British Airways-owner posts surprise profit: The London Rush

IAG's investors had a surprise “upgrade” this morning after the airline group unexpectedly posted a profit this quarter. It was driven by a bounce-back in leisure travel, particularly from Iberia, its Spanish airline. That's led them to say they'll beat their previous full-year guidance. Business class, however, may soon need to be renamed to “luxury” given the slow recovery in corporate travel, presumably falling victim to shrinking budgets and video conferences.

Enjoy the long weekend, we’ll be back on Tuesday. 

Here’s the key business news from London this morning:

In The City

IAG SA: The British Airways owner posted a surprise profit in the first quarter of the year as its operations return to near pre-pandemic levels.

• Robust demand, particularly in leisure travel, and lower fuel prices meant all of the company’s airlines performed above expectations
• IAG says summer bookings are encouraging at 80% for 2Q

Liontrust Asset Management Plc: An investor group including French telecom billionaire Xavier Niel said it may not accept Liontrust’s offer for Swiss asset manager GAM Holding AG. 

• The group stressed that Liontrust “only offers its own shares, and is not making any cash offer,” which would imply that GAM shareholders will be “subject to the volatility of Liontrust shares without any firm price for a business that has significant intrinsic value”

Numis Corp.: The boutique investment bank reported a 55% plunge in first-half profit in what’s likely to be the City of London firm’s final results as standalone firm before it is absorbed by Deutsche Bank AG.

• The bank’s grim results stem from a “down cycle” in capital markets, leaving their advisory business as a key profit generator 

Ithaca Energy Plc: The oil and gas producer has signed an agreement with Shell to market its interests in Cambo, the second largest undeveloped oil and gas discovery in the UK North sea. Under the agreement, Shell would sell its 30% stake in the field.

In Westminster

Businesses in Northern Ireland said they’re pushing ahead with investments, despite a stalemate that’s paralysed the region’s political institutions for the past 15 months.

Meanwhile, the free-trade agreement between Australia and the UK will take effect May 31 as Prime Minister Anthony Albanese highlighted the deflationary benefits of the deal during a visit to London for King Charles III’s coronation.

In Case You Missed It 

Ping An Insurance Co.’s fight for an overhaul at HSBC Holdings Plc will come to a head at the bank’s annual shareholder meeting in Birmingham later today. Investors will vote on two special resolutions that would require HSBC to provide regular updates on the structure of its Asian business and restore its dividend to its pre-Covid level. 

Finally, London may be a great place to cash in on volatility, BlackRock’s Alex Brazier tells In the City. Listen here:

Looking Ahead 

The shorter week ahead looks much less packed with corporate updates than the previous ones. We’ll get results from companies including online fashion retailer Asos Plc and engineering firm Rolls Royce Holdings Plc. 

The Bank of England’s rate decision will take center stage on Thursday, with UK economists expecting just one more quarter-point hike even though inflation is stuck in double digits.

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