Daily Business Live: Lord Gordon dies; RBS; iomart deals
10pm: US market slumps
Wall Street’s main indexes fell more than 1.5% as the 113-month sgtreak of positivejob gains came to an abrupt halt amid of a deep economic slowdown.
The Dow Jones Industrial Average fell 360.91 points, or 1.69%,, the S&P 500 lost 38.25 points, or 1.51% and the Nasdaq Composite dropped 114.23 points, or 1.53%.
6.30pm: US jobs
A decade of employment growth in the US hit the buffers in March as employers shed 701,000 jobs.
The unemployment rate rose to 4.4% in the biggest one-month jump since 1975, according to new data from the US Department of Labor.
The abruptly ends the 113-month streak of positive gains. Not only has the number of unemployed risen sharply, but so has the number of those that report being underemployed. The US measure of unemployment and underemployment rose from 7% to 8.7%.
Ulas Akincilar, head of trading at the online platform, Infinox, said: “Worse is yet to come. By the Bureau of Labor Statistics’ own admission, this data doesn’t capture the full picture as it was collected before many US states entered lockdown.
“Separate data shows that in the second half of March, nearly 10 million Americans filed for unemployment benefits for the first time.
“Those numbers will be included in May’s jobs report, which on this evidence could enter Depression-era territory.
“With the Congressional Budget Office predicting that unemployment could surge past 10% in the second quarter of the year, the US labour market has gone very wrong, very quickly.”
The FTSE 100 slid further, closing the day at 5,415.50 −64.72 (1.18%).
4pm: RBS AGM
The RBS AGM will go ahead on 29 April in Edinburgh, but shareholders will not be able to attend in person. They will be able to vote online or by post in advance and results will be announced by RNS as usual.
A quorum of five employee shareholders will meet at the conference centre in Edinburgh. This will not include our chief executive office or chairman.
Following this, the bank will communicate the results of the AGM and hold a special virtual event to give shareholders an opportunity to hear from CEO Alison Rose and chairman Howard Davies, and also to give them an opportunity to ask questions.
12.45pm: No basis in virus peak claims
Nicola Sturgeon says nothing she has seen gives her the basis for predicting the virus will peak in a week’s time, despite claims in some media.
Chief Medical Officer, Catherine Calderwood, adds: “Now is not the time to think this will all be over soon.”
12.30pm: Death toll rises
There were a further 46 deaths from coronavirus in Scotland, taking the total to 172.
10am: Lord Gordon dies
Labour peer and commercial radio pioneer James Gordon, Lord Gordon of Strathblane, has died of coronavirus, aged 83.
The founder of Radio Clyde passed away at Glasgow Royal Infirmary on Tuesday. He was political editor of STV between 1965 to 1973 and a past chairman of VisitScotland.
He contested the seat of East Renfrewshire for Labour in the 1964 general election and was elevated to a life peerage by the party in 1997 as Baron Gordon of Strathblane.
In the 1984 birthday honours, he was appointed a Commander of the Order of the British Empire (CBE) and received a Sony Award for his services to radio.
Radio Clyde News tweeted: “Everyone at Radio Clyde is very sad to report the death of our founder, Lord Gordon of Strathblane.”
ITV has cancelled the 2020 annual bonus for executive directors and management as it seeks to manage its cash flow.
The FTSE 100 broadcaster also said its executive directors will take a voluntary 20% cut to their base salaries for the duration of the UK government’s lockdown of the country.
It has already announced a recruitment and salary freeze across the company.
9am: Corona beer suspended
The brewer of Corona beer has suspended production because of the coronavirus pandemic.
The brand of lager – whose name has provoked some leg-pulling during the health crisis – will not be produced following a ruling on essential products by the Mexican government.
As forecast the FTSE 100 has opened lower at 5,423.13 −57.09 (1.04%)
7.20am: Standard Life Aberdeen dividend and AGM
Shareholders received some good news as the board committed to paying its final dividend.
Shareholders will not be able to attend the AGM on 12 May and are encouraged to vote electronically, or to appoint the chairman as their proxy with their voting instructions.
Taking account of the Government support confirmed, the company does not expect the regional bus business to earn a profit for the time being and for the weeks ahead.
All Megabus services in England and Wales will be suspended.
“Subject to our comments on the challenges of forecasting at this time, we currently expect regional bus to operate at break-even or at a modest operating loss for the time being.”
7.20am: BAE Systems
The board is deferring the decision on the 13.8 pence per share dividend. An update on the dividend payment will be provided at the Half Year results on 30 July when the board will also review remuneration of the executive directors.
The AGM will be held on 7 May as scheduled but shareholders will not be able to attend the meeting in person. Shareholders will still be able to vote by proxy using the usual online and postal facilities.
The proposed acquisitions of the Collins Aerospace Military Global Positioning System business and Raytheon’s Airborne Tactical Radios business are still expected to complete in the coming months. As previously announced, appropriate financing is already in place to enable completion.
The cloud provider unveiled two small acquisitions: the managed private cloud division of privately owned ServerChoice for an initial £2.1 million, with a further maximum consideration of £900,000. It also purchased Memset for an initial £3.3m, with a further maximum consideration of £0.9 million. Memset provides dedicated and virtualised private cloud infrastructure to around 2,000 customers.
The board expects to deliver another year of revenue growth, strong profitability and cash generation, in line with expectations. Due to the timing of the year end, the group has experienced minimal impact on trading in the year from the effects of COVID-19.
It expects revenue of c.£112 million (FY19: £103.7m), adjusted EBITDA of about £43m (FY19: £42.2m) and adjusted profit before tax of £22.5m (FY19: £25.5m).
Angus MacSween, CEO, pictured above, said: “While we may potentially see an impact on our customer base and trading in the coming months, overall the Group benefits from high levels of recurring revenue, strong levels of cash generation, a strong balance sheet and a wide and large customer base.”
7.20am: Smart Metering Systems
The Scottish company is delaying its AGM until the second half of June, with the precise date to be announced in due course.
Instead of a final dividend it will pay a second interim cash dividend to shareholders of 4.58p per share. Accordingly, the total dividends remain unchanged at 6.88p per share. The second interim dividend will be paid on 4 June.
7.15am: Ryanair traffic and forecasts
Ryanair saw traffic in March fall by 48% from 10.9m in 2019 to 5.7m in 2020. This caused full-year traffic to rise just 4% to 149m, compared to the 154m figure that Ryanair was on track to achieve, even as late as early March.
The Irish airline is currently operating less than 20 daily flights, 99% fewer than its pre-Covid 19 daily schedule of more than 2,500 flights. The company expects its fleet to remain largely grounded for at least April and May.
It is expecting pre-exceptional annual profit after tax of between €950m and €1 billion, which is at the lower end of its previously announced guidance range.
It currently estimates an exceptional charge of approximately €300m.
Ryanair has one of the strongest balance sheets in the industry, with year-end cash equivalents of €3.8bn and 327 (77%) of the group’s owned fleet unencumbered and debt free.
It has already implemented a series of measures to cut operating costs, improve liquidity and cash flows. It is engaging with staff and unions across all EU countries to agree payroll support mechanisms as they are put in place by EU Governments.
It backs the EU Commission’s position that any Government support must comply with all EU State Aid and Competition rules.
7.10am: Wood board hire
Nigel Mills will join energy services company Wood as a non-executive director on 1 May.
He is currently senior independent director of housebuilder Persimmon and, until the end of April, a senior adviser at Citigroup Global Markets. He was previously chairman of corporate broking at Citi between 2005-2015 and chief executive at Hoare Govett between 1995-2005.
7.05am: One Savings Bank
The board of OneSavings Bank has decided to cancel the payment of the final 2019 dividend in relation to ordinary shares, payable on 13 May.
It said the group remains highly liquid and well-capitalised.
Ahead of US jobs data the FTSE 100 is expected to open at around 5,433, down 47 points from last night’s close.
It fell on the news of a surge in US unemployment claims, but staged a late rally on hopes of an end to the oil price war to close at 5,480.22 +25.65 (0.47%).
The consensus estimate on US jobs is for 100,000 to have been lost.
Despite the grim outlook the Dow Jones industrial average finished 470 points higher at 21,413 and the S&P 500 climbed 56 points at 2,527.
6.45am: High Street sales
Unsurprisingly, Britain’s high streets have suffered their worst month on record, as the coronavirus lockdown wiped out sales.
Figures for March from the BDO high street sales tracker show that like-for-like sales fell by 17.9% for the month and instore sales plunged 34.1%.
Overnight: Oil price rises
The price of Brent crude surged 23% to $30.76 a barrel after US president Donald Trump tweeted that he expected Saudi Arabia and Russia, which have been locked in a bitter price war, to announce huge production cuts.