Here we go again. After Saturday’s announcement that England will go into a new lockdown from Thursday onwards, this Monday morning companies are starting to spell out what that will mean for them.
Associated British Foods, which owns Primark, said that 57 per cent of the cheap fashion chain’s stores will be shut as of Thursday (assuming parliament approves the UK government’s shutdown plans). Almost 20 per cent are shut already because of closures in France, Ireland and Catalonia, among other regions. It will lose around £375m in sales and £37m in ebitda during the announced periods of closure; during the first lockdowns it lost around £650m a month in sales foregone.
Insurer Hiscox estimates it could have another $30m to $40m potential exposure linked to event cancellation if restrictions on travel and big group gatherings extend into next year. Previously it estimated its exposure for Covid claims at $387m net of reinsurance, including claims for business interruption insurance.
And bookie GVC, which owns Ladbrokes Coral, reckons lockdowns (as announced) will hit ebitda by £37m as betting shops are forced to shut. If all retail outlets are required to be closed for a whole month, that would knock £43m off ebitda, GVC estimated.
Unsurprisingly business leaders are calling for more government support — but Boris Johnson is set to skip the CBI annual conference on Monday, a rare non-appearance by a sitting prime minister. Business secretary Alok Sharma is due to attend the employers event in his stead.
Ryanair published its half-year results, showing a pre-tax loss of €432m. The summer season is usually Ryanair’s most profitable period; in the first half of last year the low cost carrier reported a €1.26bn profit. The figures were weighed down by a €214m charge for ineffective hedges; excluding exceptional items, the airline reported a €197m loss. Losses are set to increase in the second half of the year. But the airline made no further cuts to its winter schedule: boss Michael O’Leary said it was already running only a skeleton service for November and December.
Ocado meanwhile has upgraded its ebitda guidance to more than £60m from more than £40m with just under a month of its fiscal year to go. The online grocery delivery group said demand had remained high. It has also announced acquisitions totalling $287m this Monday morning of two companies linked to robot picking tech (ie robotic arms) for use in its warehouses.
Finally there is a half-year trading update from online estate agent Purplebricks. It expects to report adjusted ebitda “comfortably ahead” of consensus for the full year (though the consensus estimate is only £3.5m) after the recent rebound in the property market; but boss Vic Darvey warned it was too early to extrapolate trends from the first half out to the rest of the year as lockdown starts again.
Beyond the Square Mile
Huawei is working on plans for a dedicated chip plant in Shanghai that would not use American technology. Two people briefed on the project said the plant would be run by a partner, Shanghai IC R&D Center, a chip research company backed by the Shanghai Municipal government. Industry experts said the project could help Huawei, which has no experience in fabricating chips, chart a path to long-term survival. Meanwhile, private equity firm Stonepeak Infrastructure Partners is buying Astound Broadband, a network of US regional cable operators, in an $8.1bn deal.
The New York Stock Exchange is on track to steal back the crown for US stock market listings from its rival Nasdaq after tapping into the booming market for blank cheque companies. Companies have raised $66bn through listings on NYSE this year compared with $61bn on Nasdaq, with nearly two-thirds of the proceeds raised on NYSE coming from special purpose acquisition companies or Spacs.
America’s third-quarter earnings season is proving less downbeat than Wall Street analysts had forecast, with companies broadly reporting a shallower rate of decline in profits and sales than had been expected. The total profits per share reported by companies listed on the blue-chip S&P 500 index have come in nearly a fifth higher than analysts predicted just several weeks ago, according to FactSet data, with 63 per cent of the companies on the index disclosing their figures so far.
Essential comment before you go
Jemima Kelly There comes a time in life when you realise that some of the friends you used to consider good friends aren’t actually your true friends. These are your party friends. And so it is with fintechs. They grew up in the party years but have failed to prove themselves during this crisis.
Pilita Clark The US election is yet another sign of the exhausting example being set for the rest of us by older people, writes a quinquagenarian.
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