BUSINESS LIVE: IAG profits hit £3bn; Haleon ups sales forecast; LSEG eyes IPO resurgence

John Moore, senior investment manager at RBC Brewin Dolphin:

‘IAG hasn’t really taken off since the Covid-19 pandemic, with the shares broadly where they were during the summer of 2020.

‘But, easyJet’s return to the FTSE 100 confirms that conditions are generally smoother for airlines and today’s results from IAG may just be the catalyst its share price needs.

‘Profits have surged and the group looks like it will generate significant amounts of free cashflow this year, underpinned by strong bookings for the first half of 2024.

‘There are, however, still clouds on the horizon, with aircraft availability and softer demand for routes to and from Asia likely to be ongoing challenges.

‘After a turbulent few years, IAG looks in better shape than it has done for some time and shareholders will be hoping that starts to be reflected in the share price.’

Chief executive of London Stock Exchange Group David Schwimmer has said there is an ‘encouraging’ IPO pipeline for the exchange, bringing hope for the capital’s listed market after a baron few years.

His comments came as LSEG reported total income, excluding recoveries, of £8billion for 2023, up 7.8 per cent on the prior year, and at the higher end of a 6 to 8 per cent forecast and slightly above analysts consensus.

Earnings per share totalled 323.9p, up 1.9 per cent on the prior year and slightly below analysts consensus of 328.2p.

LSEG is proposing a dividend of 79.3p per share added to the interim dividend of 35.7p, resulting in a total dividend of 115p per share, up 7.5 per cent.

Sensodyne toothpaste-maker Haleon has forecast higher revenue in 2024, thanks to firm demand for its household products ranging from painkillers to multivitamins.

Despite price increases, Haleon’s roster of products has largely kept cheaper private-label competition at bay, with the company gearing up for the upcoming flu season.

Haleon said its organic revenue would rise between 4 and 6 per cent this year, as the consumer healthcare company reported its first full-year results since it was spun off from GSK in 2022.

Analysts on average expect organic revenue to grow by 4.5 per cent, according to a company-compiled consensus.

Haleon, however, said its organic revenue growth in the first quarter would be just below the lower end of its full-year forecast range, citing a strong last year when a strong cold and flu season, a rebound in China, and painkiller Advil’s performance in Canada had lifted its results

Jeremy Hunt is expected to confirm plans for a NatWest share sale in next week’s Budget – as a leading broker said a big price discount would be key to its success.

The Chancellor said in November he was considering a public retail offer as the Treasury aims to sell more of its 33 per cent stake.

British Airways owner International Airlines Group posted record operating profits of €3.5billion (£3billion) for 2023, almost three-times the €1.3billion made in 2022, thanks to the bounce back in travel demand.

The result is higher than its pre-pandemic peak and in line with market expectations.

The group – which also owns airlines Iberia, Vueling and Aer Lingus – said demand continues to be robust, particularly from leisure travellers, with the group’s airlines 92 per cent booked for the first quarter of the year and 62 per cent booked so far for the first half.

Luis Gallego, IAG chief executive, said: ‘In 2023, IAG more than doubled its operating margin and profits compared to 2022, generated excellent free cash flow and strengthened its balance sheet position, recovering capacity to close to pre-Covid 19 levels in most of its core markets.

‘Our airlines operate in the largest and most attractive markets globally and we will continue to invest in our brands to transform the business, improve the customer experience and support the delivery of sustainable growth and world-class margins.’