Powerscourt

By Powerscourt on 09/08/2020

Powerscourt Coronavirus Briefing – 09 August 2020

ANALYSIS

Authorities in Preston have urged people not to “kill granny” amid reports almost half of new cases in the town were among those aged 30 and younger. This followed news that up to 750,000 coronavirus test kits have been recalled over safety fears.

Manchester City Council has announced it will make all outdoor areas smoke-free to “avoid a new health crisis”. Communities Secretary Robert Jenrick intervened to say said it will wreck the chances of pubs and cafes bouncing back from the lockdown.

Professor Russel Viner, President of the Royal College of Paediatrics and Child Health, has said there is very little evidence that coronavirus is transmitted in schools. The National Education Union, however, continues to fight re-opening. It has made a list of 200 demands, which senior MPs have branded a “wreckers’ charter” aimed at blocking the return to school next month.

Deaths in the UK have now reached 46,566, after 55 more fatalities yesterday. However, according to NHS England, hospital staff are now treating just 700 coronavirus patients a day in England, compared with about 17,000 a day during the middle of April. Fatalities are down 99% and some hospitals have no coronavirus patients, sparking hope that ‘herd immunity’ may be near.

Finally, nearly 1,800 UK companies told the Government of plans to cut 20 or more jobs in June. Royal Mail, Centrica and The Restaurant Group were among those announcing four-digit job losses. Figures obtained by the BBC in a Freedom of Information request showed that 1,778 companies had informed the Insolvency Service of their intention to cut more than 139,000 jobs in England, Scotland and Wales.

 

WHAT ARE COMPANIES SAYING?

 

Retail & Consumer 

Pret a Manger
Pret a Manger has requested thousands of staff work around 20% less hours as the fast food chain tries to survive according to The Sunday Times. Pret had already warned that at least 1,000 of its 8,000 employees could lose their jobs as part of plans to close 30 of its 410 stores.  Pret said: “Our priority is to do everything we can to save jobs. With footfall in our shops still significantly below normal levels, we have had to review the hours team members are contracted to work each week. By making these changes we are able to save a large number of roles.”

Hays Travel
The Observer and openDemocracy revealed that the holiday agency has its customer service centre staff working on the government’s Covid-19 contact-tracing operation. The agency pitched for the work in March when the travel industry came to a standstill. A spokeswoman said that Hays Travel does not have a contract directly with the government, but has been subcontracted by two providers. Serco, the logistics company confirmed that it has subcontracted Hays Travel to do some of the work, and more companies from the travel sector and other industries.

WH Smith
The Sunday Times reported that WH Smith is asking for rent cuts from landlords as it struggles to contain costs. The retailer with 575 shops in town centres and 560 in travel hubs across the UK, has now drafted in its property adviser, Gerald Eve, to sort out deals with property owners. WH Smith announced it would cut up to 1,500 of its 14,000 jobs after sales crashed by 57% last month.

Edwardian Hotels Group
The luxury hotel group which includes the May Fair in London has said more than 1,000 staff face redundancies. Caroline Marais, human resources director at Edwardian Hotels commented: “Covid-19 has severely affected . . . the hospitality industry and our business. Regrettably, we have to make difficult decisions, such as the reduction of the corporate work week . . . salaries and some permanent job cuts.” She would not say which hotels were affected. STaff are thought to have been told to agree to new contracts by tomorrow which could include a 50% cut in hours according to The Sunday Times. The adjustment to hours is said to have reduced the job-cut tally from 1,500. 

Airbnb

In an interview with The Sunday Times CEO Brian Chesky said that coronavirus has made him rethink the entire homeshare service and has come to the conclusion “he has mucked it all up.” “We grew so fast, we made mistakes,” he said. “We drifted. We really need to think through our impact on cities and communities.” Here he is referencing the service, initially a side hustle for homeowners, which begun to be taken over by professional landlords who used the platform to let out multiple properties increasing rent and house prices. He describes the Covid-19 pandemic as “a reset for everything and everyone. Airbnb needs to change. We need to go back to basics — to what really made us successful in the first place. I’m not meant to do real estate. I’m not even meant in a larger sense to do travel. We’re about connecting people.”

 

Financials & Real Estate 

Berkshire Hathaway
The Financial Times reported on Berkshire Hathaway’s Q2 2020 earnings which showed a “surge in profits in the second quarter as the value of its stock portfolio rebounded”. Net income rose 87 per cent from the year before to $26.3bn for the three months to the end of June, driven by a broad market rally that lifted the shares of Apple (its largest stock investment). However, the earnings of the dozens of companies Berkshire owns fell 10 per cent from the previous year to $5.5bn. After dumping his stakes in airlines earlier this year, the firm took roughly a $10 billion impairment charge tied to Precision Castparts, a manufacture of plane parts. 

NatWest
The Sunday Times reported this morning that NatWest is to remove a few top bankers as “part of a dramatic overhaul of its investment bank, as new boss Alison Rose attempts to cut ties with its past.” The bank, formerly known as Royal Bank of Scotland, is expected to tell staff this week that at least three of its most senior investment bankers will stand down. NatWest is understood to be focusing on retail and commercial banking whilst shrinking the investment bank.

 

IN THE NEWS

UK poised to suffer the biggest Covid blow of any major economyThe Telegraph

‘Forgotten’ company directors plead for coronavirus relief The Sunday Times

Boris Johnson: Children suffer more by staying home The Sunday Times

Sir Ian Wood warns of further oil job cuts – The Telegraph




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