The Week Ahead: EasyJet set to remain in the red as fuel bill bites

Airlines may have enjoyed a rally last week as the price of oil slipped, but that is unlikely to prevent the issue of fuel costs being a major focus of easyJet's half-year results tomorrow.

Noting that the budget carrier's "sensitivity is roughly such that a $10 move in fuel equates roughly £3m of cost", Wyn Ellis, of Numis Securities, believes the airline will report a pre-tax loss towards the higher end of the guidance of between £140m and £160m it gave at its update in January, despite the recent weakness of the dollar providing some relief.

Last week, eayJet trumpeted an impressive 35.1 per cent growth in passenger numbers in April. Nomura's Andrew Evans forecasts a fall in total revenue per seat of 2.3 per cent, "a result of weaker second-quarter pricing (a function of higher capacity growth in the second quarter and a drop-off in bookings during the poor weather) and lower ancillary revenues from bag charges".

Meanwhile, Mr Ellis says that in terms of easyJet's comments about the future, the market will "be especially sensitive ... with regard to bookings for the key summer months". EasyJet's rival FlyBe issued a profits warning last week, citing a slowdown in leisure passengers. Mr Ellis remains cautious, noting that "the consumer remains under pressure, particularly in the UK, and we believe that easyJet will be finding it difficult to recoup rising fuel costs via higher yields".



Today

Outsourcing will be in focus this morning, with Serco posting an update in the wake of recent reports of growing government caution over using the private sector to provide public services. The group announces its interim management statement today, and Espirito Santo believes its contract wins should be similar to the £1bn it saw in the same period a year before.

Thomas Cook is also reporting today, and JPMorgan Cazenove says the tour operator's operating loss for the first six months will accelerate by £40m to £170m, with a hit of roughly £20m from the recent unrest in Tunisia and Egypt and the same amount from Easter coming late in the year.

Results/Updates: Centrica, Hiscox, HSBC, Inmarsat, Lonmin, Serco, Telecity, Thomas Cook and Travis Perkins.



Tomorrow

Following on from Serco, fellow outsourcer Capita will update the market tomorrow, with Espirito Santo expecting it to match last year's performance. Analyst David Brockton notes that "greater acquisition spend has already been a notable feature of the period, with six businesses acquired to date through 2011 collectively worth at least £83m", but adds that "organic growth will be the key determinant for any sustainable re-rating".

In a similar vein, TUI Travel will follow in the footsteps of Thomas Cook with an update tomorrow, and despite facing the same issues, JPMorgan Cazenove believes losses over the first half will have improved by £2m to £312m, helped by "good trading (excluding UK and France) and positive foreign exchange movements".

Results/Updates: Balfour Beatty, BG Group, Capita, CSR, easyJet, G4S, Imperial Tobacco, InterContinental Hotels, Morgan Crucible, N Brown, National Express and Tui Travel.



Wednesday

Restaurant Group is expected to strike an upbeat tone when it posts an update alongside its annual meeting. Citigroup predicts that the company will end up seeing like-for-like sales growth of 2.5 per cent over the full year, which should cancel out cost inflation to keep its margins steady.

A year-end trading update from the Comet owner Kesa Electricals is also due out on Wednesday. Although Britain's economic outlook may be gloomy, Royal Bank of Scotland points out that about 70 per cent of the group's sales are overseas. The broker says data from France, Kesa's core market where it owns the Darty chain, shows an average rise of 5.2 per cent each month in consumer electrical sales over the first quarter Like-for-like sales in France are likely to have grown by 1 per cent over the year.

However, its analysts believe Kesa's UK losses will have grown to €10.7m, noting that "the market's focus has been on Comet's poor performance and whether the brand has a future in the UK market".

Results/Updates: Bovis Homes, Barratt Developments, Drax, FirstGroup, Greggs, International Personal Finance, J Sainsbury, Kesa Electricals, Prudential, Rathbones, Restaurant Group and Wood Group.



Thursday

Results/Updates: 3i, Aegis, Amlin, BT, Cookson, ENRC, Informa, Old Mutual, Pace, RSA, Supergroup, Tullett Prebon, Tullow Oil and Yule Catto.



Friday

Results/Updates: Catlin, Dignity, LSE, Petrofac and Spectris.

Economics Diary

Today

EU Sentix investor confidence index.



Tomorrow

BRC retail sales monitor; RICS house price balance; US import price index.



Wednesday

Bank of England inflation report; Trade balance; US budget statement; US oil inventories; US trade balance.

Thursday

EU industrial production; European Central Bank monthly bulletin; Industrial production; Manufacturing output; NEISR GDP estimate; US business inventories; US PPI; US retail sales; US unemployment data.



Friday

US CPI; US University of Michigan consumer sentiment.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Telesales Executive - OTE £25,000

£13000 - £25000 per annum: Recruitment Genius: Would you like to be part of a ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Are you passionate about sale...

Ashdown Group: Graduate Developer (Trainee) - City, London

£25000 per annum + benefits: Ashdown Group: A large financial services company...

Ashdown Group: Marketing Assistant - Financial Services Sector - London

£20400 per annum: Ashdown Group: An established and highly reputable organisat...

Day In a Page

The Silk Roads that trace civilisation: Long before the West rose to power, Asian pathways were connecting peoples and places

The Silk Roads that trace civilisation

Long before the West rose to power, Asian pathways were connecting peoples and places
House of Lords: Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled

The honours that shame Britain

Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled
When it comes to street harassment, we need to talk about race

'When it comes to street harassment, we need to talk about race'

Why are black men living the stereotypes and why are we letting them get away with it?
International Tap Festival: Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic

International Tap Festival comes to the UK

Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic
War with Isis: Is Turkey's buffer zone in Syria a matter of self-defence – or just anti-Kurd?

Turkey's buffer zone in Syria: self-defence – or just anti-Kurd?

Ankara accused of exacerbating racial division by allowing Turkmen minority to cross the border
Doris Lessing: Acclaimed novelist was kept under MI5 observation for 18 years, newly released papers show

'A subversive brothel keeper and Communist'

Acclaimed novelist Doris Lessing was kept under MI5 observation for 18 years, newly released papers show
Big Blue Live: BBC's Springwatch offshoot swaps back gardens for California's Monterey Bay

BBC heads to the Californian coast

The Big Blue Live crew is preparing for the first of three episodes on Sunday night, filming from boats, planes and an aquarium studio
Austin Bidwell: The Victorian fraudster who shook the Bank of England with the most daring forgery the world had known

Victorian fraudster who shook the Bank of England

Conman Austin Bidwell. was a heartless cad who carried out the most daring forgery the world had known
Car hacking scandal: Security designed to stop thieves hot-wiring almost every modern motor has been cracked

Car hacking scandal

Security designed to stop thieves hot-wiring almost every modern motor has been cracked
10 best placemats

Take your seat: 10 best placemats

Protect your table and dine in style with a bold new accessory
Ashes 2015: Alastair Cook not the only one to be caught in The Oval mindwarp

Cook not the only one to be caught in The Oval mindwarp

Aussie skipper Michael Clarke was lured into believing that what we witnessed at Edgbaston and Trent Bridge would continue in London, says Kevin Garside
Can Rafael Benitez get the best out of Gareth Bale at Real Madrid?

Can Benitez get the best out of Bale?

Back at the club he watched as a boy, the pressure is on Benitez to find a winning blend from Real's multiple talents. As La Liga begins, Pete Jenson asks if it will be enough to stop Barcelona
Athletics World Championships 2015: Beijing witnesses new stage in the Jessica Ennis-Hill and Katarina Johnson-Thompson heptathlon rivalry

Beijing witnesses new stage in the Jess and Kat rivalry

The last time the two British heptathletes competed, Ennis-Hill was on the way to Olympic gold and Johnson-Thompson was just a promising teenager. But a lot has happened in the following three years
Jeremy Corbyn: Joining a shrewd operator desperate for power as he visits the North East

Jeremy Corbyn interview: A shrewd operator desperate for power

His radical anti-austerity agenda has caught the imagination of the left and politically disaffected and set a staid Labour leadership election alight
Isis executes Palmyra antiquities chief: Defender of ancient city's past was killed for protecting its future

Isis executes Palmyra antiquities chief

Robert Fisk on the defender of the ancient city's past who was killed for protecting its future