logo-loader

Beaufort Securities Breakfast Alert: Prospex Oil & Gas and easyJet

Published: 08:37 21 Nov 2017 GMT

no_picture_pai

Markets


Europe
The FTSE-100 finished yesterday's session 0.12% higher at 7,389.46, whilst the FTSE AIM All-Share index was down 0.12% at 1,022.20. In continental Europe, the CAC-40 finished 0.40% higher at 5,340.45 whilst the DAX was up 0.50% at 13,058.66.
Wall Street
In New York last night, the Dow Jones closed 0.31% higher overnight at 23,430.33, the S&P 500 added 0.13% to end at 2,582.14 and the Nasdaq finished 0.12% firmer at 6,790.71.
Asia
In Asian markets this morning, the Nikkei 225 was recently up 0.7% at 22,416.48 and the Hang Seng was 1.1% higher at 29,582.28.
Oil
In early trade today, WTI crude was 0.05% higher at $56.45 per barrel, while Brent was up 0.13% at $62.3.

Headlines


EasyJet profits fall after 'difficult year' for aviation
EasyJet's profits have fallen during what the airline called a "difficult year for the aviation industry". Pre-tax profits in the year to 30 September fell 17.3% to £408m, in line with guidance given last month. Passenger numbers rose 9.7%. These are the last results overseen by chief executive Carolyn McCall, who is moving to become head of ITV. "EasyJet's model is resilient and sustainable and we now have a huge amount of positive momentum," she said. The headline profit figure would have been higher, but the airline was hit by "an adverse headline currency impact" of £101m. "We are hedged on currency, but the devaluation was quite significant on 24 June, 2016," Ms McCall told the BBC's Today programme, referring to the fallout from the Brexit referendum vote. "We started the year knowing exactly that, there was no surprise there for the market." She said that the airline was in a healthy state, despite the industry having had "a couple of years where it was a very tough market". In October, EasyJet announced an agreement to acquire part of Air Berlin's operations at Berlin Tegel airport for €40m (£35m). The deal is expected be completed in December, and will result in the airline entering into leases for up to 25 A320 aircraft, and offering employment to up to 1,000 former Air Berlin crews.
Source: BBC News

Company news

Prospex Oil & Gas (LON:lPXOG, 0.54p) – Speculative Buy
Prospex has announced that the Podere Maiar 1d well, onshore Italy, spudded early this morning. The well is targeting 17bcf of gas and will be drilled to 1350m, completing in 20-25 days. Assuming success, well testing will likely be in January. Prospex has a 17% working interest in this well, and the wider Podere Gallina permit in the Po Valley region.

Our view: Prospex only invested in Podere Gallina a few weeks ago so its good to see such quick progress. And with drilling underway at its 50% owned Bainet-1 well in Romania, Prospex currently has two drills turning, both onshore, both Europe and both gas. We have a Speculative Buy recommendation.

Beaufort Securities acts as corporate broker to Prospex Oil & Gas plc
REQUEST A CALL FROM A BROKER REGARDING THIS RECOMMENDATION
easyJet (LON:EZJ, 1,278.00p) – Buy
easyJet this morning announced its final results for the year ended 30 September 2017 ('FY17'). During the period, revenue advanced by +8.1% to £5,047m driven by +9.7% growth in passenger number to 80.2m, with revenue per seat maintained flat -0.4% to £58.23 (-4.5% at constant currency), against prior year (FY16). Load factor during the year was 92.6% (FY16: 91.6%). Due to increase in headline cost per seat by +2.4% to £53.52, driven by unfavourable FX movement, PBT fell by -17.3% to £408m, leading to EPS of 82.5p, down -23.9%. Net cash at the period end stood at £357m (FY16: £213m). On the operational front, the Group obtained European Air Operator's Certificate ('AOC'), securing flying rights in Europe post the Brexit. Capacity increased by +8.5% during the period and on 27 October 2017, signed an agreement with Air Berlin to acquire part of its operations for a consideration of €40m which is expected to close in December 2017. On 10 November 2017, easyJet appointed Johan Lundgren (ex-Deputy CEO of TUI) to succeed departing CEO, Carolyn McCall from 1 December 2017. easyJet's CEO, Carolyn McCall commented "easyJet's model is resilient and sustainable and we now have a huge amount of positive momentum which will enable the airline to continue to grow profitably". The Group declared full year dividend of 40.9p (FY16: 53.8p) to be paid on 23 March 2018.

Our view: easyJet's full year results were in line with guidance and consensus estimates. Post period, the Group said Q1 forward bookings are ahead of last year at 88% and 26% for the Q2. Looking ahead, excluding impact of Air Berlin, easyJet plans to grow capacity by around 6% for the FY18. Total headline cost per seat is expected to decrease by around -2% (excluding fuel at constant currency +1%). Due to reduction in market capacity, Q1 revenue per seat growth at constant currency is expected to be positive by low to mid-single digits, while for the H1, it is also currently expected to be positive by low to mid-single digits due to timing of Easter. The shares are currently traded at FY18 P/E multiple of 13.3x with dividend yield of 3.7%. Outlook for Airlines remain volatile and uncertain, but the Group started the year with positive momentum and confidence. Considering easyJet's balanced growth prospect and dividend profile, Beaufort maintains its Buy recommendation with a target price of 1,460p.

Oriole Resources outlines 2023 achievements and future exploration plans

Oriole Resources PLC (AIM:ORR) CEO Tim Livesey and chief financial officer Bob Smeeton join Proactive's Stephen Gunnion with details of the company's 2023 financial and operational performance. Livesey highlighted successful exploration programs in Cameroon, at the Bibemi and Mbe projects,...

1 hour, 51 minutes ago