By Powerscourt on 03/12/2020
The Covid-19 pandemic has exposed the strengths and weaknesses of the world’s health systems. Now that UK regulators became the first to approve a vaccine, it is about to test the world’s logistics industry.
It will also spark a new arms race: the competition to get billions of biceps globally injected as fast as possible. According to Bloomberg, the US will win the race, followed by the UK and then the EU.
The UK’s Medicines and Healthcare products Regulatory Agency (MHRA) approved the vaccine developed by Pfizer and BioNTech and authorised its use from next week. That has sparked intense debate about who will get vaccinated first, and how it will be delivered to the neediest places most quickly.
UK prime minister Boris Johnson said distribution of the vaccine would pose “immense logistical challenges” and that it will be months before even the most vulnerable among the UK population will be treated. Distributing and storing pose challenges because the Pfizer/BioNTech vaccine must be stored at minus 70 degrees in dry ice. The UK has bought 40 million doses.
Pfizer is a US company, BioNTech is German, and the vaccine will be manufactured in Belgium. So it was perhaps inevitable that the early approval became caught up in the Brexit debate, after health secretary Matt Hancock claimed Brexit had enabled the MHRA to move quickly. That claim sparked a row that drew in the European Medicines Agency and the German ambassador in London.
Hancock’s grandstanding did not just annoy the Germans. It also drew a strong response in parts of the British media. In an editorial on Thursday, the Times says: “The episode underlines the habitual tendency of this administration, in the greatest public health crisis for generations, to over-promise and under-deliver. The government should now eschew boasting, explain the science and concentrate on discharging the immense logistical task of distributing the selected vaccine.”
The UK regulator’s move is adding to pressure on the US Food and Drug Administration for speedy approval, the New York Times reports. Senior FDA officials were summoned to the White House on Tuesday to explain why they were not the first to approve the vaccine.
Airfinity, a London-based research firm, told Bloomberg that its analysis of production and sales orders for the various vaccine candidates shows that the United States will be fully vaccinated by late April, the UK two months later and the EU two months after that. This has obvious implications for travel and other commerce.
The Financial Times reports that global stock markets have added $30 trillion in value since their lows in March as measured by the MSCI All-Country World Index.
The virus continues to take a heavy toll in the US, where deaths and hospitalisations from the infection have reached record levels (2,700 deaths on Wednesday). Its spread is also causing administrative havoc. According to the NYT, state and federal courts in New York have completed only nine criminal jury trials since March, compared to around 800 last year, because the virus has effectively closed the justice system.
Citizens of Los Angeles have been told to stay home as the mayor issued a grim prognosis for the city where more than 7,700 have died during the pandemic.
Anybody expecting a quick return to normal winter travel should slow down. Austria has closed its ski resorts until December 24. It may also be best to avoid acting like Steve Adler, the mayor of Austin, Texas. Last month he told the city’s residents to stay at home, even as he boarded a private jet to spend a few days at a beach resort in Mexico, the BBC reports. He says he’s not a hypocrite.
Global markets were relatively calm after recent exuberance.
WHAT ARE COMPANIES SAYING?
Consumer & Retail
Sainsbury (J) PLC
Supermarket chain Sainsbury’s have today announced that they will be forgoing the business rates relief they received this year, having outperformed expectations in a strong trading period. In the first half of the year, the Group spent £290m keeping colleagues and customers safe, offset by £230m in business rates relief. However, lockdown restrictions have remained in place longer than the group anticipated and with strong operating performance due to being considered an essential retailer, and as such allowed to remain open and operational, sales and profits have been higher than anticipated. As such, the group will be agreeing an appropriate way with the government to forgo the business rates relief as repayment is not required by law.
The company, which runs about a tenth of the UK’s regional bus services, saw passenger numbers around 15% over the past four weeks after picking up to between 50 to 60% of pre-pandemic levels before the most recent national lockdown. The Group said 90% of revenues were secured through contracts and, as such, not dependent on changes in passenger demand. It is working towards paying a dividend at an appropriate level next calendar year.
Financials & Real Estate
The housebuilding the urban regeneration property today announced its full year results, having been significantly impacted by covid-19 disruption throughout 2020. Adjusted operating profit fell 77% year on year, from £234.4m to £54.2m while adjusted basic earnings per share fell 82%, down to 7.4p from 40.8p last year. However, things are looking up. The Group is on track to deliver towards the upper end of consensus adjusted operating profit expectations for FY21. There is also good progress on executing accelerated Partnerships growth, while their forward order book is up 23% to £1,432m, indicating strong demand. Additionally, the group has achieved HBF 5-star builder status for the first time.
Paragon Banking Group
The specialist lender and banking group today announced its full year results for the year ended 30 September 2020. In the midst of a difficult year, Chief Executive Nigel Terrington said ‘our lending performance has been robust and we have seen a recovery and growing momentum in new lending activities’. While underlying profit reduced to £120m from £164.4m last year, reflecting the impact of covid-19, the Group was quick to respond to the difficult trading environment, being fully operation with 90% of staff working from home within four days of the announcement of the first national lockdown. Additionally retail deposits grew 22.9% to £7,856.6m, providing the Group with reliable, scalable and cost-effective funding. In a difficult year, things have been slightly muted, but the Group is still in a good position moving forward, having navigated the pandemic relatively well.
AJ Bell plc
One of the UK’s largest investment platforms today announced its final year results for the year ended 30 September 2020. The Group saw very strong performance, with revenue up 21% year on year to £126.7m. Profit before tax rose further, increasing 29% year on year to $48.6m. This strong performance was driven by a record number of new customers joining, with 63,239, a 27% increase taking the total number up to 295,305. This swell in new customers was supported by a 95.5% customer retention rate. Chief Executive Officer Andy Bell commented “The long-term growth drivers of the platform market remain strong, with customers increasingly looking for good value, online solutions and we are well positioned to benefit from those trends.
Phoenix Group Holding plc
The UK’s largest long term savings and retirement business today released a trading update announcing strong 2020 cash generation, along with a Capital Markets Day for investors and analysts. In 2020 the Group saw strong cash generation, reaching £1,713m compared to 707m last year, exceeding the upper end of the 2020 cash generation target range of £1.5 – £1.6bn. Additionally, the Group saw £472 million incremental long-term cash generation from new business in the 9 months ended 30 September 2020.
IN THE NEWS
Health chiefs rule out private sector jumping vaccine queue – Financial Times
First vaccine jabs for NHS staff and elderly patients – The Times
The priority list for the Pfizer vaccine – and how it will be rolled out – The Telegraph