EZJ Easyjet Plc

By Robert Wall, Saabira Chaudhuri and Art Patnaude 

LONDON -- Fallout from Britain's vote to break with the European Union cascaded through the boardrooms of the U.K's biggest businesses on Monday, triggering profit warnings from two of the country's best-known firms and forcing executives across Europe to rethink investment and hiring plans.

Budget airline easyJet PLC warned that consumer and economic uncertainty following last week's so-called Brexit vote would hurt results for its third quarter ending June 30. London-focused real estate agency Foxtons Group PLC said its 2016 earnings would be significantly lower than last year's. It had been forecasting a boost in London sales on an expected "remain" vote. That "is now unlikely to materialize," it said on Monday.

Foxtons shares plunged more than 22% to GBP1.05 ($1.43), and easyJet shares fell by a similar margin to GBP10.62. The profit warnings follow one Friday from British Airways parent International Consolidated Airlines Group SA.

Other executives were already charting strategic shifts and defensive plays. In a weekend survey of more than 1,000 members by the Institute of Directors, an organization for company directors and senior business leaders, more than a third of those polled said the vote would force them to cut investment.

"We can't sugarcoat this -- many of our members are feeling anxious," said Simon Walker, the institute's director-general. "A majority of business leaders think the vote for Brexit is bad for them."

Michael O'Leary, chief executive of Dublin-based Ryanair Holdings PLC, Europe's largest airline by annual passengers flown, said he is rethinking how to deploy new planes across Europe after the vote.

"We are taking another 50 aircraft next year. Would we place any of those in the U. K.? It is highly unlikely," he said in an interview. "We will pivot all of our growth into the European Union."

Mr. O'Leary, an outspoken advocate for the remain camp ahead of the vote, said "there clearly is going to be a hit to U.K. GDP and to European GDP. There is three to four months of considerable uncertainty. The pound has fallen through the floor. It has all the feel and hallmark of another 9/11."

It wasn't all gloom and doom. Consumer-goods companies and pharmaceutical giants, which sell a big chunk of their products outside Europe, are relatively protected from the weakening pound and euro. And big oil companies, which do most of their business in dollars around the world, lured British investors fleeing other sectors.

Still, a quarter of directors and executives polled in the IoD survey said they would freeze hiring and 5% said they would cut jobs because of the vote. Roughly 22% said they are considering moving some of their operations outside of the U.K.

In British real estate, uncertainty over a possible Brexit had already hit the housing market ahead of the referendum. Earlier this month, property brokers were predicting prices would fall this summer for the first time since 2012. After the vote, analysts were widely predicting transaction volumes and values would fall throughout the U.K.

"The outcome of the referendum will almost certainly have a negative impact on both prices and transaction numbers," the Centre for Economics & Business Research said.

There were some optimists among agents. Amid a fast-weakening pound, David Adams, the head of John Taylor's real estate office in London, said he has made verbal agreements on GBP50 million, or about $66 million at exchange rates on Monday, in sales in the three days following the vote -- more than his total since the beginning of the year.

"One person bought without even seeing the property and another, who hasn't seen it either, is about to sign," said Mr. Adams, adding that all five people in his office worked all weekend.

Still, "buyers will expect a seriously good deal," said Roarie Scarisbrick, partner at London buying agent Property Vision. "A few of our clients have asked us to put a hold on the search until they know what's going on, while an equal number have asked us to step it up while they monitor their currency advantage."

Multinational, consumer-focused firms are among those likely to go unscathed from a weaker U.K. currency. Unilever PLC and Reckitt Benckiser Group PLC both sell their wares mostly overseas, so won't see a big hit from the falling currency in their home market. Unilever shares ended Monday up 1.2% amid the carnage elsewhere.

Danone SA and Nestlé SA, both based in continental Europe, also moved higher, as investors rushed into safe-haven plays like food and drinks firms that do a lot of business outside Europe. RBC Capital Markets analyst James Edward Jones said the U.K. is a relatively small market for all of them, protecting them from currency exposure and the impact of any slowing growth in Britain or Europe. That is the same for the two big pharmaceutical companies based here, AstraZeneca PLC and GlaxoSmithKline PLC.

Liquor giant Diageo PLC should benefits from any sustained decline in sterling. All of its Scotch is made in Britain and most of it is sold elsewhere. Cigarettes are often one of the last discretionary-spending indulgences to go in a souring economy, providing a consistent revenue stream for tobacco companies like British American Tobacco PLC and Imperial Brands PLC.

Royal Dutch Shell PLC and BP PLC bucked the selloff, too. They aren't exposed to sterling or the euro, since they do most of their business in dollars. For the two, "what it comes down to is their revenues are largely USD based," said Jefferies analyst Jason Gammel.

The rapid depreciation of the pound against the dollar over the last two days also makes the companies' dividends look more affordable, attracting investors. "Right now if you're an investor that has to have exposure to U.K. markets you're moving into names with less perceived risk," Mr. Gammel said.

Write to Robert Wall at robert.wall@wsj.com, Saabira Chaudhuri at saabira.chaudhuri@wsj.com and Art Patnaude at art.patnaude@wsj.com

(END) Dow Jones Newswires

June 27, 2016 15:33 ET (19:33 GMT)

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