Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: The Stock Movers Report, your roundup of companies making moves
Speaker 2: in the stock market, harnessing the power of Bloomberg Data.
Speaker 3: Let's take a look at some of the stocks on
Speaker 3: the move today here in Europe. I'm Caroline Hepgar with
Speaker 3: Lizzie Burdener. We're joined by our reporter Clone Malay. Good
Speaker 3: morning clothing. Let's start here in the UK with a
Speaker 3: defense business, Kinetic. They've had results out obviously this is
Speaker 3: quite important. They're quite closely tied with government.
Speaker 1: Yeah, absolutely so, Connecticut Defense Technology Company. So essentially they
Speaker 1: don't make the missiles themselves. It's more the software rather
Speaker 1: than the hardware. And this morning they came out with
Speaker 1: quite strong earnings and so that really lifted the shares
Speaker 1: this morning. And the contact that's important to give for
Speaker 1: this big move today is that last March last year,
Speaker 1: they had quite a big profit warning with lots of
Speaker 1: contract delays, a lot of weakness in the US business,
Speaker 1: and so they embarked on this sort of big restructuring
Speaker 1: making the company as smaller. So they got rid of,
Speaker 1: for example, the US federal IT business that had been
Speaker 1: quite badly impacted by the government funding cuts in the US,
Speaker 1: and so today's results, which have been pretty good, they
Speaker 1: seem to indicate that this big turnaround, this big restructuring
Speaker 1: has worked and that the foundations are now quite solid
Speaker 1: for the company. So we've got a record order intake,
Speaker 1: record order backlog as well, involvement in a lot of
Speaker 1: big UK defense projects. As you mentioned, they're very exposed
Speaker 1: to the UK government projects something like putting laser systems
Speaker 1: onto Royal Navy ships, for example, which is a partnership
Speaker 1: they've got with Leonardo, the Italian defense firm, and all
Speaker 1: of that leading to much better free cash flow and
Speaker 1: therefore big shareholder returns, extending their buy back, boosting the
Speaker 1: dividend as well. And so we've seen that really booster
Speaker 1: shares this morning. And I spoke with the CEO this
Speaker 1: morning who told me that the political instability that we're
Speaker 1: seeing in the UK will have no bearing on the
Speaker 1: performance going forward either. So we've got a very positive,
Speaker 1: kind of optimistic tone for Kinetic and that's driving the shares.
Speaker 3: Okay, let's also talk about easy Jet because we all
Speaker 3: want to know if we can go on holiday this summer.
Speaker 3: We've had Ryanair earnings already.
Speaker 2: How does EasyJet weigh up?
Speaker 1: Yeah, easy Jet. It's interesting because the shares are a
Speaker 1: bit unsure of where to go for easy Jet. This morning,
Speaker 1: they fluctuated quite a bit because the loss for the
Speaker 1: first half of the year was worse than expected, but
Speaker 1: it was still within what Alyss had expected and what
Speaker 1: the company had guided for. And of course the stock
Speaker 1: was also very weak going into the earnings, given that
Speaker 1: they had a profit warning about a month ago, so
Speaker 1: the expectations were already very low, which explains this kind
Speaker 1: of fairly muted share price reaction. And of course what
Speaker 1: EasyJet is dealing with is the same thing that all
Speaker 1: airlines are dealing with, including Ryan there that we had recently,
Speaker 1: which is much higher fuel costs, which means that they
Speaker 1: have to raise ticket prices, which means that people then
Speaker 1: hold back on buying flights, and so this is kind
Speaker 1: of like this visual cycle that then is created. And
Speaker 1: easy Jet said that summer bookings were behind the levels
Speaker 1: seen last year and so that people are really waiting
Speaker 1: and booking later as well, so it really impacts visibility
Speaker 1: for the company. But they said the schedule would still
Speaker 1: be going ahead as planned, so we will be able
Speaker 1: to go on holiday, but people might be booking them
Speaker 1: those holidays a little bit later.
Speaker 3: Yes, long gone are the days of those like three
Speaker 3: hundred dollars four hundred dollar flights London to New York
Speaker 3: coming us in the really mirror, isn't it Anyway? Let's
Speaker 3: think about Jenner rarely turn us. What's driving the moves
Speaker 3: of the insurance firm?
Speaker 1: Yeah, perhaps pretty solid earnings this morning. The CEO had
Speaker 1: been trying to lift profitability by expanding into areas like
Speaker 1: a non life insurance and asset management as well, and
Speaker 1: so that seems to be working pretty well. The CFO
Speaker 1: has also said that the company was open to reviewing
Speaker 1: partnerships to accelerate a growth, and that has been in
Speaker 1: response to a question about possible partnerships with UniCredit. Generally
Speaker 1: has been kind of caught in the middle of a
Speaker 1: lot of M and A activity and dealings in Italy,
Speaker 1: and there's been a lot of speculation around the future
Speaker 1: of that insurer, and so this is also what is
Speaker 1: driving those shares this morning.
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