Updates from RBS, IAG and Rentokil
Filed under: Investing
Asia today echoed the ECB disappointment, with the Nikkei giving away -1.1% while Hong Kong's Hang Seng fell -1%.
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Let's commence with RBS. Profits sank -22% in the last quarter as the European debt crisis unwound further while the bank says its overall half-year losses rise to £2bn compared to £1.4bn last year.
Operating profits slipped to £650m compared to £833m this time last year. RBS has had to put aside £310m for compensation payments to customers hit by the recent IT glitch (many where unable to access their bank accounts for several days) not to mention those mis-sold PPI.
Shares of the 82% taxpayer-owned bank slipped -5% yesterday to 204p. "We have," said RBS boss Stephen Hester, "continued to make the bank safer and stronger as we clean up problems of the past. And despite the tougher economy, these results show our ongoing businesses to be more resilient than before with many further improvements underway."
Next, IAG. The airline built around the merger of Iberia and BA has slashed full year profit hopes following rising fuel expenses and a grim performance from the Spanish side of the business. Though group revenues climb +9.8% to €8.53bn, the company swings to an operating loss of €253m for the first half of the year.
British Airways has made an operating profit of €13m but Iberia made an operating loss of €263m. Overall, passenger unit revenue for the half year climbed +8.9%. BA boss Willie Walsh says Iberia's problems are deep.
"We are currently working," he says, "on a restructuring plan for Iberia which we anticipate will be finalised by the end of September. This is likely to include short term downsizing, network reshaping to deliver higher unit revenues and a re-evaluation of all aspects of the business to deliver competitive costs and service to enable long-term profitable growth."
Lastly, interim numbers for rat catcher Rentokil. Second quarter profits climb +36.6% to £33.2m while pre-tax profits - at constant exchange rates - climb more than +52%. The company claims cost savings of £22.1m. Group revenues for the first half of the year climb +2.9%.
Organic growth has continued to progress year on year, says the company, despite challenging markets in Southern Europe and softening conditions in Northern Europe, including the UK.
"City Link's recovery plan is progressing in line with expectations," says Rentokil boss Alan Brown, "both in terms of financial performance and underlying action plan. We expect losses to reduce further in Q3 and for the business to be profitable in Q4."