Speaker 1: Bloomberg Audio Studios, podcasts, radio news, the.
Speaker 2: Stock Movers podcast. This is your roundup of companies making
Speaker 2: news on Wall Street and beyond, harnessing the power of
Speaker 2: Bloomberg data.
Speaker 3: Now, let's look at some stocks on the move today
Speaker 3: in Europe. We're joined by Bloomberg's at Markets Today, editor
Speaker 3: Sam On said, good morning Sam, So he throw it's
Speaker 3: closing for the entire day until midnight tonight. The market
Speaker 3: reaction to this.
Speaker 4: So the main market reaction we're seeing is in IAG shares.
Speaker 4: So i aged, the owner of British Airways, he throw
Speaker 4: their home base. So it's a very major disruption. Remember
Speaker 4: they also own Iberia Air, Lingus and a couple of
Speaker 4: a couple of budget airlines as well, so it's a
Speaker 4: really significant disruption for them. In terms of the other
Speaker 4: market reaction actually has been relatively you know small, and
Speaker 4: there's a little bit of you know, easyjets moved to
Speaker 4: He's moved with IAG in particular. The Jeffrey's out this
Speaker 4: morning saying that the earnings for FAG may well take
Speaker 4: a hit one to three percent because of compensation costs.
Speaker 4: Because often even though you could probably make a pretty
Speaker 4: strong argument this is not necessarily the airline's fault that
Speaker 4: this is happening. They tend to bear the brunt of
Speaker 4: those compensation costs and that could hit their earnings. And
Speaker 4: for a g you know, been on a very good
Speaker 4: run and at the start of this year that's been
Speaker 4: dented a bit, and this is another dent in their armor.
Speaker 1: Yeah, indeed, and it's worth remembering that it's not just
Speaker 1: the flights that are to and from London, it's the
Speaker 1: connections of the huge part of their business as well,
Speaker 1: which is why the airline network for that company is
Speaker 1: particularly vulnerable to disruptions as heat throw. And let's turn
Speaker 1: it next to a share in Germany, the perfume maker Douglas.
Speaker 1: What's going on there?
Speaker 4: Yeah, quite a hefty drop there. So they were down,
Speaker 4: as I got up from my desk, about twenty percent,
Speaker 4: down to half their IPO price. Now, so it's actually
Speaker 4: a relatively recent IPO in Germany and has not been
Speaker 4: performing particularly well. Most of that is down to a
Speaker 4: consumer slowdown in France and Germany. They're two key markets.
Speaker 4: And yeah, there shares an enormous amount of pressure and
Speaker 4: as I say, in particular, you know, this is one
Speaker 4: the companies that when they listed, this was held up
Speaker 4: as an example of a little bit of a bounce
Speaker 4: back in European IPOs. It was quite a significant IPI.
Speaker 4: I think it's about eight billion euros they were valued
Speaker 4: at when they first listed. They're at about half that now.
Speaker 4: So not a great story for Germany's consumer market there. Okay,
Speaker 4: it's Friday. Let's talk pubs, shall we.
Speaker 3: How is a Weatherspoons doing in terms of the rising
Speaker 3: labor costs? Because we're in March. The increase in minimum
Speaker 3: wage is going to come into force at the beginning
Speaker 3: of April. This was announced in October, so companies have
Speaker 3: had some time to think about it, maybe to plan
Speaker 3: for it. But it is obviously those industries where they
Speaker 3: have perhaps you know, minimum wage workers the most that
Speaker 3: will be affected badly.
Speaker 4: What about Weatherspoons, Yeah, and quite a significant effect for them.
Speaker 4: So very labor intensive industry, right, So costs are going
Speaker 4: up kind of across the whole industry. But Weatherspoons, remember,
Speaker 4: is to operates at the cheaper end of the market, right,
Speaker 4: so they tend to operate at lower margins than some
Speaker 4: of the pubs that you know, more premium pubs. They
Speaker 4: have a statement in there today sixty million pounds of
Speaker 4: extra costs, so not just the national living wage but
Speaker 4: also the employer's national insurance contributions as well. That translates
Speaker 4: for them to fifteen hundred pounds per week per pub.
Speaker 4: So it's quite a significant increase in costs for them
Speaker 4: and that is likely to weigh on their marches and
Speaker 4: more so for them, as I say, because they operate
Speaker 4: at that lower price point and so consumer weakening there,
Speaker 4: you know, a big squeeze on Weatherspoons.
Speaker 1: And this was coming after what was quite a strong
Speaker 1: festive season, end of year season for pub groups in
Speaker 1: the UK, and that a lass just looking at HSBC
Speaker 1: being reasonably bullish on pubs and a note they put
Speaker 1: out last month because the sales were good. But now
Speaker 1: it's the cast they're coming into focus.
Speaker 4: Yeah, well well I think actually you know, actually even
Speaker 4: in Weatherspoons' is report today, so the main focus and
Speaker 4: the reason their shares are downe and I think they've dropped
Speaker 4: it again when I got up about twelve percent, actually
Speaker 4: hitting a two year low for them. In particular they
Speaker 4: offsetting it becomes much more difficult because they operate at
Speaker 4: that lower price point, right, Their margins are the focus today,
Speaker 4: but actually their sales too have picked up a bit
Speaker 4: so from the first half. Over the course of the
Speaker 4: last sort of eight to ten weeks, Life forlike sales
Speaker 4: growth has actually increased a little bit. So sales are
Speaker 4: going very well, and that's probably the same across the industry.
Speaker 4: But for Weatherspoons, the margins are becoming a much bigger concern.
Speaker 2: The Stockmovers podcast from Bloomberg Radio. Check back with us
Speaker 2: throughout the day for the latest roundup of companies making
Speaker 2: news on Wall Street and for the latest market moving headlines.
Speaker 2: Listen to Bloomberg Radio Live, catch us on YouTube, Bloomberg
Speaker 2: dot com, and on Applecarplay and Android Atto with the
Speaker 2: Bloomberg Business app.