🛫 Ryanair is back

PLUS: UK house prices continued to rebound, Natwest bought back £1.3bn in shares from the UK government and EQT veterinary target Dechra sunk 13% after announcing a profit warning.

May 23, 2023

Good morning. In today’s update - Ryanair swung to a profit and hailed a near-return to pre-pandemic customer numbers, UK house prices continued to rebound, Natwest bought back £1.3bn in shares from the UK government and EQT veterinary target Dechra sunk 13% after announcing a profit warning.

Markets

  • Mixed day for UK equities as the FTSE 100 closed 0.2% higher, whilst the FTSE 250 (-0.1%) finished marginally off the boil.

  • Banks overall had a strong day after Standard Chartered (+3%) was upgraded by analysts and Natwest (+1.2%) benefitted from the announcement that it was buying back a stake from the government.

  • Airlines also provided support to markets after a positive Ryanair (+1.3%) update (below), with British Airways owner IAG closing +0.9% higher.

Corporate News

Ryanair shares were in the green after it announced a return to profit for the year to March, driven by a surge in demand and an increase in prices; adjusted profit after tax hit €1.43bn (vs market forecasts of between €1.32bn - €1.42bn), whilst passenger numbers were 13% higher than pre-pandemic levels. (Link, Ryanair)

Dechra Pharmaceuticals - the veterinary product maker subject to a potential bid from Swedish private equity firm EQT - delivered a downbeat update to markets on Monday as it said that “destocking” in the US would hit profits this year - shares slumped 13% after the announcement. Under the current timetable, EQT has until 2 June to announce a firm bid for the company. (Link, Dechra)

Investment platform Hargreaves Lansdowne hit out at asset manager Lindsell Train’s risk management framework, claiming it does’t feel the controls in place are “sufficiently robust” or that the firm has the “capabilities” to provide oversight of its investment teams; Lindsell Train manages around £19bn in assets. (Link)

Belfast-based software company Kainos saw shares jump 6.1% after reporting a 24% increase in revenue (to £375m) for the year to March, buoyed by a continued global expansion; 52% of sales are now generated internationally compared to less than 30% last year. (Link, Kainos)

Just days after Wise CEO Kristo Kaarman announced he would be taking an extended period of leave to spend time with his child, CFO Matt Briers announced he would be stepping down in 2024 to continue his recovery from a bike accident last year. (Link)

Deals

Natwest shares rose 1.2% on Monday after the UK government sold off a £1.3bn chunk of shares back to the lender, taking its ownership below 40%; the plan is to fully privatise the bank by 2026. (Link)

William Hill parent 888 announced it would sell its “non-core” Latvian unit for £25m to Paf Consulting - a company owned by the government of Finnish region the Åland Islands. (Link)

Mike Ashley’s Frasers Group is on the verge of acquiring the inventory and IP of cycling goods retailer ProBikeKit from THG, as the eCommerce group continues to exit non-core markets. (Link)

Today’s VC round up:

  • UNDO - a London-based climate tech startup using volcanic rock dust to help remove carbon in soil - raised £9.6m in funding led by Lowercarbon Capital and AENU. Payment processor Stripe also invested £800k as part of its carbon reduction push. (Link)

  • PharmEnable - a Cambridge-based AI drug discovery startup - raised a £6m pre-Series A round led by Mitsubishi. (Link)

Economy / General

UK house prices continue to defy predictions of a big downturn, as Rightmove’s monthly data showed another jump in prices; the average price of properties coming to market increased 1.8% in May (higher than the average May rise of 1%), whilst agreed sales were just 3% behind pre-pandemic levels. (Link, Rightmove)

Following failed negotiations with ministers, junior doctors in the UK are set to stage another three day strike in June; the gap between the two sides is significant - doctors are asking for a 35% pay rise, whilst the government has only offered a 5% increase so far. (Link)

🌎 Global Snapshot

Japanese bank Mizuho has agreed a deal to acquire boutique investment bank Greenhill for $550m, in a bid to expand its advisory capabilities in the US; Mizuho’s offer of $15 per share is more than a 100% premium to Greenhill’s price pre-announcement. (Link)

Troubled regional lender PacWest’s share rose 15% on Monday after it announced it had agreed a deal to sell a $2.6bn real estate loan book to property firm Kennedy-Wilson, at a $200m discount. (Link)

Video conferencing platform Zoom raised its revenue forecast for next year as it reported an uptick in sizeable customers (those spending over $100k a year), along with a reduction in churn. Shares were up 1.7% in after hours trading. (Link (BBG), Zoom)

Facebook parent Meta was hit with a record €1.2bn fine for failing to ensure the relevant safeguards were in place for data transfers between the EU and US. (Link)

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