The battle-scarred transport sector continues to provide a rollercoaster ride for investors after easyJet’s £1.2 billion fundraising was today offset by better news from FirstGroup.
The bus operator’s shares rallied 3% to the top of the FTSE 250 index as the Aberdeen-based group revealed that passenger volumes are back up to 65% of pre-pandemic levels and set to improve further as students return to schools and universities.
FirstGroup’s AGM update also revealed how it plans to distribute £500 million to shareholders following the sale of its US school bus and workplace transport operations.
The quickest way is to ask investors to tender their shares at a set price, although if not enough take up this option a special dividend may be used to spread the remainder.
There’s a much different scenario facing easyJet shareholders as they weigh up whether to commit to the low-cost airline’s heavily discounted rights issue. These newly-created shares were admitted to trading on the London market today, contributing to another big fall of 94.8p to 586p for the easyJet share price.
Shareholders now have until September 27 to register whether they want to subscribe for the new shares in order to retain their existing stake, or possibly sell their rights.
International Airlines Group investors will be watching events closely, particularly after Credit Suisse downgraded the stock on Friday to reflect the possibility of a rights issue at the British Airways owner. Shares held firm today at 145p, a fall of 0.3p.
The wider FTSE 100 index was 33.52 points higher at 7,062.76, driven by a resurgence for banking stocks following losses last week. Lloyds Banking Group rose 0.6p to 43.16p and there was relief for followers of another popular retail stock as Royal Mail rallied 12.8p to 485.9p, despite the Post Office signing a pick-up and drop-off deal with Amazon.
The FTSE 250 index rose 57.43 points to 23,791.31, with the FirstGroup update helping lift Trainline shares up by 7.8p to 373.6p.