Airlines bumped back to earth after recent gains as minnow Jet2 warned of rising costs even as it signalled higher profit for the year. The airline and package holidays operator said announcements in Chancellor Rachel Reeves’s Budget, including an increase to the minimum wage and national insurance rises, would add £25million to its costs.
In addition, a government mandated increase in sustainable aviation fuel to make up 2 per cent of loads was set to cost it a further £20million. Other cost pressures highlighted by the company included higher aircraft maintenance and general airport charges, plus increases in hotel prices.
Jet2 said it still expects its full-year profit to rise by between 8 per cent and 10 per cent to £560million to £570million. But that didn’t stop the AIM-listed firm’s shares plunging 10.7 per cent, or 167p, to 1398p. Costs crunch: Jet2 said announcements in Chancellor Rachel Reeves’s Budget, including an increase to the minimum wage and national insurance rises, would add £25m to its costs.
Elsewhere in the airlines sector, FTSE 100-listed British Airways owner IAG shed 3 per cent, or 10.1p, to 326.7p, Easyjet lost 3.9 per cent, or 20.3p, to 497.3p and FTSE 250-listed Wizz Air fell 4.6 per cent, or 75p, to 1550p. Holidays small cap On the Beach dropped 6.4 per cent, or 16p, to 236p as Jet2 also cautioned that holidaymakers continue to book later than in the past.
With UK inflation showing a jump last month, the FTSE 100 closed down 0.62 per cent, or 54.2 points, at 8712.53, and the FTSE 250 ended off 0.83 per cent, or 173.77 points, at 20,707.79. Housebuilders came under pressure as investors worried that the inflation rise could persuade the Bank of England to slow down interest rate cuts.
Barratt Redrow slid 3.1 per cent, or 13.4p, to close the day at 426p, Persimmon fell 1.2 per cent, or 15p, to 1214p and Taylor Wimpey slipped 1.4 per cent, or 1.55p, at 113.45pp. But Antofagasta proved to be a FTSE 100 gainer. The Chilean copper miner added 0.8 per cent, or 15.5p, to 1850.5p after a double upgrade to ‘overweight’ by analysts at investment bank JP Morgan Chase, who cited a positive long-term copper outlook.
However, broker comment weighed on some mid-caps. Trainline slumped 7.8 per cent, or 26.8p, to 319.2p as analysts at JP Morgan cut their rating for the rail ticketing platform to ‘neutral’ from ‘overweight’. Meanwhile, under-pressure oil services firm John Wood fell 16.6 per cent, or 4.84p, to 24.26p as analysts at financial services group Kepler Cheuvreux downgraded their stance to ‘reduce’.
Food ingredients company Tate & Lyle dropped 1.8 per cent, or 10p, to 543.5p as analysts at Berenberg reduced their stance to ‘hold’ from ‘buy’. Also on the second line, Conduit lost 7.1 per cent, or 31p, to 406p as the firm, which is the parent of Conduit Re reinsurance business, reported a decline in annual profit and warned of a big hit from the wildfires in California.
Among the small caps, legal group Keystone Law, which added 3.9 per cent, or 20p, to 535p said its full-year revenue and adjusted pre-tax profit were set to be slightly ahead of current market expectations following continued solid trading in the second half.
Tracsis soared as it secured a major contract to provide the core technology behind pay-as-you-go rail travel across the country. The AIM-listed tech firm will deliver the Tap Converter system which will handle fare calculations and transaction processing for National Rail.
Tracsis already supplies smart ticketing technology to six train operating companies. More operators will now adopt the company’s system. Shares rose 19.4 per cent, or 70p, to 430p. Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.
