WEBVTT - QinetiQ Soars, EasyJet Fluctuates, Generali Advances

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>The Stock Movers Report, your roundup of companies making moves

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<v Speaker 2>in the stock market, harnessing the power of Bloomberg Data.

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<v Speaker 3>Let's take a look at some of the stocks on

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<v Speaker 3>the move today here in Europe. I'm Caroline Hepgar with

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<v Speaker 3>Lizzie Burdener. We're joined by our reporter Clone Malay. Good

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<v Speaker 3>morning clothing. Let's start here in the UK with a

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<v Speaker 3>defense business, Kinetic. They've had results out obviously this is

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<v Speaker 3>quite important. They're quite closely tied with government.

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<v Speaker 1>Yeah, absolutely so, Connecticut Defense Technology Company. So essentially they

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<v Speaker 1>don't make the missiles themselves. It's more the software rather

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<v Speaker 1>than the hardware. And this morning they came out with

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<v Speaker 1>quite strong earnings and so that really lifted the shares

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<v Speaker 1>this morning. And the contact that's important to give for

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<v Speaker 1>this big move today is that last March last year,

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<v Speaker 1>they had quite a big profit warning with lots of

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<v Speaker 1>contract delays, a lot of weakness in the US business,

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<v Speaker 1>and so they embarked on this sort of big restructuring

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<v Speaker 1>making the company as smaller. So they got rid of,

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<v Speaker 1>for example, the US federal IT business that had been

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<v Speaker 1>quite badly impacted by the government funding cuts in the US,

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<v Speaker 1>and so today's results, which have been pretty good, they

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<v Speaker 1>seem to indicate that this big turnaround, this big restructuring

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<v Speaker 1>has worked and that the foundations are now quite solid

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<v Speaker 1>for the company. So we've got a record order intake,

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<v Speaker 1>record order backlog as well, involvement in a lot of

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<v Speaker 1>big UK defense projects. As you mentioned, they're very exposed

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<v Speaker 1>to the UK government projects something like putting laser systems

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<v Speaker 1>onto Royal Navy ships, for example, which is a partnership

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<v Speaker 1>they've got with Leonardo, the Italian defense firm, and all

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<v Speaker 1>of that leading to much better free cash flow and

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<v Speaker 1>therefore big shareholder returns, extending their buy back, boosting the

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<v Speaker 1>dividend as well. And so we've seen that really booster

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<v Speaker 1>shares this morning. And I spoke with the CEO this

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<v Speaker 1>morning who told me that the political instability that we're

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<v Speaker 1>seeing in the UK will have no bearing on the

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<v Speaker 1>performance going forward either. So we've got a very positive,

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<v Speaker 1>kind of optimistic tone for Kinetic and that's driving the shares.

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<v Speaker 3>Okay, let's also talk about easy Jet because we all

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<v Speaker 3>want to know if we can go on holiday this summer.

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<v Speaker 3>We've had Ryanair earnings already.

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<v Speaker 2>How does EasyJet weigh up?

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<v Speaker 1>Yeah, easy Jet. It's interesting because the shares are a

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<v Speaker 1>bit unsure of where to go for easy Jet. This morning,

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<v Speaker 1>they fluctuated quite a bit because the loss for the

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<v Speaker 1>first half of the year was worse than expected, but

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<v Speaker 1>it was still within what Alyss had expected and what

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<v Speaker 1>the company had guided for. And of course the stock

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<v Speaker 1>was also very weak going into the earnings, given that

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<v Speaker 1>they had a profit warning about a month ago, so

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<v Speaker 1>the expectations were already very low, which explains this kind

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<v Speaker 1>of fairly muted share price reaction. And of course what

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<v Speaker 1>EasyJet is dealing with is the same thing that all

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<v Speaker 1>airlines are dealing with, including Ryan there that we had recently,

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<v Speaker 1>which is much higher fuel costs, which means that they

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<v Speaker 1>have to raise ticket prices, which means that people then

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<v Speaker 1>hold back on buying flights, and so this is kind

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<v Speaker 1>of like this visual cycle that then is created. And

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<v Speaker 1>easy Jet said that summer bookings were behind the levels

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<v Speaker 1>seen last year and so that people are really waiting

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<v Speaker 1>and booking later as well, so it really impacts visibility

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<v Speaker 1>for the company. But they said the schedule would still

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<v Speaker 1>be going ahead as planned, so we will be able

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<v Speaker 1>to go on holiday, but people might be booking them

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<v Speaker 1>those holidays a little bit later.

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<v Speaker 3>Yes, long gone are the days of those like three

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<v Speaker 3>hundred dollars four hundred dollar flights London to New York

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<v Speaker 3>coming us in the really mirror, isn't it Anyway? Let's

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<v Speaker 3>think about Jenner rarely turn us. What's driving the moves

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<v Speaker 3>of the insurance firm?

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<v Speaker 1>Yeah, perhaps pretty solid earnings this morning. The CEO had

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<v Speaker 1>been trying to lift profitability by expanding into areas like

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<v Speaker 1>a non life insurance and asset management as well, and

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<v Speaker 1>so that seems to be working pretty well. The CFO

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<v Speaker 1>has also said that the company was open to reviewing

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<v Speaker 1>partnerships to accelerate a growth, and that has been in

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<v Speaker 1>response to a question about possible partnerships with UniCredit. Generally

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<v Speaker 1>has been kind of caught in the middle of a

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<v Speaker 1>lot of M and A activity and dealings in Italy,

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<v Speaker 1>and there's been a lot of speculation around the future

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<v Speaker 1>of that insurer, and so this is also what is

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<v Speaker 1>driving those shares this morning.

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<v Speaker 2>The Stock Movers report from Bloomberg Radio. Check back with

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