Tuesday 27 September 2016

Brexit: Shares in Ryanair crash 10pc amid fall in British airline and property companies

Press Association

Published 27/06/2016 | 10:49

A decline in fuel costs, more airline capacity and more intense competition have prompted carriers to cut prices. Photo: PA
A decline in fuel costs, more airline capacity and more intense competition have prompted carriers to cut prices. Photo: PA
An easyJet flight. Photo: PA Wire/Press Association Images

Shares in Ryanair have crashed nearly 10pc in early trading after Easyjet warned that air traffic control strikes have hurt its business and that Brexit will damage it further.

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Ireland’s ISEQ is the second-worst performing European stock market this morning, falling 4.8pc, as analysts reappraised their outlook for some of the country’s biggest companies. Only Sweden’s has fared worse. Bank of Ireland has slumped 14pc.  CRH is down 4.5pc, Smurfit Kappa is 4.3pc lower.

EasyJet shares fell 19% after the firm said it will take a £28 million hit following two months of turbulence and warned that Brexit would have a negative impact on the airline.

Share fell from 1313p to 1061p as it flagged strikes in France in May and June and severe weather and congestion issues at Gatwick leading to more than a thousand cancellations, with the EgyptAir tragedy also denting demand.

The budget airline said: "The operating environment for all European airlines in May and June has been extremely challenging.

"These incidents, together with the EgyptAir tragedy, resulted in some drop off in consumer demand leading to lower yield and have impacted third quarter profit before tax by approximately £28 million and have had a negative impact on third quarter revenue per seat."

On Brexit, easyJet said that it anticipates economic and consumer uncertainty this summer and, as a result, revenue in the second half will be down by "at least a mid-single digit percentage".

Separately, shares in Foxtons have crashed 24% after the estate agent issued a Brexit profit warning on Monday.

The company's stock fell from 135p to 103p in morning trading as the London-focused firm said that the upturn it had expected in the second half of the year is "now unlikely to materialise", adding that annual earnings will be "significantly lower" than in 2015.

Chief executive Nic Budden said: "Whilst we had a strong start to the year, we said in our first quarter update that we expected the first half to be challenging ahead of the EU referendum.

"Since then recent sales volumes have been slow as uncertainty and higher stamp duty has led many buyers and sellers to sit on their hands. The result of the referendum has increased uncertainty and is likely to mean that these trends continue for at least the remainder of the year."

However, in the longer term Mr Budden said that Foxtons remains confident of the "attractiveness of London property sales markets" and its strategy to focus on the outer London mid-market segment.

 

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