Powerscourt

By Powerscourt on 28/09/2020

Powerscourt Coronavirus Briefing – 28 September 2020

ANALYSIS

The UK government is set to implement a “total social lockdown” across much of Northern England and London, within days, according to multiple reports on Monday.

The Times says pubs, restaurants and bars will be ordered to close for an initial two-week period and householders will be banned from meeting in indoor locations, although schools, factories and offices will remain open.

The Times and the Daily Mail report that the plan was initially presented to the British Cabinet last week, but rejected due to concerns it would provoke a backlash from the public. “The nation and the party wasn’t ready for us to go any further last week,” a government source was quoted as saying.

The row over the treatment of university students in Manchester has been defused somewhat over the weekend. Manchester Metropolitan University has said students at two halls of residence who had been confined to their student halls are now free to leave. The university had ordered students to self-isolate in their rooms for 14 days after 127 students tested positive for coronavirus, with police and security enforcing the restrictions. But students – many of whom are away from home for the first time — complained they were given no warning of the impending lockdown and no guidance on  how to prepare for it.

As it is, rules are becoming tougher in England, with fines of up to £10,000 for people who refuse to self-isolate now in effect. Most of Wales is now lockdown.

The UK generally seems to be pivoting on a daily basis between growing authoritarianism and the need to preserve individual freedoms, something which is prompting uproar in sections of the Conservative Party. The Telegraph reported that Prime Minister Boris Johnson has been told to expect defeat this week if he defies an amendment from the influential backbench 1922 committee urging that parliament be given a greater say over new lockdown powers.

The global death toll from coronavirus is approaching 1 million. In the US, where virus levels remain stubbornly high, the number of tests coming back positive exceeds 25% of the population in several states in the US.

But hope springs eternal, this week in the form of an exploratory nasal spray. An Australian biotech, Ena Respiratory, has developed the treatment, which has proved to reduce virus levels in ferrets of up to 96%. The study was backed by Public Health England and is aiming to move into human trials as soon as possible.

Meanwhile, blood banks in the US are focusing on finding patients who have recovered from COVID-19 with high levels of antibodies to become “superdonors” of blood plasma. The FDA in August approved the use of convalescent blood plasma from virus survivors as a potential therapy for people in hospital.

Asian shares rose early Monday, fuelled by promising Chinese economic data over the weekend and a broad sense that Asia Pacific is in recovery mode. Melbourne Australia, the site of a recent virus hotspot, is on track to return to near normal by Christmas, Reuters reports, providing a major fillip to the country’s economic revival.

 

WHAT ARE COMPANIES SAYING?

 

Consumer & Retail

Diageo
Diageo issued trading commentary ahead of its AGM where Ivan Menezes, Chief Executive, said that the Company’s outlook “for the first half of fiscal 21 has improved since the year-end, reflecting the good start to the year, particularly for its US business.” The US business is performing ahead of expectations, reflecting resilient consumer demand and the spirits category continuing to gain share within the total beverage alcohol market. In Europe, off-trade demand remains robust and the on-trade channel has largely re-opened with the easing of lockdown measures in most countries, although the risk of additional restrictions remains where infection rates are worsening.

Imperial Brands
As previously announced in April, Imperial Brands agreed the sale of its worldwide premium cigar businesses for a total consideration of €1,225 million, of which net cash proceeds of €1.1 billion will be used to reduce debt. Given the challenges caused by COVID, Imperial has agreed to complete both transactions on 29 October 2020, slightly delayed from the original timetable.

Aldi
Aldi has said that it expects to create 4,000 new jobs in 20201 and will invest £1.3 billion over the next two years with new and upgraded stores, distribution centres and further innovations across its business. Aldi’s expansion includes 100 new shops and the modernisation of another 100. In its annual trading update, Aldi reported a 8.3% increase in sales to a record £12.3 billion. Pre-tax profit jumped 49% to £271.5m.

 

Industrials 

Ceres Power Holdings
The fuel cell and electrochemical technology firm released its second set of interim results reporting strong progress on major contracts had driven a 21% increase in revenue and other operating income to £19.9 (2019: £16.4m). Ceres said disruption from Covid-19, coinciding with the commissioning of its new facility at Redhill, has meant that some revenues have been deferred from this reporting period. However, it has “delivered a solid set of results, with continued revenue growth through good progress with our customer programmes and increased manufacturing output.”

 

Media

Reach
The commercial national and regional news publisher in the UK announced its Half Year Report highlighting a strong recovery in digital advertising and increased customer engagement across all channels with over 3.5m new customer registrations. Nevertheless,  revenue was down 17.5% at £290.8m reflecting the impact of COVID-19 on all revenue categories.  The Group is “currently performing materially ahead of market expectations for the full year”.

 

Pharmaceuticals 

Avacta
The developer of innovative cancer therapies released its unaudited interim results and discussed its upcoming milestones. One of its diagnostics programmes in collaboration with Cytiva (formerly GE Healthcare Life Sciences) is to develop a rapid test for the COVID-19 coronavirus antigen for mass population screening. Since this period it has also entered into a collaboration with the Liverpool School of Tropical Medicine to provide clinical validation of the rapid, saliva-based coronavirus antigen test and announced the launch of an ELISA laboratory test for the SARS-CoV-2 spike protein to support global research efforts into the coronavirus that causes COVID-19.

 

IN THE NEWS

Emergency lockdown plan to ban socialising and combat second wave of coronavirus  – The Times

Tory Rebellion Gains Ground to Curb U.K. Ministers’ Covid Powers – Bloomberg

Pandemic forces steel industry to confront its Achilles heel – Financial Times




DAILY CORONAVIRUS BRIEFING - How business is responding to the crisis MENU