the 23.4m a year earlier.
Read more: Bank of England ready to raise interest rates again warns Andrew Bailey
Chris Beauchamp, chief market analyst at IG Group, says the update hasn’t provided the magic to drive easyJet’s shares higher.
“The tone is upbeat, but now investors will want to see the airline delivering on these rosy assumptions. Given still-high inflation, some scepticism probably isn’t entirely unwarranted.”
National Grid (NG.L)
National Grid posted a strong full-year profit as its business grew in the UK and the US.
The FTSE 100 monopoly said its underlying operating profits climbed by 15% to £4.58bn for the financial year ending in March compared with the 12 months before.
This was driven by a surge in profits from its electricity distribution business which climbed by 39% from the previous year to £1.2bn for the year to the end of March.
“National Grid has once again underlined the quality of its business and importance to the national infrastructure and security of the UK, with profits hitting more than £3.5bn. The FTSE 100 company, however, wants to be at the heart of the energy transition, and thus has invested a record £7.7bn in the year to act as that enabler. For some this isn’t enough amid delays to the connection of renewable projects, and is something to watch going forward as the energy transition takes shape,” Tom Gilbey, equity research analyst at Quilter Cheviot, said.
“Even with energy prices beginning to somewhat normalise, National Grid is a crucial part of the country’s infrastructure, and as such has numerous growth drivers to help sustain its recent growth performance,” he added.
The power network reported adjusted earnings per share of 69.7 pence, just beating the 69.5 pence estimate of analysts.
National Grid's American arm runs pipelines in the northeast US in which it is preparing to use greener fuels.
The National Grid chief executive, John Pettigrew, said: “There has never been a more exciting time to be at the heart of the energy industry”.
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