There is no other unscheduled cancellation on easyJet. This time it is the chief operating officer who is grounded, even though the precise circumstances of Peter Bellew’s departure from the company were lost in the fog of corporate discourse. He has given up “to look for other business opportunities,” the statement said, without describing what opportunities.
Almost the only clear detail was that Bellew resigned on Friday. Since Monday morning at 7 a.m., to the point, it would be the usual time to inform shareholders, the other mini-mystery is why easyJet has taken until 11:30 a.m. to do so. Corporate engagement with fast communication needs to work.
Bellew was hired by Ryanair amid much fanfare just two and a half years ago, so you can understand why the stock market reduced another 4% of the price of easyJet shares. It was assumed that an old man in the industry was just the kind of executive to restore order to operations after the latest upheavals. Instead, David Morgan, the director of flight operations, will “go perfectly” in the role, said Johan Lundgren, the CEO.
If a staff change makes the network work better this summer, no one, let alone gamblers, will complain. An open question, however, is whether the switch is also an admission by easyJet that not all of its problems can be blamed on Gatwick Airport, air traffic controllers, hand scarcity. work and the problems of the general administration. The operating conditions are complicated, no doubt. But Lundgren’s boasted in May of how easyJet had “transformed” during the pandemic and had acquired “renewed strength” was also considered very premature in light of events.
The other intriguing question is the background role of Stephen Hester, president since last December. Hester, formerly Royal Bank of Scotland and RSA Insurance Group, is an old-fashioned boardroom operator. Lundgren will know that he finally stops at the executive director’s door.
The possible need to raise cash is a question that AO has yet to answer
Still, easyJet is overwhelmed by the premature optimism of AO World, an online retailer of refrigerators, freezers, laptops and the like.
“I think we’ve seen 10 years of change in 10 months,” founder and CEO John Roberts said in January 2021 after blocking conditions put a rocket on demand. It was a mirage. Sales reversed when Covid’s restrictions eased and AO last month said it would abandon its seven-year adventure in Germany and join the UK. Now comes a reminder of how horizons have also shrunk at home – a story from a credit insurer that reduces coverage.
The cover in question is the protection purchased by suppliers against the risk of a retailer failing. AO confirmed, in essence, the Sunday Times report that Atradius, one of the market’s leading firms, had reduced its exposure, but the reassuring explanation that accompanies it did not have the desired effect. Shares lost 18%.
The cover was “exceeded” in May, AO said, “from the high levels that had been established and required during the pandemic period.” So Atradius was only engaged in a regular household chore? Or do suppliers have to pay more, so to speak, for the same protection? It was not entirely clear.
AO was more convincing about his efforts to protect his balance sheet. The cost of the German exit will be at the “lower end” of the original estimate of £ 15 million. Until April 2024 there is a £ 80 million line of credit. Nothing has changed in the trading realm since the last April update and the overdraft coverage “has had no effect on AO’s liquidity position”.
Well, all of these points are relevant. But they don’t put to bed some questions from city analysts about the possible need to raise cash to adapt to new business circumstances. After the stock price dropped from 400p to 56p in 18 months, it’s a natural question.
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Just Eat celebrations can make investors scratch their heads
The party continues with Just Eat Takeaway, the Dutch food delivery company that was previously a member of the FTSE 100 index. The highlight of the winter was a ski trip for staff in Switzerland, which is considered which cost $ 16 million (£ 13 million). Now, via Bloomberg, news arrives of the company’s German operation, Lieferando, of an “exclusive pool party” where invitations specified that “drivers and casual workers” should be excluded.
Everything is essential for consolidating the morale of the headquarters, no doubt, but investors may be wondering what they are supposed to celebrate: the share price has dropped 67% this year.