Market Report: FlyBe falls to earth with profit warning

With London this weekend bidding farewell to thousands of athletes, one company happy to see them go will be FlyBe. Punters were pushing over each other to reach the emergency exit yesterday after the regional airline said the Olympics were partly to blame for its latest woeful update.

Since floating in 2010 at 295p-a-pop, the group has shed more than three quarters of its value following a number of profit warnings. Yesterday it was nose-dived again, plummeting 10.75p to 64.5p on the small-cap index after admitting its revenues for the year would be worse than previously thought.

There was no shortage of reasons given by bosses for the change in forecasts, including what it called "distortions" from the Olympics and the Diamond Jubilee as well as the tough economic conditions in the UK and Europe, with business flights being particularly badly hit.

The analysts at Investec responded to the warning by slashing their price target by more than 10 per cent to 68p. They did keep their "hold" recommendation, but added that: "Active managers will see little reason to own the shares in the near term."

Meanwhile, Liberum Capital's Peter Hyde - saying the update highlighted "weakening UK demand" - said he "would be taking profit" in FlyBe's rival easyJet, which slipped back 1.5 points to 555.5p.

The FTSE 100 narrowly failed to stretch its winning run to a sixth session, creeping down 4.4 points to 5,847.11, as Chinese trade figures proved worse than expected. Nonetheless, the top-tier index has still added 220 points over the past fortnight.

The appointment late on Thursday of Sir David Walker as Barclays' new chairman was well received, as the bank closed in the gold medal position after advancing 4.45p to 183.4p. Shore Capital's Gary Greenwood was certainly impressed - the analyst said the City grandee "ticks all the right boxes", adding that he struggled "to see how the board could have found a better candidate for the role".

At the other end, Bunzl was knocked back 54p to 1,112.5p after UBS's Shang Liew recommended selling the plastic bag supplier, noting the stock had jumped by more than two-thirds over the past year.

Those waiting for Tui Travel to finally sort out its relationship with its parent company may not have long to wait. Speculation has constantly swirled that Germany's Tui AG could buy the 45 per cent of the tour operator it does not currently own, and yesterday Morgan Stanley's Jamie Rollo said he believed "a change [in the structure] appears increasingly likely over the next 12 months".

However, the analyst claimed instead of an acquisition of Tui Travel, a reverse takeover may in fact be easier, albeit still "difficult in the current environment". He pondered a number of other scenarios including Tui AG buying parts of Tui Travel while, in the wake of the latter's third-quarter results earlier in the week, Mr Rollo upgraded his recommendation on the stock to "equal-weight", helping it climb 1.4p to 198.5p.

A 20 per cent increase in the value of Hugo Boss over the first-half of the year prompted SVG Capital – whose biggest investment is the German fashion house – to tick up 4.3p to 264.8p, with the private equity firm's asset values up 12.3 per cent in total.

Meanwhile, the news it had paid €10m for a 22 per cent stake in PIXmania, giving it full control of the electricals website, saw high street chain Dixons Retail move 0.27p higher to 16.27p.

Down on Aim, Mercury Recycling was pegged back 0.25p to 5.5p after saying it had received a letter "from lawyers acting for two individuals claiming to represent a tribe in South Africa" who claim they have occupancy rights over land in the country which the street lamps recycler is trying to buy in a bid to diversify into iron ore mining. Non-executive director Giles Clarke called the missive "completely spurious" and said the board had been reassured by a law firm that it was "opportunistic and without any merit whatsoever".

Start your day with The Independent, sign up for daily news emails
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Engineer / Software Developer

£40-50K: Guru Careers: We are seeking an experienced Software Engineer / Softw...

Ashdown Group: Trainee Consultant - Surrey/ South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before