Ilika reopens Stereax battery facility at University of Southampton

Jamie Gordon
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Ilika reopens Stereax battery facility at University of Southampton
Innovator in solid-state battery technology, Ilika (AIM:IKA), announced on Tuesday that it would reopen its Stereax pilot line at the University of Southampton.

The company said that until the 15 June, it had closed the facility as part of its push to protect its staff and customers, and to observe the UK Government’s directives to avoid non-essential travel.

Following on from its prediction on the 9 June, the company announced on Tuesday that the Stereax pilot line facility for miniature cells would reopen shortly. It said that it was deploying similar measures at its Stereax facility to those at its Romsey-based HQ, which include risk assessment, ‘enhanced’ cleaning and hygiene procedures and social distancing.

Ilika stated that it would communicate with its customers regarding the measures it had put in place, and how these would impact on delivery times of evaluation samples. It continued, stating that it was pleased to announce that it had not received any order cancellations, and that its expectations for the FY21 remained unchanged.

The company’s HQ remained open during the lockdown period, for the employees who needed access to its Goliath large format cell development facilities. The group stated that it had not any potential COVID-19 related sickness since March.

Responding to the update, Ilika CEO Graeme Purdy commented,

“Our proactive approach to managing the operational risks posed by COVID-19 have been successful to date. We intend to remain vigilant to the risks and are working with our customers, partners and suppliers to ensure we implement our business strategy as effectively as possible. I would like to thank our staff, partners, advisors and shareholders for their continued support.”

Following the update, the company’s shares rallied 5.61% or 2.75p, to 51.75p per share 16/06/20 13:22 BST. This is up from the June nadir of 36.50p seen at the start of the month, and down from the 57.00p high on the 11 on June.  

Bidstack encourages big brands to look towards in-game advertising

Jamie Gordon
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Bidstack encourages big brands to look towards in-game advertising
Native in-game advertising platform Bidstack Group PLC (LON:BIDS) announced on Tuesday that it had been awarded the Internet Advertising Bureau’s Gold Standard Certificate 1.1. This award stands as a credit to the way Bidstack conducts its operations, and opens the company to the possibility of big brands calling on Bidstack services for in-game advertising. The IAB launched the Gold Standard Certificate in 2017 to improve standards in digital advertising, and is focused on rewarding companies which satisfy three tenets; reducing ad fraud, improving the digital advertising experience and increasing brand safety. The Gold Standard 1.1 is a more exacting accolade, created by IAB in 2019, its purpose was to commend the most noteworthy adherents to stricter and more prescriptive criteria. According to the IAB UK and PwC Digital Adspend study for 2019, the IAB Gold Standard certificate comprised 73% of the display advertising market in 2019. However, the more exclusive list that have been awarded the Gold Standard 1.1 certification include Amazon (NASDAQ:AMZN), Hearst, Twitter (NYSE:TWTR), DAZN, YouTube (NASDAQ:GOOGL) and Verizon Media (NYSE:VZ). In their statement on Tuesday, Bidstack were confident the award would give additional confidence to global advertising agencies to the new ‘native in-game’ digital advertising category.

Commenting on the news, company CEO, James Draper, stated:

“The IAB has […] confirmed that we are the first multi-device in-game advertising platform to be awarded the IAB Gold Standard certification.” “For many brands and agencies, being IAB Gold Standard certified is a prerequisite for inclusion in media planning. As advertisers look increasingly to new and emerging channels for inspiration and innovation, having the option of including fraud free and brand safe activations in AAA video game titles which can enhance the user experience is an enticing addition to their repertoire.” “The certification should further enhance demand side activity as, alongside giving users a better experience, it will give further confidence for brands and advertisers to continue to spend with Bidstack. I look forward to reporting further on our efforts in the months ahead.” Following the update, the company’s shares rallied 1.92% or 0.080p to 4.25p per share 16/06/20 12:11 BST. This is down from its 9.25p high for the calendar year thus far, seen on 06/04/20, but up from the 3.25p nadir on 18/03/20.  

Labour urges Sunak to deliver emergency budget

Bronte Carvalho
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Labour urges Sunak to deliver emergency budget
The Labour party has called for an emergency budget to be released this summer in anticipation of soaring unemployment levels once the government’s furlough scheme is fully terminated in October. Shadow Chancellor Anneliese Dodds has urged Rishi Sunak to deliver a “full budget” aimed at preventing unemployment, improving skills training and giving more substantial support to the unemployed. UK unemployment rates rose by 612,000 between March and May – the largest quarterly decrease in job vacancies since records began – as the economy struggled to offset the impact of the coronavirus pandemic lockdown measures. The Coronavirus Job Retention Scheme currently permits the government to pay 80% of wages for furloughed employees, but businesses are expected to start paying National Insurance and tax contributions for their staff as of August. Criticising the government’s plans to end its furlough scheme in October, Dodds stated: “To not have any linkage of the removal of these schemes to the removal of the lockdown […] will lead to additional waves of unemployment so that is an enormous concern”. “We’ve been slow to react as a country compared to other nations […] we saw a package from Germany two weeks ago. Unless we see action relatively soon in these areas then we will be reducing the confidence of many employers that they will be able to maintain their workforce into the future”. Dodds is not the only Labour MP to have raised concerns. On Sky News this morning, Shadow Work and Pensions Secretary Jonathan Reynolds commented, “We were too slow into lockdown, let’s not be too slow dealing with this mass unemployment crisis”. He continued in an article for Labour’s press journal, “The Government has been slow at every stage of this crisis – they cannot afford to be slow again in responding to this threat. There must be urgent action from the Govt to assist the hardest hit regions and specific support for sectors particularly exposed to the nature of the Covid crisis. It must prevent additional unemployment, support those who become unemployed and enable the creation of new jobs. This is why Labour is calling for a Back to Work Budget that has one focus – jobs, jobs, jobs”. In order to keep the economy afloat once the furlough scheme comes to an end, Dodds has suggested that the government offload some of the £100bn of capital spending it has pledged for over the next five years. “I have been suggesting to government that it should bring forward expenditure where it can […] in a way that can still be value for money”. Fiona Hyslop, Cabinet Secretary for Economy, Fair Work and Culture in the Scottish Parliament, added that the government should be considering putting in place a long-term approach to support businesses through the period of uncertainty that will inevitably arise beyond October. Hyslop is one among many who have raised concerns for the future of the UK economy, stating that businesses may be forced to reopen under unsafe conditions to make ends meet – and risk causing a second wave of coronavirus infections – or shut altogether. For this reason, the British economy appears in dire need of some additional measures come October to avoid skyrocketing job losses and company closures. Hyslop concluded, “The failure to do this will put the UK economy at a competitive disadvantage in recovering from this crisis and will result in hundreds of thousands of additional job losses”.

Greggs to reopen 800 stores for social distancing sausage rolls

Jamie Gordon
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Greggs to reopen 800 stores for social distancing sausage rolls
The UK’s largest bakery chain Greggs (LON:GRG) announced that on Thursday, it would be expanding the number of its site reopening for takeaway services to 800, alongside publishing the rest of its provisional plan of action. The company said that recent trials of gradual shop reopenings had been successful. Their trials included operational changes such as new work-wear, equipment and social distancing measures, which the company said would ensure the safety of its staff and customers as it continued with phased reopening.

Greggs continued by posting a bare-bones version of its reopening plan, which enclosed:

  • Trial of reopening a small number of outlets with new measures in place – Early May.
  • Larger scale reopening of selected shops with new procedures and equipment – Mid-June.
  • Opening of remaining outlets – Early July.

In response to the existing social distancing situation, the company’s outlook was more reserved. Its statement read:

“We are not able to predict the impact of social distancing on our ability to trade or on customer demand. However, our capacity to operate will be restricted by size of shop and we must anticipate that sales may be lower than normal for some time.”

“This will require us to maintain a proportion of our colleagues on furlough, either fully or partially, until sales levels begin returning to normal. In anticipation of lower sales, we have limited our initial product range to our best sellers and therefore a number of our manufacturing operational teams will remain furloughed until demand reaches a level that justifies the addition of remaining product lines.”

It added that across its 2,009 outlets, its staff would be trained in new safety and hygiene procedures, including; floor markings and signage, protective screens at counters, protective work-wear, more frequent cleaning, hand sanitiser availability and encouragement of contactless card payments.

Strategically, the company said that it had suspended its shop opening programme (with the exception of legally binding arrangements), and in turn it would open 60 shops and close 50 during the full-year.

It continued, stating that it planned to accelerate the development of its delivery and click-and-collect transactions , and would continue to invest in its robotic frozen logistics facility in the North East.

Commenting on the update, Greggs Chief Executive Roger Whiteside OBE, commented,

“Looking forward, although great uncertainty remains, we are excited to be resuming our service for many customers this week. We are confident of our ability to adapt to market conditions in the short term while continuing to invest in the long-term growth of our business. I want to thank all of our 25,000 colleagues for their support in getting us to this point.”

Following the positive update, the company’s shares bounced by an impressive 6.65% or 109.92p to 1,761.92p per share 16/06/20 11:27 BST. The consensus target price for the stock, among brokers, sits at around 2,100p per share. The company’s p/e ratio is 18.15, its dividend yield stands at 1.88%.

Ashtead shares jump 12pc, despite fall in profits

Safiya Bashir
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Ashtead shares jump 12pc, despite fall in profits
Shares in Ashtead spiked 12% on Tuesday morning as the construction equipment rental group announced plans to maintain its dividend to shareholders. Despite being hit by the Coronavirus pandemic and profits for the previous quarter being halved, the group said results proved a “resilient” performance at a time when construction activity was halted. Pre-tax profit in the three months to 30 April fell by 52% to £98mn. In the full year to 30 April, pre-tax profit was down 7% to £983mn. Ashstead has said that shareholders will receive the proposed final dividend of 33.5p that was agreed on a year ago. The total payout for the full year is 40.65p, up 1.6%. Brendan Horgan, the groups chief executive, said in a statement: “Looking forward, we believe that the impact of the COVID-19 pandemic will continue to give rise to market uncertainties over the coming months.” “However, with strong market positions in all our markets, supported by good quality fleets and a strong financial position, we believe that we are well-positioned to respond to this market uncertainty and continue to support our customers and team members.” Head of markets at Interactive Investor, Richard Hunter, has said that “Ashtead has so far seen off most of the pandemic challenges with aplomb.” “Given the company’s exposure to the US in particular, the fragility of the construction market is of some concern not only in the present but potentially further out as the speed and the breadth of easing restrictions come through at an uneven pace.” Shares in the group (LON: AHT) are trading 9.43% higher at 2,645.00 (1203GMT).

BP to slash $17.5 billion off oil and gas assets

Bronte Carvalho
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3
BP to slash $17.5 billion off oil and gas assets
BP plc (LON:BP) is to slash $17.5 billion off the value of its oil and gas assets following grim projections of the impact of the coronavirus pandemic on global oil demand. Just last week, the company announced plans to cut up to 10,000 jobs by the end of the year, representing nearly 15% of its global workforce. In the wake of a historic few months in the oil industry – with the market trading negatively for the first time on record during April – BP has been forced to cut price forecasts by around 30% and is expecting Brent crude to average at about $55 per barrel until 2050, dropping from $70 this time last year. Responding to the news, BP has suggested that it may have to leave some of its oil and gas discoveries in the ground if demand does not recover to previous levels. The company also plans to review future projects in light of a “growing expectation” that the coronavirus pandemic will “accelerate the pace of transition to a lower carbon economy and energy system”. Chief executive Bernard Looney described the company’s plans to “reinvent itself” into a “leaner, faster-moving and lower carbon company” as it emerges from the crisis, citing plans to reduce operating costs – currently standing at $22 billion a year – by $2.5 billion in 2021. Reflecting on the impact of the coronavirus pandemic in a note to employees, Looney said: “The oil price has plunged well below the level we need to turn a profit. We are spending much, much more than we make – I am talking millions of dollars, every day. And as a result, our net debt rose by $6 billion in the first quarter”. Looney concluded that the company is working towards “greater efforts to ‘build back better’ towards a Paris-consistent world”. BP’s plans to streamline their system are part of a wider scheme to achieve net zero ambitions by 2050. In February, BP chairman Helge Lund commented on the company’s long-term goal: “Aiming for net zero is not only the right thing for BP, it is the right thing for our shareholders and for society more broadly. As we embark on this ambitious agenda, we will maintain a strong focus on safe, reliable and efficient operations and on delivering the promises we have made to our investors”.

Investor Insight

BP’s share price has risen a modest 2.03% or 6.40 GBX to 322.45, as of BST 11:30 16/06/20. The company’s dividend yield stands at 0.10%.

Cineworld shares rally as it announces social distancing cinema from July 10

Jamie Gordon
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2
Cineworld shares rally as it announces social distancing cinema from July 10
The world’s second largest cinema chain Cineworld (LON:CINE) saw its share price bounce over 4% on Tuesday, as it announced its anticipated reopening dates for cinemas across its international operations. The company said that with big box office candidates such as Mulan and Tenet being confirmed for release in the coming weeks, it was pleased to confirm plans to reopen some cinemas during the last week of June and all sites by the end of July.

Cineworld, which runs 790 sites across 11 countries, stated that it had, “made several operational changes and invested in new technology to ensure a safe but enjoyable cinematic experience for all our visitors.” It reiterated that its main priority remained the health and well-being of its customers and colleagues.

Among other changes, the company stated that; its new booking system would ensure social distancing throughout its auditoriums; its new film schedules would help to manage queues and traffic within and around its premises; and ‘enhanced’ cleanliness and sanitation procedures would be implemented across its sites.

The company then provided following – though notably provisional – list of anticipated reopening dates for its operations across different territories:

· Unites States: July 10th

· United Kingdom: July 10th

· Poland: July 3rd

· Czech Republic: June 26th

· Slovakia: June 26th

· Israel: July 9th

· Bulgaria: July 3rd

· Hungary and Romania: TBC (anticipated for week of July 3rd)

Responding to the news, ineworld CEO Mooky Greidinger commented: “[We] are thrilled to be back and encouraged by recent surveys that show that many people have missed going to the movie theatre. With a strong slate confirmed for the coming weeks, including among others Tenet, Mulan, A Quiet Place Part II, Wonder Women 1984, Black Widow, Bond, Soul, Top Gun Maverick and many more, the entire Cineworld team remains committed to being ‘the best place to watch a movie’ “. Following the update, the company’s shares rallied by an impressive 4.61% or 3.64p, to 82.58p per share 16/06/20 11:19 BST. The company’s p/e ratio is 4.66, while its dividend yield stands at a generous 11.24%.

Restaurant chains predict mass redundancies without government support

Jamie Gordon
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Restaurant chains predict mass redundancies without government support
An open letter backed by 90 firms was sent to PM Boris Johnson, stating that if social distancing remains in place, they will need support in the form of tax, rent and other rebates, to avoid mass closures and job losses. The letter was organised by Deliveroo, and was signed by partner restaurants Itsu and Pret A Manger, as well as Wagamama and Pizza Hut (NYSE:YUM). The companies run more than a thousand outlets across the UK between them, and stated that without additional support, the sector faces ‘grave damage’. The letter reads: “Without government support to help restaurants to generate revenue and cover costs, tens of thousands of restaurants may be forced to permanently close their doors in the coming months.” “This crisis is far from over and the potential consequences are deeply concerning. A huge number of restaurants across the country are facing the prospect of bankruptcy.” The companies are calling for cuts to VAT on restaurant food, as well as the continuation of the Job Retention Scheme for restaurants while social distancing measures remain in place. In addition, the companies are requesting mortgage holidays for landlords, so that this can be passed on in the form of lower rents for business outlets.

Government response

Responding to the letter, a government spokesperson commented: “We are working closely with the hospitality sector to develop safe ways for restaurants, bars and cafes to reopen as soon as we can from July.” “These businesses can continue to access our extensive package of support, including our job retention scheme which has been extended until October – meaning it will have been open for eight months and will continue to support businesses as the economy reopens and people return to work.” The spokesperson also added that these measures were in addition to the 100% business rate holidays, loan and tax deferrals. Further, the government has commissioned a review into the two metre social distance guidance – due in ‘the coming weeks’ – which the PM’s spokesperson said on Monday would, “look at evidence around transmission of the virus in different environments, incidence rates and international comparisons”. In essence – ‘you’ve had your lot’. The companies run outlets across the UK, which are likely to reopen at different times due to disparities in regional policy. Restaurants and cafes will reopen from 3 July in Northern Ireland and the day after in England, while neither Wales nor Scotland have stated dates yet.  

UK unemployment: 612,000 dropped from UK payrolls amid Covid crisis

Safiya Bashir
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UK unemployment: 612,000 dropped from UK payrolls amid Covid crisis
The number of people on UK payrolls has dropped by 612,000 between March-May. The Office for National Statistics and HM Revenue and Customs have released new figures showing a record low in job vacancies and the extent to which the Coronavirus pandemic has hit the economy. Between March and May, there were 342,000 job vacancies fewer than the previous quarter – this represents the largest quarterly decrease in job vacancies since records began. The number of those who have become unemployed since the lockdown has been kept lower due to the government’s furlough scheme, which has sustained employment. Samuel Tombs, from Pantheon Macroeconomics’ said that whilst the furlough scheme has “succeeded in preventing massive job losses so far,” it is unsure what will happen for unemployment when the scheme ends and that rates were being held in “suspended animation”. He warned that “a second wave of redundancies remains likely when financial support for employers who furloughed workers is wound down between August and October”. Tej Parikh, chief economist at the Institute of Directors, also believes the economy and unemployment figures could take a greater hit in October. “Wage support has given firms some much-needed time to regroup,” he continued. “Despite these efforts, activity will inevitably be below normal for some time as social distancing continues, and employment looks set to take a hefty hit. Salaries and vacancies are also likely to keep falling as businesses aim to keep costs down,” he said. “As many as a quarter of firms have said they will struggle to pay anything toward furloughed workers’ pay come August. More bad news could be just round the corner, as redundancy consultation periods kick in.” Economists expect to see the unemployment rate reach 4.7% following the end of the furlough scheme. Those claiming Universal Credit or Jobseekers Allowance since March has more than doubled to 2.8mn.    

Should retailers celebrate a busy high street post lockdown?

Jamie Gordon
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Should retailers celebrate a busy high street post lockdown?
With many employees returning from furlough, and with shops opening for the first time in months on Monday, questions are being asked about the ability of high street retailers to pick up steam as lockdown restrictions are loosened. Offering diverging accounts of the situation for companies post-quarantine were Fortnum and Mason CEO Ewan Venters, and owner of stationary company Ryman, Theo Paphitis. While they agree that a return to ‘normality’ was desirable for both companies and consumers, their visions for the coming months were greatly at odds. On the one hand, Mr Paphitis lamented the struggles faced by high street retailers in light of the expansion of online shopping and deliveries in recent years. He stated that lockdown had – understandably – put already challenged businesses into an even more difficult spot, and that to make the high street competitive with their online counterparts, the government should either continue their business rates waiver or scrap business rates altogether, on a permanent basis. With this stance in mind, we can imagine the situation looks pretty bleak for face-to-face shopping outlets, as lockdown has not only seen companies such as Amazon (NASDAQ:AMZN) and Ocado (LON:OCDO) expand their delivery capabilities to meet expanded demand, but has seen many previously sceptical shoppers rely on online retail opportunities for the first time – many of whom will likely seek out the convenience and cost-effectiveness of shopping online in future. In contrast, Mr Venters was highly optimistic about shops reopening. While fresh produce and supermarket sales are expected to be steady, the main area of concern for many would be the willingness of consumers to resume their regular social habits, by visiting pubs, bars and restaurants. In response to this, Mr Venters was very positive. He stated that Fortnum and Mason had seen strong demand for its cafe offerings, with a backlog of bookings, following the recent reopening of the company’s popular afternoon tea reservations. Venters was not surprised by this fact, and instead stated that we should expect such activity going forwards. As people gain confidence and as more eating and drinking establishments reopen, he says we can anticipate healthy trading towards the latter end of the summer, as people release their pent-up desire to reconnect with their families and friends, by going for dinner or for drinks. The optimistic outlook seems more on-the-money so far, as shoppers took to the streets and queued down the roads frantically on Monday, to access high street retailers such as Primark (LON:ABF) and Sports Direct (LON:FRAS). If this post-lockdown trading activity becomes the norm – and people cluster in shopping and recreational outlets – then it’s safe to assume that consumers will find it difficult to observe social distancing. Going forwards, this presents the very real dilemma of a Coronavirus second wave sooner rather than later. We may be keen to return to our usual service, however our desperation to do so will likely see us back in quarantine before winter. A second lockdown in quick succession may be too much for many high street retailers to survive, and in terms of financial support, we’ll likely learn the hard way that the government’s pockets aren’t bottomless. While the message from many may be ‘go out and support local businesses’, perhaps the best thing we can do is support in moderation. An over-zealous return to normal life could be the death knell for many small businesses.  
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