Tuesday update

Daily Business Live: M&B pubs; Next; Centrica; China rebounds

10pm: US close

US stocks closed sharply higher as investors grew more optimistic regarding the Covid-19 pandemic.

The Dow Jones Industrial Average was up 2.39%, while the S&P 500 was 3.06% firmer and the Nasdaq Composite saw out the session 3.95% stronger.

Sentiment was boosted after Donald Trump said on Monday that growth in new Covid-19 cases had stabilised and the measures taken to tackle it were working.

New York governor Andrew Cuomo also said it appeared the worst was over for the state.

6.30pm: Fashion failing

Women’s fashion retailers Oasis and Warehouse are expected to appoint administrators, putting 2,300 jobs at risk.

The owner of the High Street brands, Icelandic bank Kaupthing, had been in talks to sell the businesses before the coronavirus crisis.

4.45pm: London market

London investors were unsettled by forecasts of a sharp slump in GDP. The FTSE 100 closed at 51.35 points lower (0.88%) at 5,791.31.

2pm: Economy warning

Co-ordinated global action will be needed to rebuild confidence, according to Rain Newton-Smith, CBI chief economist, following a prediction that the UK economy could shrink by 35% by June.

Full story here

10am: National Express divi

Coach operator National Express withdrew its final dividend and said that two of its employees had died as a result of the Covid-19 pandemic.

9am: Next pulls online sales

The Next website has had to stop taking orders after it reopened in a limited way following a three-week break.

The retailer said demand exceeded capacity by about 8:30am and the site will be closed until Wednesday.

9am: Markets – London opens lower

London failed to follow the uplift in Asian markets following better than expected news from China (see below). The FTSE 100 was trading at 5,813.27 −29.39 (0.50%) as traders had one eye on Wall Street, where the Dow Jones Industrial Average ended Monday down almost 400 points ahead of a difficult first-quarter earnings season.

7am: Mitchells & Butlers

sheep Heid

Pub chain Mitchells & Butlers said it is in “good shape to address the challenge we now face.”

All sites have been closed for over three weeks, and a number of actions have been taken to reduce our cost base. Over 99% of employees have been put on furlough, with basic pay for all employees including the board reduced to between 60% and 80%, depending on seniority.

Operating costs have been reduced to the minimum required to keep the estate secure, safe and in good condition.

Discretionary capital expenditure projects have been stopped.

“It is possible that the forced closure of our sites, as required by the Government, could amount to a technical breach of our secured financing arrangements but, as a first step, we are announcing today that a temporary waiver until 15 May has now been granted to avoid this pending further discussions.”

Great uncertainty remains not only as to the extent of the current shutdown but also the profile of any reopening and recovery period back to normality. In light of this the group is in close contact with stakeholders, with whom it has strong relationships and who are supportive of the long-term fundamentals of the business. 

“The group has material cash resources which we believe should be sufficient to fund obligations well into the second half of the year.”

Centrica appoints CEO

British Gas

Centrica, parent group of British and Scottish Gas, has confirmed Chris O’Shea as group chief executive on a base salary of £775,000 and a reduction from 15% to 10% pension contribution.

In recognition of the current crisis, he has already taken a voluntary reduction in salary of £100,000. This reduction will continue until the company resumes normal operations.

Mr O’Shea was appointed to the Centrica board as group chief financial officer on 1 November 2018 and became interim CEO from 17 March 2020.

The company has started a search for a CFO.


Following talks with Usdaw, the trade union, Next will re-open its online business “in a very limited way” from today. Initially only categories that customers most need will be offered, such as childrenswear and selected small home items.  Other product ranges may be added at a later date.

Operations will start with support from staff who are “willing and able” to safely return to work.  It will begin selling in low volumes, so that it requires a small number of employees in each warehouse at any one time, helping to ensure compliance with social distancing.

To achieve these limited volumes, Next will only allow customers to order the number of items that it believes can be picked safely on any given day.  At that point it will then stop taking orders and convert the website to ‘browse only’ until the following morning. 

DeepMatter deal

Glasgow-based DeepMatter, the AIM-quoted company focusing on digitising chemistry, has signed a contract with the Cancer Research UK Beatson Institute and Cancer Research Technology (the commercialisation and development arm of Cancer Research UK) for its DigitalGlassware platform.

Moss Bros delay

Moss Bros Group, the formalwear company, announces that, in accordance with the temporary relief measures issued by the Financial Conduct Authority and Financial Reporting Council it will be deferring the publication of its Full Year Results for the year ending 25 January 2020 from late May 2020 (as previously announced) until late July 2020.

6am: Asia higher

BYD China face mask factory

Asian markets posted gains on Tuesday as better than expected Chinese trade data suggested a rebound from the economic devastation wrought by the coronavirus pandemic.

China has largely brought the disease under control within its borders since the COVID-19 outbreak first emerged in the city of Wuhan late last year.

Most of the country has returned to work and travel restrictions have been eased

Exports in China fell 6.6% and imports dropped 0.9% in March on a yearly basis, according to customs figures – well below the 10% or more forecast by a Bloomberg survey of economists.

Hong Kong’s Hang Seng rose 0.6%, while Japan’s Nikkei gained 2.2%.

Wall Street indexes ended mixed on Monday with the Dow and S&P 500 falling while a 6.2% gain in Amazon shares helped the Nasdaq end higher.

UK Chancellor Rishi Sunak warned that the British economy could shrink by up to 30% this quarter due to the coronavirus lockdown.

5.30am Oil prices subdued

In a sign of worries about struggling global demand, oil prices were subdued in reaction to a global deal to cut output by a record amount of nearly 10% of world supply. US crude was up just 27 cents at $22.68, well below its January peak of $63.27.

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