Thursday update

DB Live: easyJet restarts; Aviva Covid claims; Man Utd loss

10pm: Wall Street

Wall Street ended lower on Thursday, following recent two-month highs, as a fresh wave of China-U.S. tensions raised doubts about the trade deal reached earlier this year between the world’s two largest economies.

The Dow Jones Industrial Average fell 0.41% while the S&P 500 lost 0.78% and the Nasdaq Composite dropped 0.97%.

7pm: United suffer big loss

Manchester United slumped into the red in the first three months of the year as the coronavirus pandemic cost the club an estimated £23m in revenues.

The Premier League shutdown also caused the club to lose broadcasting income, while matchday takings and earnings from its Old Trafford megastore also slid.

The 19% slump in overall revenue to £123.7m contributed to a loss of £22.8m loss for the third quarter.

That compared to a profit of £7.7m for the same period a year ago

6pm: Bank rebellion

Rebellion against fat cat pay came back to haunt the banks today after more than a third of voting shareholders in Lloyds Bank opposed the pay packet for its chief executive.

Full story here

4.45pm: London close

The FTSE 100 having been in positive territory all afternoon, fell back in late trade to close at 6,015.25 −51.91 (0.86%) amid growing tensions between the US and China, and after Whitbread announced a £1bn rights issue.

12.40pm: Sturgeon announces lockdown measures

The first minister confirms that lockdown will be eased in four phases as per earlier reports.

The construction industry will be able to carefully implement key steps in its restart plan with a “genuine partnership” with trade unions.

Companies will be encouraged to adopt staggered start times and other flexible working, including four-day weeks.

Full story here

10am: Whitbread shares plummet

Premier Inn owner Whitbread’s share price nose-dived this morning after it announced a deeply discounted rights issue to raise £1bn. It is currently down 11% or 315p at 2525p.

Shareholders are being offered one new share at 1,500p for every two they already own. Before today’s announcement, these were trading at 2,843p.

Full story here

8.10am: London open

The FTSE 100 opened lower as new coronavirus cases spike as countries around the world take steps out of lockdown.

In the first minutes of trading it was down 43 points (0.7%) at 6,023.77.

Bucking the trend were airlines with Lufthansa up 7% on advanced talks over a €9 billion state bailout and EasyJet jumping 2.3% after indicating it would restart some flights in mid-June (see below). Jet2 owner Dart Group soared by 15.4% after it raised £174 million through a significantly oversubscribed share placing.

Wall Street traders were more positive last night. The Dow Jones rallied 369 points or 1.52% at the close. The S&P 500 gained 1.67% and the Nasdaq finished up 2.08%.

In Asia, Japan’s Nikkei was flat, whilst Hong Kong’s Hang Seng was 0.22% lower and the Shanghai Composite 0.13% lower.

7am: EasyJet resumes flights

Edinburgh airport Easyjet

EasyJet said it will restart services on 15 June with extra measures to reduce the risk of infection from Covid-19.

The budget airline said a small number of flights would resume on routes where there was enough demand to be profitable. The routes will mainly cover domestic flights in the UK and France.

Glasgow and Edinburgh connecting with London Gatwick will be among the first to restart.

The FTSE 100 company said it would announce further routes over the coming weeks as customer demand increases and lockdown measures are relaxed. EasyJet grounded its entire fleet of planes in March in response to the Covid-19 pandemic.

Measures introduced include:

· Customers, cabin and ground crew will be required to wear masks

· Enhanced cleaning and disinfection of easyJet aircraft

· Availability of disinfectant wipes and hand sanitiser onboard

· Initially, no onboard food service

7am: Whitbread raises £1bn

Premier Inn

Premier Inn owner Whitbread has announced a one-for-two rights issue to raise £1 billion to help offset expected outflows of £600m , including operating cash outflows of about £80m per month during the period of closure or low occupancy.

Full story here

Aviva expects £160m Covid claims

Insurance company Aviva estimates claims from business interruption of approximately £160 million, as a result of coronavirus.

It says the vast majority of its commercial policies do not cover business interruption claims arising from COVID-19.

“However, we anticipate potential areas of exposure in certain specialist schemes and broker programmes, and we have paid claims in the UK and Canada where coverage exists.

“In the UK, we will work constructively with the FCA to ensure we can establish an expedited process that will bring much needed certainty to customers and insurers.”

The company anticipates claims may arise from some other general insurance products, including travel, surety, construction, and other commercial lines and has made estimates for claims in these areas.

Aviva does not provide insurance for event cancellation or trade credit.

New business sales rose by 28% to £12.3 billion in the first quarter, helped by strong bulk annuity sales.

Enquest ‘responding well’

The oil explorer’s chief executive, Amjad Bseisu, said: “EnQuest has responded well to the challenges of COVID-19 and the downturn in oil prices.

“Operations remain materially unaffected by the ongoing COVID-19 pandemic. Performance at Kraken and Scolty/Crathes has been ahead of expectations, while production at Magnus and PM8/Seligi has also been good, with the two new wells drilled on Magnus coming onstream in March.

“We also took decisive, early action to reduce costs and the implementation of our cost reduction programme is progressing well.

“With the strong performance in the year to date and continued focus on delivering our cost programme, we expect that for the remainder of the year we need to realise an average oil price of around $25/Boe to achieve free cash flow breakeven, and remain confident in meeting our targets.”

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