By Powerscourt on 04/04/2020
Powerscourt Coronavirus Briefing – 04 April 2020
Yesterday brought a bad week for international markets to a worse end with March data showing the sharpest downturn in the global economy since the Great Depression. April is expected to be less good.
British service sector activity suffered the greatest reduction in output since the leading IHS Markit Purchasing Managers’ Index began in July 1996, while the US lost 710,000 jobs in early March, bringing 113 months of continuous jobs growth to an end, and European services sector data painted a similarly bleak picture. A forecast from Pantheon Economics predicted that a 1.5% contraction in the UK economy in the first quarter would be dwarfed by one of 13% in the second.
At the UK government daily briefing on Friday evening, Health Secretary Matt Hancock expresses concern about the next two days, as UK weather is set to warm up this weekend, prompting his reminder, fresh out of self-isolation himself, that social distancing is an instruction, not a request. He was able to give good news about the opening of the 4,000 bed Nightingale Hospital, the UK’s first emergency field hospital, built in just nine day’s in London’s ExCel Centre, with two more to follow in Bristol and Harrogate.
For those dutifully staying inside, today will see a major attempt to adapt a national cultural landmark to the crisis, with this year’s Grand National becoming the first virtual horse race on prime-time TV. At the usual time of 5.15pm, viewers will see a virtual recreation of the Aintree racetrack, which was shot by drone and special cameras to allow the realistic creation of dramatic angles on horses and riders. Leading bookmakers are running initiatives to donate profits to the NHS.
The UK gambling sector received a boost from the British Horseracing Authority yesterday, which confirmed the intention to restart flat racing from the start of May, prompting rare recent share prices rises for Flutter, GVC and William Hill.
WHAT ARE COMPANIES SAYING?
Consumer and Retail
Sainsbury’s chief executive provided an update on Friday on the new measures they are introducing to stores. From Friday onwards, Sainsbury’s has asked everyone to please only send one adult per household to their shops as this helps us keep people a safe distance apart and also helps to reduce queues to get into stores. The supermarket added that in the next few days they will have finished installing the screens across all manned checkouts in every supermarket, convenience store and Argos collection point.
NEXT produced a short statement to say that it has received confirmation that it is eligible to access funding under the Covid Corporate Financing Facility.
Sky News reported that Debenhams is set to apply for administration as early as next week as it runs out of cash after being forced to shut all stores. The retailer is in talks with advisers including KPMG as they seek to protect the business from creditors during the COVID-19 pandemic.
Heavitree Brewery confirmed that the Company’s AGM is scheduled for the 15 April 2020. In March 2020, they announced in view of the ongoing COVID-19 pandemic, shareholders were being encouraged to appoint the Chairman as their proxy, rather than attend the AGM in person. The COVID-19 situation has continued to evolve rapidly since then and due to the compulsory ‘Stay at Home’ measures, shareholders are not allowed to attend the Company’s 2020 AGM in person and anyone seeking to attend will be refused entry.
Travel & Leisure
Further to the announcement on 2 April 2020 regarding the receipt of a notice from easyGroup Holdings Limited requisitioning a general meeting of the Company’s shareholders and noting that a supplemental technical notice relating to the Requisition Notice was received from easyGroup yesterday. The Board of directors of the Company then confirmed to easyGroup that it has rejected the Requisition Notice as invalid because it did not comply with the requirements of the Companies Act 2006. Shareholders are advised to take no action at this time.
ITV will be broadcasting a computer stimulation of the country’s most famous horse race on Saturday. After, the race was cancelled due to the coronavirus pandemic, ITV decided to replace it with a virtual race, the first time that a stimulation has been given such prominence. Last year’s race attracted an audience of almost 10 million viewers. Several bookmakers have decided to donate any profits to the NHS.
British Horseracing Authority
British Horseracing Authority confirmed plans to restart flat racing behind closed doors from the beginning of May to minimise demands on emergency services. The group has made the decision to stop Jump racing until at least 1 July. BHA said it will aim to issue an update each week on a Friday in order to keep participants, stakeholders and the wider racing industry and public up to date.
Oracle Power Plc
Oracle Power said that despite the ensuing pandemic they are pleased to say that Q1 has been a very constructive phase for their company and one which has delivered several material developments. Whilst the Board of Oracle is “ cognisant of the global economic uncertainty and political nervousness surrounding the pandemic” they are confident that there will be no significant adverse impact on the timelines to the development of Thar Block VI (site).
Financials & Real Estate
Legal & General
The Board of Legal & General said that it has given careful consideration to the PRA’s letter of 31 March. The Board observed that the Group’s solvency position remains robust so therefore, while they will continue to monitor events, its current intention is to confirm its previous recommendation for a final dividend. The Board continues to pay close attention to the need to protect its customers and employees at this difficult time and plays its full part in supporting the real economy, but it also recognises the importance of dividend income to many institutional and retail shareholders, particularly in the current environment.
Barclays have announced a venue change for their AGM on Thursday, 7 May. Previously the meeting was supposed to be held in Glasgow but In light of the coronavirus (COVID-19) situation and the UK Government’s current guidance and restrictions on travel and public gatherings, the decision has been made to move the AGM venue to Barclays’ registered office in London. In addition, Barclays said, regrettably, under current UK Government guidance on social distancing and prohibiting gatherings, it will not be possible for shareholders to attend the AGM in person, and they will not be permitted entry, unless both the coronavirus (COVID-19) situation and the UK Government guidance have changed by the date of the meeting. Instead, the bank encourages shareholders to vote on all resolutions by completing an online proxy appointment form.
RBS announced that its Annual General Meeting will be held on Wednesday, 29 April 2020 in Edinburgh. In response to the Coronavirus pandemic and the new laws, this year’s AGM is expected to take a different format from previous years. In these exceptional circumstances, shareholders should not be permitted to attend this year’s AGM and instead are asked to submit their proxies in advance either online or by post.
FBD Insurance, Irish property & casualty insurance giant, announced that its Board has decided to postpone its AGM, originally scheduled to take place on 8th May 2020. All business normally conducted at the AGM, including the approval of a final dividend, will be deferred to the later date which will be advised to shareholders in due course.
Funding Circle published their Annual Report for the year ended 31 December 2019 highlighting loans under management grew to a record £3.7bn up 19% year on year. Additionally, they published a notice of their 2020 AGM which is to be held on the 20 May 2020. The Board requested due to current measures that shareholders do not attend the AGM in person and instead appoint the chair of the meeting as proxy and provide voting instructions in advance of the AGM.
Travis Perkins announced that its 2020 Notice of Annual General Meeting together with the 2019 Annual Report and Financial Statements has been posted to Shareholders who elected to receive them in hard copy form. The AGM will take place on Tuesday, 28 April 2020. Following the introduction by the Government of compulsory measures, Travis Perkins outlined the arrangements in light of Covid-19 such as voting by proxy and sending questions in advance.
Following on from ITV’s earlier announcement on 23 March 2020 on the numbers it was taking to reduce costs and manage its cashflow in response to the COVID-19 pandemic, ITV has provided a further update on director remuneration. The Remuneration Committee has decided that Annual Bonus for the Executive Directors and Management Board would be cancelled and there will be no cash bonus payable to them in respect of the Company’s performance in 2020. For the duration of the lockdown, there is a voluntary 20% reduction in base salary for the Executive Directors and Management Board. In the event that the lockdown continues beyond 30 June 2020, the Committee will review this matter again at that time. The Non-Executive Directors will also take a 20% reduction in their fees for the same period of time. In addition, as part of the cost saving measures ITV has introduced, it has already put in place a recruitment and salary freeze across the Company.
The Times has launched an emergency funding appeal to help some of the people hardest hit by the coronavirus pandemic. The paper has chosen two charities, the Big Issue Foundation, to support vendors who sell this pioneering magazine and their second partner is Family Action, a 150 year old charity that provides practical, financial and emotional support to families experiencing poverty, disadvantage and social isolation.
The Telegraph reported that Facebook is battling a surge in posts promoting baseless conspiracy theories linking coronavirus to 5G. This follows on from the emergence of videos on the site purportedly showing telecommunications masts on fire in Birmingham. Videos were posted on Facebook claiming to show 5G towers on fire alongside comments encouraging users to do the same to “save humanity”.
IN THE NEWS
Virus brings UK economy to its knees – The Times
Companies close doors to investors at annual meetings – The Times
West plunges into recession as virus sparks economic catastrophe – The Telegraph
Coronavirus death rate could peak in UK at Easter – Financial Times
Coronavirus: ‘Stay at home’ plea as Easter holiday starts – BBC