By Powerscourt on 27/06/2020
It’s party time! Well, no actually. Self-responsibility is the catch phrase we’ll be hearing a lot more of, but whether the great British public is ready to be trusted as we come out of lockdown remains to be seen.
In a week that was supposed to herald the further easing of lockdown measures, we instead come into the weekend with the Health Secretary threatening to close beaches as thousands flouted warnings to enjoy the balmy conditions.
Images of the ‘major incident’ in Bournemouth will have done nothing to assuage growing fears of a resurgence in infection rates with John Apter, the national chair of the Police Federation, warning that the further loosening of the lockdown on 4 July could be “a countdown to party time”. The advice from the World Health Organisation is to instead “celebrate by being super careful”.
European markets slipped back during Friday, tracking Wall Street as the S&P 500 closed down 2.4% on the back of worrying news that cases are soaring in some US states, including Arizona, Texas, South Carolina and Florida. Yesterday, the latter reported another one-day record for new infections with new cases doubling to 9,000 compared to the day before. This has led to worries of a slowdown in the US economy’s reopening, although other states such as New York are striving ahead with plans to revive business as their infection rates decline.
Back in the UK, Friday brought arguably the biggest corporate casualty of Covid-19 to date as shopping centre giant intu collapsed into administration after a gallant effort to convince its multitude of lenders to grant it more breathing space to fix its balance sheet.
This unfortunate development has again brought into stark focus the disparity in state support provided to tenants during the pandemic. Many would argue retailers and others have been incentivised to withhold rent by the Government’s temporary moratorium on evictions and statutory demands. In the coming days and weeks we will no doubt be reading a lot more about the repercussions of intu’s demise and the fate of the UK’s battered retail sector as a whole.
To end on a positive note, there is at least some cheer for airlines and holiday firms following a significant easing of the government’s travel restrictions. Ministers will next week announce a traffic light system that will allow from 6 July quarantine-free travel to certain low risk countries with 15 destinations initially on the list including France, Greece, Spain and Italy.
WHAT ARE COMPANIES SAYING?
Consumer & Retail
In its interim results to 28 March 2020 released yesterday, the pub group reported that Covid-19 had had a “material impact on revenues estimated at c£40m”, even prior pubs being forced to close under the lockdown restrictions. It reported a pre tax loss of £33.2m, down from a profit of £16.1m for the previous year, announcing cash burn of £10m per month during the lockdown period. The group plans to reopen its pubs on 4 July.
The online fashion retailer has announced a plan to pay bonuses of up to £100m to its co-founders and £50m to other executives, based only on share price performance and with no shareholder vote. The scheme will run for three years. Boohoo’s share price has risen 160 per cent since lockdown began in the middle of March, with the group’s sales remaining strong throughout.
The Post Office
As the government gives the green light for travel abroad to certain destinations from July, the Post Office is ending its suspension on travel money, resuming services previously offered such as delivery and click and collect. Head of Post Office Travel Money Nick Boden said: “We have been monitoring the position carefully in recent weeks and are aware of growing consumer interest in holidays as lockdown rules have relaxed”. The Post Office is the UK’s biggest travel money provider, dealing with around one in four exchanges.
Industrials & Transport
The CEO of the American airline has said that the carrier will continue to impose limits on the number of passengers allowed on each planes beyond September. Speaking to the BBC, he did not confirm whether the cap would remain at its current level of 60 per cent capacity or be slightly higher, but was clear a cap of some description would be kept in place.
The Australian airline has been bought by private equity group Bain Capital, after falling into administration in late April after the coronavirus pandemic put a stop to the majority of travel. Virgin Australia’s CEO Paul Scurrah said that the proposal offered “the best possible future” for the airline, which owes nearly £3.9 billion to around 15,000 creditors.
IN THE NEWS
One in four manufacturers losing business from quarantine rules – The Daily Telegraph
Holiday season back on with travel “traffic light” plan – The Times
Britain’s cultural venues to reopen without crowds and queues – The Financial Times