Wizz Air reports record profit, and Legal & General exits general insurance

“President Trump’s decision to open another front in his trade wars, with a plan to slap tariffs on Mexico, put the markets back under pressure with the FTSE 100 sliding back below the 7,200 mark,” says AJ Bell Investment Director Russ Mould.

“Overnight, ride-hailing app Uber posted a $1bn loss – though in a ‘through the looking glass’ like response the shares actually accelerated as this was in line with expectations."

Wizz Air

“Unlike its peers EasyJet and Ryanair, Hungarian low-cost airline Wizz Air has been in take-off mode so far in 2019.

“Due to its focus on Central and Eastern Europe, Wizz has not been as affected as larger rivals by the uncertainty created by the UK’s tortured exit from the EU.

“The shares have been steadily gaining altitude in recent months, which perhaps explains why they have hit a bit of turbulence today.

“The record results reported this morning could be parked in the solid rather than spectacular category.

“Wizz is seeing some pressure on margins, unsurprisingly given increasing fuel costs, and profit growth of 6% compares somewhat unfavourably with the year-on-year growth above 20% posted in 2018.

“Outlook comments referencing its exposure to the limited visibility facing the rest of the sector suggests the company isn’t completely insulated from the uncertainty around Brexit either.

“Still, these feel like relatively minor quibbles when the company is chalking up such impressive growth in passenger numbers and is steadily rolling out new routes in markets where troubled rivals are pulling out.”

Legal & General

“While Legal & General’s decision to sell its general insurance business, think motor, home, contents and the like, has been in the offing for a while it is still a further reminder of how tough a market this is.

“Significant competition means there is pressure on premiums, while regulatory changes are also making it more difficult for participants to squeeze as much out of their customers.

“The unit produced no profit in 2018 so its sale will have pretty much zero impact on the company’s financial performance and the modest price tag will have only a limited effect on the balance sheet.

“However, it will free up capital to invest in the company’s growth priorities.

“This includes the retirement arm where the company is aiming to benefit from the ageing demographics in developed economies.”

These articles are for information purposes only and are not a personal recommendation or advice.