Paddy Power Betfair and Dalata suffer on Budget 2019 news
Ongoing tensions over Italy’s finances overshadow European trade
Clayton Hotel chain operator Dalata fell as it was confirmed that the State’s 9 per cent hospitality VAT rate was to go. Photograph: David Cantwell
Paddy Power Betfair and hotelier Dalata had contrasting performances after the Government published Budget 2019 on Tuesday. Meanwhile, European stocks finished marginally ahead despite ongoing tensions over Italy’s finances.
Gambling giant Paddy Power Betfair hit a 12-month low after indicating that the Government’s planned doubling of betting tax to 2 per cent in the Republic would cost it €22.8 million a year.
The Republic’s finance minister, Paschal Donohoe, said he planned to double the tax on betting turnover to 2 per cent from January.
Paddy Power’s shares plunged more than 5 per cent to a 12-month low of €70.10 on the back of the news before recovering slightly to close 4.98 per cent lower at €70.55. A statement from the group said such an increase would have cost it £20 million (€22.8 million) over 12 months.
Hotelier Dalata also suffered as the Minister confirmed he would increase the special 9 per cent hospitality VAT rate to 13.5 per cent.
Its shares were down as much as 2.6 per cent at €6.09 at one point but recovered to actually close 0.64 per cent ahead at €6.29.
Traders said investors expected the VAT rate hike but regarded the prospect of a budget increase in betting tax as much less of a certainty.
House builder Cairn added 1 per cent to €1.434 as some budget measures looked to benefit its industry. However, rival Glenveagh tumbled 2.88 per cent to 91.2 cent.
The stock has struggled since the company issued new shares at €1.15 in August.
Ryanair slipped 2.04 per cent to close at €11.755, underperforming its sector on Tuesday. “The shares had held up well over the last few days but they gave a bit back today,” one trader noted.
Aviva fell 2.1p to 463.1p after the insurance group announced that chief executive Mark Wilson would stand down after more than five years at the helm.
The move follows Mr Wilson’s decision in March to join the board of rival asset manager Blackrock, which angered some shareholders.
Sky shares were nearly flat, up 1p at 1,726.5p. The company’s chairman, James Murdoch, resigned from the broadcaster as US cable giant Comcast took formal control of the British firm, having acquired more than 75 per cent of the business.
It comes after Comcast snapped up the 39 per cent stake that belonged to Rupert Murdoch’s 21st Century Fox.
Fast food chain Greggs surged 46p to 1,052p after reporting a 7.3 per cent rise in total sales, marking a pick-up since the first half, when sales were up just 1.5 per cent.
Air France KLM climbed 5.19 per cent to €8.83 amid hopes that the Franco-Dutch airline is close to a deal with labour unions that have inflicted a series of damaging strikes on the business.
German financial technology specialist Wirecard added 8.44 per cent to €182.35 after forecasting that profits would grow sixfold by the middle of the next decade on the back of mushrooming demand for digital payment systems.
Most leading European indices came under pressure on Tuesday as Italy’s bond yields plunged, but they recovered ground later in the day to close marginally ahead.
A rebound in tech stocks buoyed Wall Street. The S&P technology index was up 0.39 per cent, gaining for the first time in four sessions. Leading the index higher were Microsoft, up 1.6 per cent and Apple, up 1.2 per cent.
The trade-sensitive industrials sector was down 0.94 per cent. Caterpillar dropped 2.2 per cent.
American Airlines fell 4.3 per cent after saying fuel prices were higher than expected in the third quarter, raising concerns that improving fares were not enough to offset energy costs.
PPG Industries sank 9.7 per cent, after the speciality chemicals maker said its current-quarter profit would be hit by higher raw material costs and softer demand in China. – Additional reporting: Reuters