Market Report: Diageo Fizz shares its search for a new president

Drinks giant Diageo has continued its much-needed and welcome recovery amid reports it has begun a search for a chairman.

Shares in the group behind Guinness, Johnnie Walker and Smirnoff rose 1.1 per cent, or 31.5 pence, to 2,936.5 pence, bringing its gains in just over a week to about 12 per cent.

This gathering will be a boost for coach Debra Crowe, who has been under the weight of the crisis since she succeeded Sir Ivan Menezes last summer.

The latest share price movement came as Sky News reported that Diageo was searching for a successor to chairman Javier Ferran, who has held the position since 2017.

The company is facing a sales slowdown in most parts of the world – but not in Britain – and this week reported a decline in revenue and profits for the six months to the end of December.

Raising the Cup: Diageo is the group behind Guinness, Johnnie Walker and Smirnoff

Raising the Cup: Diageo is the group behind Guinness, Johnnie Walker and Smirnoff

Since publishing its somewhat shaky results on Tuesday, the company has been hit with a number of downgrades by brokers, including from HSBC and Stifel. While the recent rise in share prices is welcome, the stock is still down more than 7 per cent since problems at its Latin American and Caribbean subsidiary led to a profit warning in November.

The FTSE 100 fell 0.09 per cent, or 6.62 points, to 7,615.54, and the FTSE 250 rose 0.2 per cent, or 41.48 points, to 19,172.64, as bumper US technology results and interest rate expectations dominated traders’ thoughts.

Sophie Lund-Yates, senior equity strategist at Hargreaves Lansdowne, said the “wave of results from across the Bund presented a fairly positive outlook” for investors.

Airline shares took off after Dublin-listed Wizz Air and Ryanair reported a rise in passenger numbers since the start of the year. Wizz Air rose 10.3 per cent, or 204p, to 2,188p after reporting a 14.2 per cent rise in passenger traffic in January to 4.7 million. This gave easyJet a rise (up 2.9 per cent, or 16.4 pence, to 575.2 pence) as well as British Airways owner IAG, which rose 0.9 per cent, or 1.3 pence, to 147 pence.

Ryanair shares rose 1.3 per cent in Ireland after it said it carried 12.2 million passengers last month – an increase of 3 per cent on January last year. However, it was not all roses for the industry, as Ryanair revealed that more than 950 flights had been canceled due to the conflict between Israel and Hamas.

Both Ryanair and Wizz Air reported a decrease in the so-called load factor, that is, the percentage of seats occupied. Ryanair said its load factor fell to 89% – meaning it flew planes with more than one in every ten seats empty – while it fell to 82% at Wizz Air.

But that was not enough to dampen enthusiasm among investors, while shares of other travel companies also made gains. Prices for cruise giant Carnival rose 1.2%, or 14p, to 1,178p. Sainsbury’s shares (up 3 per cent, or 8 pence, to 275.2 pence) and Tesco (2.8 per cent, or 7.9 pence better, at 290.8 pence) received support from analysts at investment bank Morgan Stanley, who raised expectations for UK grocery stores. Based on expectations that it will benefit from lower inflation.

BP shares fell 1.5 percent, or 6.95 pence, to 458.7 pence after the oil and gas major closed its refinery in Whiting, Indiana – the largest in the Midwest – after a power outage.

Meanwhile, BP has confirmed that Kate Thompson will become its chief financial officer. The position was held on an interim basis following the departure of Bernard Looney.

Looney was forced to resign from his position as CEO last September due to personal relationships with employees.

CFO Murray Auchincloss became interim president and Thompson took over as interim CFO. Both positions have been handed over permanently, making Thompson the most powerful woman ever at BP.

Sales momentum accelerated in the latest quarter despite a “challenging macroeconomic environment,” polling firm You Gov said. Shares fell 1.7 per cent, or 20 pence, to 1,185 pence.

(tags for translation)dailymail

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