Thursday Update

DB Live: Car output; BAE Systems; Pure Spa; Shell; Omega

5pm: Market close

Investors turned negative after digesting a series of disappointing results from some of Britain’s blue chip companies.

The FTSE 100 index dipped below 6,000, closing down 141.47 points, or 2.3% at 5,989.99.

4.50pm: Jackson Carlaw resigns

Jackson Carlaw and press

Jackson Carlaw after his election in February (pic: Terry Murden)

Scottish Tory leader Jackson Carlaw today resigned saying that he “is not the person best placed to lead” the party’s case for staying in the union.

Full story here

4.30pm: Dismay over gym delays

Britain’s biggest gym company has expressed dismay over the First Minister’s delay in reopening leisure centres and accused her of shunning the industry’s attempts to work with her on how it can operate safely.

Full story here

12.35pm: Offices stay shut

Reopening of indoor gyms, swimming pools and live events, including limited gatherings in stadia, from 14 September.

Non-essential offices and call centres to remain closed until at least 11 September.

Live outdoor events and some indoor facilities such as bingo halls can open from 24 August.

Schools to return from 11 August will all children back in class by 18 August.

Routine eyecare can resume on Monday 3 August and wider dental care from 17 August.

Indicative dates:

10.45am: FM’s stats questioned

The UK Statistics Authority has raised questions over the Scottish First Minister’s claims on at least seven occasions that the prevalence of the Covid virus was five times higher in England than it was in Scotland.

As a result of a query from Scottish Conservative shadow health secretary Miles Briggs, the UK statistics regulator has written to the Scottish Government over its use of what it terms “uncaveated” statistics.

Full story here

10.30am: Increased isolation

People who display symptoms of coronavirus must self-isolate for a minimum of 10 days, the UK’s four chief medical officers have said, adding that there is a “real possibility” people may continue to be infectious for longer than the current guidance of seven days.

10am: Pure Spa owner criticises government

Becky Woodhouse

Becky Woodhouse: communications challenges (pic: Terry Murden)

Pure Spa and Beauty owner Becky Woodhouse has criticised the government for failing to give clear guidance on reopening, saying that it caused confusion over dealing with clients.

Ms Woodhouse, who founded the chain in 2002, has invested in expanding its operations ahead of finally reopening the business this weekend.

A former office above its Rose Street salon has been converted into additional customer space.

“The lack of clear guidance from UK governments has led to a lot of communication challenges with our clients, especially about reopening dates across our estate,” she said.

“We continue to await the UK government’s announcements for further steps that will allow our business to operate as fully as possible. Safety and hygiene has always been a very big part of our industry.”

8.15am: London opens lower

London defied expectations of following the US higher following the Fed decision. The FTSE 100 opened in negative territory as investors reacted to losses at Lloyds Banking Group and Shell. The index was trading at 6,074.00 −57.46 (0.94%).

7am: BAE Systems dividend to restart

Defence and engineering firm BAE Systems posted weaker profit for its first half of the year, but a speedy operational recovery from the pandemic meant it was confident on the second-half of the year and would restart dividend payments.

BAE’s board has declared an interim dividend of 9.4p per share, in line with 2019’s half-year payout.

Profit before tax fell 11% to £689m in the six months to 30 June compared to the same period in 2019 on a 5% rise in revenue to £9.18bn year on year.

Charles Woodburn, chief executive, said: “Assuming no significant COVID-19 resurgence, we expect a good second half to the year. Demand for our capabilities remains high and we recognise our role not only in supporting national security, but also in contributing to the economies of the countries in which we operate.”

Shell swings to loss

Royal Dutch Shell swung to a second-quarter loss as the oil major took a $16.8 billion impairment charge.

Adjusted earnings – previously referred to as CCS earnings attributable to shareholders excluding identified items – slumped to just $638 million in the second quarter from $3.46 billion a year ago.

Stuart Lamont, investment manager at Brewin Dolphin, said: “Inevitably, the biggest talking point in this morning’s results from Royal Dutch Shell is the huge loss the company has incurred – largely as a result of revised pricing. It is an indication of just how serious the impact of Covid-19 has been on businesses, particularly in the oil and gas sector.

“The pandemic’s influence is likely to remain far-reaching, with Shell saying it may still need to curtail or reduce production later in the year to mitigate lack of demand – an indication that there may still be more pain to come.

“Investors can, however, take some succour from the maintained – albeit comparatively low – dividend, which some had feared may come under pressure again following Shell’s historic cut earlier in the year.”

Lloyds plunges

Lloyds Banking Group

Lloyds Banking Group, which includes Bank of Scotland, Scottish Widows and Halifax, plunged to a pretax loss in the first half of 2020, as it set aside £2.4 billion to cover a likely hike in bad loans resulting from the Covid crisis.

Full story

Omega Diagnostics Covid progress

Omega, the medical diagnostics company says its COVID-19 test device partner Abingdon Health has confirmed that it is ready for professional use.

A planned study will be performed by Ulster University using approximately 2,000 volunteers and, once complete, will allow the UK-RTC to seek final approval from the MHRA for self-test use. In addition, the test will also be subject to further independent evaluation.

The company is currently transferring the manufacturing process from Abingdon Health to its Alva facility and expects to complete the work to prove equivalent performance and the capability to manufacture at scale by the end of August. The company plans to have an initial rapid test production capacity in place in September to produce 100,000 tests per week scaling up to 200,000 tests per week capacity in October.

If demand through the UK-RTC was to go above 200,000 tests per week, either from the UK Government, or from other third parties, the Company would allocate additional capacity to meet that demand as well.

Colin King, CEO of Omega, commented: “I am delighted that our consortium partner, Abingdon Health has delivered another key milestone as promised and it is even more impressive that this has been achieved within such a compressed timeline to meet very stringent technical requirements set by the MHRA.

“Omega is focused on ensuring it completes the technical transfer in a timely manner and plays its part in the fight against this pandemic.”

Smart Metering Systems

Smart Metering Systems said it expects smart meter installation run-rate to return to pre-COVID levels by the beginning of 2021

FY 2020 underlying profitability remains in line with the board’s earlier expectations.

It will pay a 25p per share dividend for FY 2020 in four equal cash instalments, starting in October.

Chief executive Alan Foy said: “Despite the unprecedented circumstances, our financial performance was strong, further demonstrating the resilient nature of our business, the defensive nature of the metering infrastructure asset class and the stable cash flows it generates.”

6am: Car manufacturing falls

The number of cars built in the UK over the six months to the end of June has plunged to the lowest since 1954.

A total of 381,357 cars were manufactured, down 42.8% on the corresponding period last year, said the Society of Motor Manufacturers and Traders (SMMT).

It warned more jobs were at stake amid fears of a “double whammy” with the addition of Brexit tariffs.

The trade body estimated that 11,349 jobs were lost in the past six months at carmakers and companies which supply them with parts and services.

BGF calls for renewal fund

Stephen Welton, executive chairman of the investment group BGF, has repeated a call for a National Renewal Fund to support firms as the furlough scheme unwinds.

Full story here

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