International Airlines Group (IAG), ITV (ITV), Rightmove (RMV), house prices, Greencore (GNC) and Bakkavor (BAKK)
International Airlines Group (IAG) reported third-quarter earnings that were slightly below analysts’ expectations.
The parent group of British Airways, Iberia and Aer Lingus reported flat revenue of €9.3bn for the quarter, and a 2 per cent increase in adjusted operating profit to €2bn. Reported net profit fell by 2 per cent to €1.4bn.
The main cause was the North American market, where revenue per available seat kilometre fell by 7 per cent – in part due to capacity additions.
Although full-year guidance was left unchanged, the company’s shares fell by 7 per cent. They are still up by about 30 per cent since the start of the year, though. MF
ITV (ITV) has confirmed it is in early stage talks with Sky to sell its media and entertainment business in a deal worth £1.6bn.
The media and entertainment business consists of ITV’s free-to-air TV channels and its streaming service, ITVX. It does not include the ITV Studios business, which has been the subject of previous takeover discussions. It makes programmes such as Love Island and Britain’s Got Talent, which air on its broadcasting channels, but it also sells to streaming platforms.
Yesterday, ITV reported that its studios arm remained on track to hit full-year targets after growing third-quarter revenue by 11 per cent to £1.35bn. Revenue in the media and entertainment business fell by 5 per cent, though, with chief executive Carolyn McCall blaming uncertainty around the forthcoming budget for a slowing of advertising spend.
ITV’s shares rose by 15 per cent on news of the potential sale to 78p a share, pushing up its market capitalisation to £2.9bn.
Analysts at UBS had valued the media and entertainment arm at £1.5bn. If it was sold at that price and all of the proceeds used to buy back shares, it would mean earnings per share would increase by more than 20 per cent to 10p, valuing the remaining studios arm at just seven times earnings. MF
Shares in Rightmove (RMV) fell 20 per cent in early trading after the company in effect downgraded its medium-term guidance due to plans to invest heavily.
Rightmove will invest an incremental £18mn in technology and AI next year to enhance both the interface (front end) and the underlying infrastructure (back end) of its app, as well as to bring more of the homebuying process online. Two-thirds of this investment will go through the P&L, with the remainder capitalised.
As a result of the additional expense, Rightmove’s 2026 guidance is below consensus expectations and implies a 4-6 per cent downgrade to consensus operating profit. The company’s medium-term ambition (a softer term than target) is for annual EPS growth of 5-12 per cent, a broad range well below market expectations of 15 per cent.
“We are investing to accelerate our capabilities, which we are confident will create an even stronger platform and higher growth business
The average UK house price rose 0.6 per cent during October, according to Halifax, in what is the largest monthly increase since January. The average house price of £299,682, 1.9 per cent higher than in October 2024.
“Demand from buyers has held up well coming into autumn, despite a degree of uncertainty in the market,” said Amandan Bryden, head of mortgages at Halifax. “The market has proven resilient over recent months, as many buyers opt for smaller deposits and longer terms to help make the numbers work.”
Bryden also expects affordability, a key constraint in the market at the moment, to continue to improve as wage growth outstrips house price growth. HM
The UK Competition and Markets Authority (CMA) announced this morning that it plans to accept proposals put forward by Greencore (GNC), to address competition concerns flagged in stage one of the regulator’s consumer fairness probe.
The food manufacturer’s proposed acquisition of rival Bakkavor (BAKK) hit a speed bump last week when the CMA investigation found that a tie-up could lead to higher prices for consumers and lower product quality in the supply of own-label chilled sauces.
The takeover, first announced in May, would create a supergroup supplier for many of the UK’s largest supermarkets. In response, Greencore has offered to sell its only chilled sauce manufacturing plant in Bristol.
The transaction remains on track to complete in early 2026, subject to final approvals from the CMA. Greencore shares stayed flat in early trading. EW
