Powerscourt

By Powerscourt on 18/07/2020

Powerscourt Coronavirus Briefing – 18 July 2020

ANALYSIS

Britain’s civil servants are to be told to return to their desks in the hope that other employers will follow suit. Prime Minister Boris Johnson wants office life to return to some degree of normality from next month.

In London, only one in eight office workers has returned, leaving the centre of the capital looking like a ghost town. According to The Times, only 800 of Goldman Sachs’ 6000 London staff and fewer than 2000 of JP Morgan’s 12,000 strong workforce have returned to the workplace.

A number of sports, including cricket, will be used to pilot the safe return of spectators before the end of the month while indoor theatrical performances will be allowed to restart next month in front of live audiences, subject to the success of similar social distancing pilots.

Global coronavirus infections passed 14 million on Friday according to Reuters, marking the first time one million new cases have been recorded in under 100 hours.

The number of people in England who have died from COVID-19 may have been overestimated by several thousand. Any patient who has recovered from COVID-19 but then subsequently died from another condition is counted as a coronavirus death. Elsewhere in the UK only those who died within 28 days of a positive test are counted.

In the US, fears over business disruptions, following a further record-breaking rise in COVID-19 cases across the nation, overshadowed positive sentiment surrounding additional fresh stimulus measures to protect the economy. Meanwhile, in Brussels, EU leaders are attempting to create a €750 billion recovery stimulus package before the end of the weekend. However, talks are said to be hanging in the balance after an acrimonious dinner on Friday involving the bloc’s 27 leaders.

UK ministers are said to be making plans to distribute millions of free coronavirus antibody tests after a version backed by the UK government passed its first major trials. The finger-pick test can tell within 20 minutes if a person has ever been exposed to the virus and has been shown to be 98.6% accurate.

 

WHAT ARE COMPANIES SAYING?

 

Consumer & Retail 

Iceland
Losses at Iceland widened by a third last year even though shoppers switched to frozen foods during the pandemic. The privately owned supermarket reported pre-tax losses of £71.8 million for the year to the end of March, compared with £53.8 million previously. Iceland said that it had endured a “sluggish Christmas” and blamed tough trading conditions on Brexit negotiations and the general election. Adjusted earnings before interest, tax and other charges fell to £133.7 million from £140.1 million. Sales, however, rose from £3.08 billion to £3.25 billion after it opened 40 shops and 31 Food Warehouse outlets.

Azzurri Group 
The casual dining group behind the Ask Italian and Zizzi chains has been bought via a pre-pack administration, with more than 1,000 jobs likely to be lost. Azzurri Group, which also owns the Coco di Mama and Pod restaurant fascias, has been acquired by Towerbrook Capital Partners, an American private equity firm that recently acquired the Car Trawler vehicle hire business. Azzurri was created via a £250 million buyout of Ask Italian and Zizzi by Bridgepoint, the European private equity investor, in 2015. It has 301 restaurants and employs more than 6,000 staff. Its Zizzi brand includes three sites in Dublin and one in Shanghai. The group also has three Radio Alice restaurants. Under the terms of the pre-pack deal, Towerbrook has pledged more than £70 million for a restructuring of Azzurri’s finances agreed with its banks, including Royal Bank of Scotland and Lloyds.

 

Industrials & Transport 

Renishaw
The precision engineer has cut its annual profit forecast significantly but has raised revenue projections, pushing its shares to their highest level in almost two years. Restructuring costs forced Renishaw to knock its pre-tax profits guidance from between £31 million and £41 million to just £4 million. However, its shares leapt by 450p, or 10.2 per cent, to £48.80 after it forecast revenue of £510 million in the year to June 30. It had suggested between £490 million and £505 million previously. Based in Gloucestershire, Renishaw conducts much of its business in the Far East and the United States. It employs nearly 5,000 people in 35 countries. It said that statutory profits, due next month, had been dented by a £24 million hit after “the reorganisation and rationalisation of certain operations”. The company also reported a £22 million blow from “financial instruments not eligible for hedge accounting”.

DCC
Business continues to recover as economies reopen, the specialist in commercial deliveries has claimed. The London-listed, Dublin-based DCC said that revenues from distributing fuel and electrical goods to retailers had fallen in the second quarter as it transported more medical goods to hospitals, chemists and doctors. Donal Murphy, 55, chief executive, said that the pandemic had had a “significant” impact on its business, but added that its performance had been “very resilient” and that it was keeping an eye on potential acquisitions.

 

IN THE NEWS

Painful cuts ahead, IoD warns staff The Times

EU leaders deadlocked on recovery fund as summit faltersFinancial Times

Exclusive: ‘Game-changing’ coronavirus antibody test passes first major trials The Daily Telegraph




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