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Monday Update

Daily Business Live: Pound falls; Debenhams; car sales; Petrofac

10.30pm: US market up

The Dow Jones Industrial Average was up by 7.73% while the S&P 500 rose by 7.03%. The Nasdaq 100 also had a big day, pushing above the 8,000 marker as prices in all three indices crafted fresh three-week-highs.

Investors were buoyed by hope that the coronavirus in New York City has started to see some evidence of new cases levelling out.  

9.30pm: Sterling and Johnson

The pound fell sharply against the dollar and euro this evening after Prime Minister Boris Johnson was admitted to intensive care.

4.45pm: Markets

The FTSE enjoyed a buoyant session on the back of encouraging reports on the coronavirus. The index closed at 5,582.39 +166.89 (3.08%)

3pm: Shadow Cabinet

Sir Keir Starmer announced further appointments to his Shadow Cabinet, including the Shadow Scotland Secretary

Full story here

10.30am: Debenhams

Debenhams store Edinburgh

Department store chain Debenhams is to appoint administrators as it moves to shield itself from creditors.

The move puts the jobs of 22,000 workers at risk.

In a statement, the company said: “This move will protect Debenhams from the threat of legal action that could have the effect of pushing the business into liquidation while its 142 UK stores remain closed in line with the government’s current advice regarding the Covid-19 pandemic.

“The group is making preparations to resume trading its stores once government restrictions are lifted.|”

Debenhams said it has the support of its lenders to enter administration and is engaging with employees and suppliers. 

10.05am: Car registrations

Vardy Dundee Car Store

The new car market fell 44.4% in March as dealers closed showrooms in response to government advice on COVID-19.

The month saw 203,370 fewer cars registered than in March 2019, according to figures from the SMMT.

In total, 254,684 new cars were registered in the month, with demand from private buyers and larger fleets falling by -40.4% and -47.4% respectively.

Registrations of battery electric vehicles (BEVs) rose almost three-fold in the month to 11,694 units, accounting for 4.6% of the market, while plug-in hybrids (PHEVs) grew 38.0%. Uptake of hybrid electric vehicles (HEVs), however, fell -7.1%.

Mike Hawes, SMMT chief executive, said, “With the country locked down in crisis mode for a large part of March, this decline will come as no surprise.

“I could have been worse had the significant advanced orders placed for the new 20 plate not been delivered in the early part of the month.”

10am: Oil price

Oil prices slipped after Saudi Arabia and Russia delayed a meeting to discuss output cuts that could help reduce global oversupply.

At 0814 GMT, Brent was down $1.10, or 3.2%, at $33.01 a barrel. US crude was 84 cents, or 3%, lower at $27.50 a barrel, off a session low of $25.28.

The Organisation of the Petroleum Exporting Countries and its allies will meet on Thursday instead of today to discuss cutting production.

9.30am: Markets

The FTSE 100 opened strongly on reports that Covid-19 cases are stabilising. The index rose by 175 points before paring gains. It is now trading at 5,503.90 +88.40 (1.63%).

7.20am: AG Barr

The Irn-Bru producer will announce final results on Wednesday, 8 April.

The results are being announced later in line with a request made to listed companies by the Financial Conduct Authority for a two week moratorium.

7.20am: Record publisher cuts pay

Record and Express

All employees and directors will take a pay cut as the company copes with the downturn caused by the coronavirus.

Full story here

7.15am: Petrofac

The oil services company has cut 20% of its employees and furloughed others while the salaries of directors and most employees of the oil services group have been cut by between 10-15%.

It has reduced non-staff overhead costs by up to 25%.

These measures are expected to reduce overhead and project support costs by at least $100m in 2020 and by up to US$200 million in 2021.

Capital expenditure is being cut by 40% ($60 million) in 2020 and the board is axeing its proposed final dividend of 25.3 US cents ($85 million). 

7.20am: Restaurant Group

Andy Hornby

Former HBOS chief Andy Hornby, now CEO of the Wagamama chain, has volunteered to take a 40% pay cut, which reflects the core policy for senior members of the TRG team who are not being furloughed.

Kirk Davis, CFO, volunteered a 20% pay cut. These arrangements will be reviewed again on 1 July.

Both executive directors have also volunteered to forego their bonuses for the 2019 financial year, which were due to be paid on 31 March.   The CEO was due to receive 37.5% of his salary (prorated to reflect his joining date of August 1st 2019) and the CFO was due to receive 30% of salary, which equates to £98,000 for the CEO and £109,000 for the CFO.

The non-executive directors have also reduced their fees with effect from 1 April by 40%. The number of non-executives will be cut from six to five with Mike Tye stepping down from today.

7am: Babcock International

Queen Elizabeth aircraft carrier

Covid-19 had a small impact on trading in the final quarter. While the vast majority of our services continue, some areas of the business are running at reduced levels, including short cycle work and some training and transportation activities. Where services continue, priority is being given to critical programmes.

The company said the impact of COVID-19 for the next financial year is uncertain and it continues to model a range of scenarios and stress tests as circumstances evolve.

“We are taking actions to mitigate the financial impact of COVID-19 including reducing and deferring non-essential operating and capital expenditure where possible, without impacting customer delivery.

“We will consider the use of government programmes to help manage areas of inactivity where they exist and we have postponed the annual pay increase for the senior management team.”

The board will consider the final ordinary dividend for this financial year ahead of the full year results announcement taking into account developments over the next two months.

7am: WH Smith

The stationer said it notes recent press comment regarding the possibility of the group undertaking an equity issue in the light of a “substantial downturn” in economic activity resulting from the Covid-19 pandemic.

The group has secured new lending facilities of £120m, which will strengthen its balance sheet, working capital and liquidity position.  This is conditional on raising new equity.  

As a result, the group is in an advanced stage of preparation for an equity issue of a maximum of 13.7% of its issued share capital by way of a placing.

These financing arrangements, coupled with a broad range of mitigating actions to manage the cost base and cash-flow, will provide sufficient liquidity to deal with this most challenging of trading environments.

A further announcement will be made as and when appropriate.

7am: Rolls-Royce

Working with the Manufacturing Technology Centre in the UK, expert medical consultant practitioners and supported by Innovate UK, the company has prototyped, developed and put into operation within just one week, a fast-make intubation shield for use with ventilators for treating coronavirus sufferers.

Its R2 Data Labs team has assembled an alliance of leading companies across commerce, banking, travel, technology and research to use data analytics to find new and practical ways to support the global response to the virus.

With many children around the world now unable to attend school, the company has created STEM (science, technology, engineering and maths) materials “to give them something inspiring and educational to do at home”.

The company said its balance sheet is robust but it is no longer recommending a final shareholder payment of 7.1 pence per share in respect of 2019, equivalent to a further £137 million.

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