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MARKET REPORT: Airlines nosedive after Portugal green list U-turn

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Airline stocks fell sharply after Portugal was removed from the green list and relegated to amber.

The move sent shivers down the spines of investors and traders, with some speculating that a major airline could go under as the sector continues to burn through cash and planes remain grounded.

The UK relaunched travel on May 17 following more than four months of lockdown, with Portugal the only big destination open to UK travellers. But yesterday all hope for a swift return for airline firms was dashed.

Flight fright: The Government’s decision to move Portugal from the UK’s travel green list to the amber list sent stocks in airlines plunging    

Danni Hewson, financial analyst at AJ Bell, said no company was immune to the damage and even speculated that British Airways – which is owned by IAG – and Easyjet could suffer.

She said: ‘There could be a big scalp. These companies have to keep massive engines sitting around doing nothing on the tarmac and nobody knows how much longer this is going on for.

Investors need to have a hard look at British Airways which relies on business travel and long haul.’

Stock Watch – Zambeef Products 

Heavy rains helped drive a whopping increase in first-half profits at African agricultural business Zambeef Products.

The AIM-listed firm – which supplies pork, dairy, beef, chicken and cereals in Zambia, Ghana and Nigeria – said earnings were expected to be 2,167 per cent higher in US dollar terms than the same period of last year.

This was partly down to rainfall meaning the company had to spend less money on generator fuel.

Zambeef warned trading was still uncertain because of Covid – but shares rose 14.8 per cent, or 1p, to 7.75p.  

IAG shares were down 5.4 per cent, or 11.22p, at 198.18p, Easyjet was off 5.1 per cent, or 51.3p, at 959.2p and Wizz Air dropped 3.8 per cent, or 187p, at 4686p. 

Unsurprisingly, package holiday firms also took a knock and Tui shed 4.5 per cent, or 19.9p, at 419.8p, while companies which operate inside airports like WH Smith fell. WH Smith was down 4.7 per cent, or 85p, at 1716p.

Dixons Carphone managed to avoid the worst of it as the electrical goods seller took the decision to close all airport stores back in April. 

At the time Dixons blamed the Government’s decision to scrap tax-free shopping and the move is looking increasingly wise given the chaos that the travel industry finds itself in now.

Dixons shares lost 1.2 per cent, or 1.6p, at 135.8p. The falls contributed to the FTSE 100 being firmly in the red, off 0.6 per cent, 43.65 points, at 7064.35. The FTSE 250, meanwhile, was also down 0.6 per cent, or 130.89 points, at 22,802.4.

Miners were also having a session to forget amid further data out of China showing that the world’s second-largest economy continues to slow this year.

Glencore lost 2.6 per cent, or 8.5p at 325.05p and Anglo American was off 2.9 per cent, or 94.5p, at 3201p.

Meanwhile BT’s army of small shareholders got a reality check when a City bank brought out the red pen to declare the shares ‘overcooked’ after a spectacular run since March.

The ‘sell’ recommendation from Deutsche Bank sent shares down 1.9 per cent, or 3.45p, to 176.95p, having been on a charge in recent weeks after chief executive Philip Jansen’s pledge to ‘build like fury’ with £25billion investment in ultra-fast internet speeds.

Those had helped shares to nudge 180p but Deutsche’s Robert Grindle still thinks a price of 140p is more appropriate. But it wasn’t all doom and gloom.

A bright spot came from Johnson Matthey after the speciality chemicals firm was the subject of a big upgrade from analysts at Jefferies. 

They believe the shares are worth 4200p, arguing that the market has been too sceptical about the earnings outlook in clean air and the company’s exposure to energy transition materials. Shares jumped 2.3 per cent, or 71p to 3143p.

Further down the market and Pennon shares jumped 2 per cent, or 21.5p, to 1090p after the utilities giant said it will take on more than 1m customers as it expands into Bristol in an £814million deal.

Pennon has agreed to buy the company behind Bristol Water from its US, European and Japanese owners.

But office space operator Workspace slipped after it swung to a loss for the past year as rental income was dented by lockdown restrictions and the shift towards home working. Shares fell 3.2 per cent, or 29.5p, to 883p after it posted a £235.7million loss for the year to March 31, compared with a £122million profit a year earlier.

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MR MONEY MAKER: Smartspace has big long-term backers

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What’s happening? 

Not another small technology stock which isn’t profitable, was my first reaction when looking at Smartspace Software. 

It has been around for a while on the AIM and I remember it as being a collection of sub-businesses involved in the telecom and IT services sectors. It looked as though it had some interesting parts, but felt like a small compendium of businesses without a clear and comprehensible strategy, although I am sure they would have disagreed. 

However, it seems to have changed and is very much more focused as a software business and, in the current fashionable jargon that seems to be so loved by analysts trying to show off, appears now to be seen as a SaaS business, which in English is ‘Software as a Service’.

‘Focused’: The shares have recovered from last year’s market dip but are not back to their all-time high of 185p back in September 2016

Why Does It Matter? 

Now the business is different and, as the company says on its website, it is ‘focused on digital workspace technologies that make real estate more efficient and organisations more effective’. 

That is to say, using software to make your businesses more efficient by better use of property, people and products. It all sounds worthy but put that against the backdrop of companies redesigning their operations, especially around their premises postCovid, and anything that can improve productivity while controlling costs is going to be very appealing. 

All businesses I have known need an element of luck as well as sound management, and here Smartspace Software finds itself very well positioned for businesses taking advantage of the new economic landscape as well as those trying to change their stripes to blend into the new savannah. 

Although not profitable as yet, next year’s figures may well change that. 

What Should I Do? 

What I also found interesting was the quite high percentage of institutional investment, at nearly 70 per cent if you include some of the hedge funds. Apart from the much smaller proportion of unreliable hedgies, the institutional holdings would imply a greater proportion of longer-term large shareholders, something I think vital for growing companies, and encouraging for private investors.

Any Suggestions? 

The shares have recovered from last year’s market dip but are not back to their all-time high of 185p back in September 2016. They are now around 171p. 

A direct investment in such a small company is a higher risk, and the AIM listings are notoriously illiquid, which means that trading out of the stock is not always easy. 

However, as a medium-term investment I like it. For a less risky approach then there is a US-based fund (SPDR S&P Software & Services ETF) covering this area but it has already seen some spectacular rises and maybe it would be better to wait a little and let some of the steam come off the sector. 

Justin Urquhart Stewart co-founded fund manager 7IM and is chairman of investment platform Regionally 

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RAY MASSEY drives the Genesis GV80 sports utility

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First impressions count, and new kid on the car-block Genesis makes an impression with its GV80 sports utility vehicle, which I’ve been test driving on UK roads this week. 

Catch a fleeting glance and you might even mistake it for a Bentley Bentayga SUV, costing up to three times as much. 

Purely coincidental, I’m sure, that the Genesis chief designer is Belgian Luc Donckerwolke, who was previously design director at Bentley. Set up five years ago, Genesis is the luxury vehicle division of the South Korea’s Hyundai Motor Group, which includes the Hyundai and Kia brands. 

Order books open officially from July 1, with first deliveries later that month. Available as a five and seven-seater configuration, the GV80 line-up starts at £56,715 for the Premium Line. 

Double-take: The new Genesis GV80 could be mistaken for a Bentley Bentayga

I drove a seven-seater version of the Luxury Line priced from £62,315, but loaded with £15,000 of added extra kit including innovation packs and Nappa leather seats that raised it to a cool £77,485. Still, that’s around half the price of a Bentley Bentayga (from about £150,000). 

Visually, you can’t miss the GV80’s bold crest grille, winged badge, solid stance and double-lined LED quad lamps. 

The interior is impressive, too. Sophisticated with a large dashboard infotainment touch-screen, 12-inch head-up display, cossetting seats and a premium feel. 

Riding on 22in wheels (20in as standard), the willing turbocharged 3.0-litre, 278hp, straight six-cylinder diesel engine linked to an eight- speed automatic gearbox provides spirited acceleration, particularly in Sport mode. 

It achieves rest to 62 mph in 7.5 seconds up to a top speed of 143 mph. Also on offer is a turbocharged, 304hp, 2.5 -litre 4-cylinder petrol engine. 

For long trips, it’s a smooth cruiser in Comfort mode, and you can choose Eco if you are prioritising fuel conservation.  

I even did a bit of unplanned and impromptu grass and gravel off-roading in ‘Terrain’ mode – courtesy of a sat-nav short-cut – and its all-wheel drive coped fine.

You navigate your way around the drive modes via a circular dial. There’s another just above it to find your way around the infotainment system.

It’s practical with flexible folding seats, and buttons which allow you to do it from the rear boot when loading.

Tech features include remote smart parking assist (which lets you control the car out of tight spots while you stand and watch), augmented reality sat-nav, a 3D instrument cluster and head up display, a clever blind-spot monitor that gives a video feed on the dashboard of what’s behind, and a system to detect potholes and speedbumps ahead and tweak the suspension ahead of time to to cope.

Both the GV80 and G80 saloon (on the road from £37,460) – which I also drove and which shares many of the same attributes apart from the specialist SUV elements – have been specially tuned for UK and continental roads, with tens of thousands of miles covered across 15 countries on some of the toughest and most challenging roads, as well as on the Nürburgring circuit. 

More models- including electric – will follow soon. 

The GV80 is also the car in which golfer Tiger Woods had a recent spectacular and well-publicised prang in the US – so good job it has a top five-star safety rating. 

With its first ‘studio’ showroom in West London’s Westfield Shopping Centre now open, order books open officially from July 1, with first deliveries later that month.

Genesis promises a ‘no pressure, no stress’ sales approach, a largely female staff of ‘personal assistants’ with travel industry service and luxury goods experience, a ‘we come to you’ sales policy and five-year care plan with home or office delivery and collection, transparent pricing, no haggling or discounting, that ‘removes the need to visit a dealer ever again’.

Engines for the G80 saloon in the UK are the 2.5 litre 4-cylinder 304 horse-power single turbo petrol and a frugal 2.2 litre 4-cylinder diesel.

A 3.5 litre 375hp V6 petrol engine – offered in some markets – is not planned for the UK market for either model.

Also coming down the line is G70 shooting-brake designed specifically for Europe and expected later this year.

Three electric cars will also arrive within the first year. The first will be an electric version of the G80 which had its world premiere at the Auto Shanghai with prices estimated at around £60,000.

A further two battery electric cars – one built on a dedicated electric platform – will also be launched within the first year in Europe as part of the product roll-out.     

Imitation?: The real deal Bentley Bentayga is a league beyond the new Genesis GV80 in terms of luxurious quality and performance

So is this a Korean copycat ‘Bootleg Bentley’? 

To be fair, the real deal Bentley Bentayga is a league beyond the new Genesis GV80 in terms of luxurious quality and performance. 

If imitation is the sincerest form of flattery, the Bentley chaps in Crewe should feel flattered by the Genesis GV80’s impressive homage to their skills. 

‘Rusty’ driving ability concerns 75% of motorists

Three-quarters of motorists are nervous about other people’s ‘rusty’ driving ability after many stopped driving during lockdown, says a poll by comparethemarket.com. 

More than a third (36 per cent) are even nervous about their own ability after a long period of absence behind the wheel. 

Driven to distraction: More than a third of drivers are nervous about their own ability after a long period of absence behind the wheel

Younger motorists are the most worried about returning to driving, with more than eight in ten (84 per cent) of those under 25 concerned about other drivers and more than half (55 per cent) nervous about their own driving ability. 

Londoner Grace Gausden, who’d not driven for five years since passing her test, took a two-hour refresher course offered by NFU Mutual with specialists Drive Doctors. 

RED, AA and BSM also offer courses.

Encouraging news for women in motor industry

The motor industry needs more women in senior roles, but here’s some encouraging news: Alison Jones, UK manager and a global senior vice-president for new mega group Stellantis, has just been recognised as an ­Outstanding UK Leader in Autocar’s annual awards. 

‘Decisive leadership’: Alison Jones is the UK manager and a global senior vice-president for new mega group Stellantis

She took up the role in March, overseeing the operation of brands such as DS, Peugeot, Citroen, Abarth, Alfa Romeo, Fiat and Jeep. 

The magazine praised her ‘­decisive leadership…through the challenges of Brexit, Covid and the merger with FCA to form Stellantis’. 

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This post first appeared on Daily mail

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Online cycling store Wiggle set to list on US stock market

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Online cycling store Wiggle is set to list on the US stock market, after being snapped up by a German rival. 

The firm, which traces its roots back to a Portsmouth bike shop called Butler Cycles, is being bought from its private equity owner Bridgepoint by Signa Sports United. 

Hot property: Wiggle – which once sponsored the UCI women’s professional cycling team led by Rochelle Gilmore (pictured) – is now the world’s second largest online cycle retailer

Signa plans to merge with US special acquisition company (Spac) Yucaipa Acquisition Corporation, to give it a New York listing. Spacs have become popular as investors look to put their money to work. 

Yucaipa is led by Ron Burkle, the US billionaire behind the Soho House chain of private members’ clubs. 

The deal will value Signa and Wiggle at a total of £2.3billion. 

Wiggle – which once sponsored the UCI women’s professional cycling team led by Rochelle Gilmore – is now the world’s second largest online cycle retailer, selling brands such as Oakley and Rapha. 

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