Government reveals plan to help businesses amid COVID-19

Dina Caruso
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Government reveals plan to help businesses amid COVID-19
The government revealed yesterday a plan to help safeguard the British economy from the evolving outbreak of COVID-19. As measures to contain the spread of the virus have been put in place, several businesses are being negatively hit. Indeed, many people are staying indoors during a time when they are being told to self-isolate to protect themselves from infection. This puts an enormous strain on businesses in areas such as hospitality, which rely on costumers to dine in their restaurants, bars and pubs. Elsewhere, the travel industry is feeling the bite of containment measures such as travel bans. On Tuesday, the British government announced a plan to help these businesses, including at least £330 billion in loans – equivalent to 15% of GDP. This allows any business to access a government backed loan or credit, Chancellor Rishi Sunak said. Chancellor Rishi Sunak also announced that, in the coming days, a support package specifically for airlines and airports will be discussed. “We must act like any wartime government and do whatever it takes to support our economy,” said Boris Johnson in a Tuesday afternoon press conference. The Chancellor also revealed the highlights of the plan in a thread of 11 tweets. I have selected a few to share: https://platform.twitter.com/widgets.js https://platform.twitter.com/widgets.js https://platform.twitter.com/widgets.js https://platform.twitter.com/widgets.js

BMW expects COVID-19 hit, shares down

Dina Caruso
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0
BMW expects COVID-19 hit, shares down
BMW Group (ETR:BMW) shares dropped on Wednesday after the company issued a statement concerning to the evolving COVID-19 outbreak. Shares in the German company were down by almost 6% during Wednesday morning trade. BMW said that the uncertainty surrounding the spread of COVID-19 makes it difficult to accurately forecast the group’s business performance for the 2020 financial year. As the virus continues to spread and containment measures begin to be implemented, BMW is expecting a negative impact on delivery volumes in all major markets across the 2020 year as a whole. Additionally, the group said that automotive segment deliveries to customers worldwide in 2020 will be significantly lower than the level from the year prior. EBIT margin of the automotive segment is expected to lie within a range of 2% to 4%, BMW added. The company continued to add that it expects group profit before tax to be “significantly lower” than in 2019. “Solidarity and responsible action are called for. In our society it is the duty of the strong to protect the weak. The BMW Group therefore fully supports the measures aimed at containing the spread of coronavirus,” the Chairman of the Board of Management of BMW, Oliver Zipse, said concerning the spread of COVID-19. Oliver Zipse continued: “We take our responsibility seriously, both when it comes to ensuring the protection and health of our employees and to achieving the best possible balance in terms of profitability. One thing is certain: coronavirus is here now, but there will also be a time after coronavirus. The approach we are taking clearly reflects the BMW Group’s ability to react quickly and flexibly.” “New technologies are key to the future of mobility. Up to 2025, we intend to invest more than 30 billion euros in research and development to underscore our position as an innovation leader. This also expresses our confidence for the future business development,” Oliver Zipse said. This week, the British government accelerated measures to respond to the outbreak of COVID-19. Shares in BMW AG (ETR:BMW) were down on Wednesday, trading at -6.44% as of 10:04 CET.

British Honey using spare capacity for sanitisers

Andrew Hore
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1
British Honey using spare capacity for sanitisers

Gin and spirits supplier British Honey Company (LON: BHC) has plenty of spare capacity in its distillery and production of alcohol sanitisers will use up some of that capacity in the short-term. Longer-term, the strategy is to buy other spirits brands.
There is a shortage of sanitisers due to the coronavirus and HMRC has given permission for British Honey to produce denatured alcohol. It should be able to start selling products later this week.
The sanitisers are made with 70% alcohol and extracts of honey and green tea.
British Honey joined Aquis Stock Exchange at the beginning of this week a...

Novacyt continues to provide opportunity in the face of uncertainty

UK Investor Magazine
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1
Novacyt continues to provide opportunity in the face of uncertainty
Shares in Novacyt (LON:NYCT) have continued to be a beacon of light for investors this week as the company announced an initial deal with Public Health England (PHE) for their COVID-19 testing kits. Novacyt said its Primerdesign business unit had received a £1 million order for their coronavirus testing kits from the UK government who will test the kits in eight hospitals over four weeks. The order from PHE order means Novacyt have received £3.7 million of orders for its testing kit, an amount it says usually represents eight months of it’s sales.

Novacyt shares

The AIM-listed pharmaceutical company starting making announcements about the development of their testing kits at the end of January, when shares were trading at just 20p. Shares have since rocketed and reached intraday highs above 215p, before falling back. However, shares have enjoyed renewed buying pressure this week sending shares back over 140p for a period.

Test, test, test

There is a consensus the wider testing of coronavirus is key to bringing the spread under control. “We have a simple message for all countries Test, test, test. Test every suspected case,” said Dr Tedros Adhanom Ghebreyesus, Director General of the World Health Organisation. He continued “if they test positive, isolate them and find out who they have been in contact with two days before they developed symptoms and test those people, too.” There have been two main problems with this thus far, firstly government were slow to increase the number of tests and the second, and most relevant to Novacyt, is the lack of available tests. It is impossible to make any forecasts of how many people will need to be tested globally or in the UK and with some officials predicting many multiples more have COVID-19 than current records, the potential demand is significant. While this has investors excited, some analysts are cautioning that Novacyt are not alone in the pursuit of testing kit development. “The race for the testing kits is far hotter than the vaccines at the moment, largely due to the testing time for a vaccine. I would, however, err on the side of caution as there are plenty of other companies in the race for testing kits but the recent news on Novacyt’s PHE deal is a big a positive, as is the WHO message of “test test test,” said John Woolfitt, Director of Trading at Atlantic Capital Markets.

Laura Ashley collapses as COVID-19 hits

Dina Caruso
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1
Laura Ashley collapses as COVID-19 hits
Laura Ashley Holdings plc (LON:ALY) shares crashed on Tuesday after the company announced that it has filed for administration. Shares crashed over 60% following the news. The British retailer said that the COVID-19 outbreak has had an “immediate and significant impact” on trading. As the virus continues to spread across the world, many businesses have been hit hard and have issued warnings concerning the situation. But for Laura Ashley, which was already struggling prior to the outbreak of the virus, the situation has been critical. During a time where people are being encouraged to stay indoors and self-isolate, footfall is bound to be lower on the high street. “For the seven weeks up to 13th March, trading for the Laura Ashley business improved by 24% year-on-year and the directors were encouraged by this strong performance. However, the COVID-19 outbreak has had an immediate and significant impact on trading, and ongoing developments indicate that this will be a sustained national situation,” Laura Ashley said. “Accordingly, the Company regrets to announce that the directors of the Company, and of the named subsidiaries, have today filed notices of intention to appoint Robert Lewis and Zelf Hussain as administrators. If administrators are appointed in respect of the Company, given the Group’s creditor position, the Company is not certain whether there would be any surplus assets available to shareholders of the Company,” the company continued. Elsewhere, the travel industry has been hit particularly hard by the COVID-19 outbreak as demand for travel has decreased and as countries, such as Italy, have been put on lockdown. Over in the UK, the British government has been accelerating measures to contain the spread of the virus. Shares in Laura Ashley Holdings plc (LON:ALY) were down on Tuesday, trading at -60.18% as of 11:15 GMT.

Three pharmaceutical shares trialing and developing coronavirus treatments

UK Investor Magazine
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2
Three pharmaceutical shares trialing and developing coronavirus treatments
Markets have been heavily hit by the coronavirus pandemic with equity indices trading like penny stocks and the some of largest companies in the world losing more than 50% of their value. Integral to the panic gripping stock markets is the lack of any vaccine of approved medicines to treat COVID-19. When a vaccine or effective coronavirus medicines are found, there will likely be a historic wave of relief through markets and shares in the company, or companies, responsible for the treatments will become much sought after. There are numerous companies researching and developing coronavirus treatments, both listed and unlisted, however, three are receiving a significant level of investor and press interest.

Roche

The first step to tackling COVID-19 is testing individuals and countries around the world were awfully unprepared. Roche (SWX:RO) began developing coronavirus testing in January inline with the FDA and tests are now available in labs across the US. Reflecting the urgency of the need for testing and efficiency of Roche, the coronavirus tests were produced and approved in record time.

Gilead Pharmaceuticals

As COVID-19 spread through China the only option was to trial existing medicines traditionally used for other illnesses. China tesed a wide range of medicines for infections and diseases such as malaria, SARS, HIV and inflammation. One of these drugs was Gilead’s (NASDAQ:GILD) antiviral Remdesivir. Remdesivir is emerging as a frontrunner in the treatment of coronavirus having originally been designed to target Ebola. There have been a number of claims Remdesivir produced positive results in patients in China and there are a number of trials ongoing in China, and recently the US.

Novacyt

Again focusing on the testing of coronavirus as the first step in treating the virus and controlling it’s spread, Novacyt (LON:NCYT) is supplying the UK healthcare system with testing kits. Initial orders from Public Health England amounted to £1 million to test in eight hospitals across the UK over a four week period. If successful, it is easy to picture Novacyt receive significantly more orders. The company is listed on London’s AIM with a market cap of just £97 million.

Gfinity fails to profit from esports boom

Andrew Hore
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0
Gfinity fails to profit from esports boom

Gfinity (LON:GFIN) should be prospering because of its exposure to the fast-growing esports sector, but it is a long way from being a success. Over ambition and a failure to run the business to generate cash have led to the departure of the chief executive. This has happened one week before the interim figures are set to be published.
Gfinity has already said that interim revenues will decline to £3.5m, but the loss will be slightly lower at £2.4m. Full year revenues of £7.45m were forecast, but this is not likely to be achieved. Two major events that were due to take place by the end of June ...

Halfords announce plans to close Cycle Republic stores

Ishen Patel
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0
Halfords announce plans to close Cycle Republic stores
Halfords Group plc (LON:HFD) have seen their shares plummet, as the firm told the market that they are planning to close their Cycle Republic chain of stores. The decision made by Halfords could put up to 226 jobs at risk, and reflects the tough trading environment combined with wider macroeconomic challenges that British High Street firms are facing. The firm also noted that it intends to shut 22 stores and performance centre site in Evesham in an attempt to streamline focus on its online cycling business, Tredz. The firm commented: ‘Performance Cycling is an important category for Halfords. We currently serve the enthusiast cycling market through Tredz, a predominantly online business, and through Cycle Republic, a commuter led, store and online offer. Going forward, we believe we will better serve this market by singularly focusing our investment and resources into the Tredz brand, which has both a differentiated and specialist customer proposition and a superior business model in this part of the cycling market. With investment in the Tredz business, alongside our core Halfords Retail cycling business, we believe we will be uniquely placed to serve both the enthusiast and the mainstream customer in a more economic way than we do today’. Halfords described their Cycle Republic business as one which was low returning and stock intensive – and the planned exit will allow investment and resources to drive into their motoring business. Notably, the Cycle Republic division reported a £4.3 million loss last year, and the loss expected this year is expected to be lower. Graham Stapleton, CEO said: “The Board has come to the difficult, but necessary, decision to propose the closure of Cycle Republic, our retail store-focussed performance cycling brand. This proposal is not a reflection of the hard work of our Cycle Republic colleagues, who I would like to thank for their commitment and passion in serving our customers. We are now moving into a period of consultation with impacted colleagues with a view to mitigating as many redundancies as possible. Going forward we propose to focus our investment and resources in Halfords and Tredz, through which we will deliver market-leading specialist propositions for both mainstream and enthusiast cyclists via a business model that improves our overall economics.”

Halfords see steady Christmas trading

In January, the firm told the market that its’ Christmas trading had seen positive growth. Halfords who work in the automobile and motoring sector reported an earnings rise in its third quoter which accounted for the festive trading period. Notably, the revenue earned from its Autocentres servicing unit grew over 30%. Retail saw a like-for-like improvement in the Cycling segment, by 5.9%, though in Motoring, like-for-like revenue was 2.7% lower than last year. Total revenue has shrunk 0.2% year on year, and has seen a slump of 1.2% on a like for like basis. For the full-year, Halfords maintained its guidance of underlying pretax profit, in the range of £50 million and £55 million. The measure is also on a pre-IFRS 16 basis, an accounting standard governing the financial treatment of leases. Shares in Halfords Group plc trade at 81p (-21.08%). 16/3/20 13:48BST.

Coca Cola European Partners anticipate coronavirus could hurt 2020 earnings

Ishen Patel
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0
Coca Cola European Partners anticipate coronavirus could hurt 2020 earnings
Coca Cola European partners PLC (LON:CCEP) have told the market that they are anticipating that the coronavirus could hurt their earnings forecast for 2020. The bottling subsidiary of Coca Cola said that they have already installed measures to limit the current outbreak of COVID-19, however the uncertainty with regards to the scale and time frame could change its’ guidance expectations and forecasts. The firm commented: “Since the balance sheet date, we have seen significant macro-economic uncertainty as a result of the coronavirus (COVID-19) outbreak. The scale and duration of this development remains uncertain. CCEP is well positioned given its current financial position, stable cash generation and good access to liquidity and has mitigation plans in place, which it continues to adapt as the situation evolves. The situation could however impact our full year 2020 earnings and cash flow, and therefore by implication our full year 2020 guidance, on which we will update you in due course.” Coca Cola also announced that the risks have been identified to all stakeholders in the firm, and the impact of the coronavirus will be fully assessed in due course.

Coca Cola European Partners see strong February update

In February, the multinational firm gave a confident update to shareholders. The drinks retailer and producer said that it expects single digit revenue growth in 2020, however performance in 2019 had been strong. Coca Cola reported that revenue had rose 4.5% to €12.02 billion in 2019, compared to the 2018 figure of €11.52 billion. The multinational said that this reflected solid execution and innovation led growth which will please shareholders. Notably, pretax profit also rose €1.45 billion from €1.21 billion, whilst operating profit also rose from €1.30 billion in 2018 to €1.55 billion. On a sweet note for shareholders, Coca Cola also declared a full year dividend of €1.24 per share, which shows a 17% appreciation from last year. Coca Cola across all business have looked to maintain its annualized dividend payout ratio of 50%. Coca-Cola also announced that they will be commencing a 2020 share buyback program of up to €1 billion, as the firm concluded its update. The drinks firm praised the strong performance in the British markets, as revenue grew by 2% in Coca-Cola Zero Sugar, Fanta & Monster drinks. French revenue also jumped 4.5%, and European performance was steady with strong consistent performance in the Netherlands. Shares in Coca Cola European Partners PLC trade at €37 (+1.01%). 16/3/20 13:12BST.

Oil prices continue to sink on coronavirus worries

Ishen Patel
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1
Oil prices continue to sink on coronavirus worries
The price of Crude Oil has slumped across the Monday session, as developments in the macroeconomic world unfolded across the weekend. US Crude fell below $30, as the US Federal Reserve decided to cut interests by 100 bps to 0.00% – 0.25% – and notably announced the planned purchasing of $700 billion’s worth of assets. The coronavirus has been infecting global markets for almost three months now, and the situation has vastly escalated. In January, it seemed that the Chinese Government had done a good job in containing the virus within Wuhan – where it originated. However, the situation was far from under control. At the start of this month, global health authorities had reported that the virus had reached Italy – and since them Western Europe has been plagued by the COVID-19 virus, with oil and commodity prices being equally affected. The price of oil has remained volatile, as has many global stocks and indices . The ongoing feud between Russia and OPEC+ has not added any solidarity for oil prices, as the two parties have locked heads on the best way to control the price of oil due to global slumps in demand. It was also reported that China’s factory output had sunk at the sharpest pace in 30 years amid coronavirus fears. Many global governments have now resorted to cutting interest rates and introducing fiscal stimulus’ to try and combat the ongoing bleakness caused by the coronavirus. Despite these injections, the situation is still looking as dark as ever. Oil price are expected to face some volatility over the next few weeks, as OPEC+ plan supply cuts whilst President Donald Trump has ordered Strategic Petroleum Reserves to be filled up. Exporters in Saudi Arabia have also not helped the problem for oil prices, as top suppliers have risen their output and slashed prices in order to try and increase trading – particularly within Asia and Europe. WTI Crude has seen a crash of nearly 6% to $29.94, whilst Brent Crude dipped 8.5% at $30.96 per barrel.
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