By Powerscourt on 07/12/2020
Powerscourt Coronavirus Briefing – 07 December 2020
ANALYSIS
The biggest mass vaccination programme in history gets under way this week, and it will begin in the UK. This follows the country becoming the first western country to approve a vaccine (from Pfizer-BioNTech) against Covid-19, last week.
As the world awaits its jabs, and amid rising optimism over the vaccines, there are warnings not to get carried away. The arrival of vaccines means “the beginning of the end” of the pandemic in the UK, said Stephen Powis, medical director of the National Health Service, but the vaccination programme “is a marathon, not a sprint.”
Bloomberg reports that more than 80 agreements, covering 7.85 billion vaccines, have been struck between drug companies and governments to ensure deliveries of supplies. The most popular is the one developed by AstraZeneca and Oxford University – which is still undergoing trials because of confusion about its effectiveness. According to Bloomberg, AstraZeneca and Oxford have struck deals with countries for supplies for 1.48 billion people, “far more than any other drug maker.”
The Financial Times cites an Italian TV report that the World Health Organisation (WHO) published and then withdrew a critical assessment in May of Italy’s “chaotic” initial response to the epidemic. The 102-page report claimed the decentralised health system and delays in test-and-trace contributed to what was then Europe’s worst outbreak. The WHO told the FT the report was withdrawn because of “factual errors,” a claim disputed by some of its authors. Italy’s death toll passed 60,000 at the weekend.
Rudy Giuliani, personal lawyer to President Donald Trump, has tested positive for the virus, adding to the sense that Covid-19 is out of control in the US. The US Food and Drug Administration is expected to meet on Thursday to study the Pfizer-BioNTech vaccine.
Moncef Slaoui, who runs Operation Warp Speed, the Trump administration’s vaccine development programme, said he expected the FDA to reach a positive decision, “but of course it’s their decision.” First vaccine shipment will happen the day after the vaccine is approved, and the administration is pushing for up to 24 million vaccines to be distributed by mid-January to those most in need.
In an interview with CBS, Slaoui said he would meet this week with President-elect Joe Biden’s transition team. The New York Times reports that Biden has picked Xavier Becerra as his nominee for health secretary. Becerra is the attorney-general of California, one of the worst-affected US states. Most of the state is preparing to go into a three-week lockdown from midnight on Sunday – early Monday in Europe – that is likely to last through Christmas.
Covid-19 virus has devastated the high street and shut offices around the world. Its next victim – public transport. The NY Times reports that transport network operators in New York, Atlanta and other cities are preparing to slash services because they are running out of money. “The profound cuts agencies are contemplating could hobble the recoveries of major cities from New York to Los Angeles to San Francisco, where reliable transport is a lifeblood of the local economies,” the paper reports.
WHAT ARE COMPANIES SAYING?
Industrials
Ceres Power
Ceres Power, a leader in solid oxide fuel cell technology and Bosch Group, a global leader in Mobility Solutions, Industrial Technology, Consumer Goods, and Energy and Building Technology, today published a joint press release on the next phase of their strategic collaboration. This announcement marks a major milestone in the close relationship between Ceres and Bosch and follows a successful prototype phase. Bosch is now preparing to start volume production of fuel cell systems incorporating Ceres’ proprietary SteelCell® SOFC technology in 2024, aiming to achieve an initial annual production of around 200MW from manufacturing facilities in Bamberg, Wernau and Homburg and engineering locations in Stuttgart-Feuerbach and Renningen. The value to Ceres from 2021 to 2023 is around £23m, of which c.£6m is conditional on meeting certain KPIs based on performance.
Kingfisher
The home improvement retailer has said it will return the business rates relief it received from the United Kingdom and Republic of Ireland governments during the COVID-19 pandemic, joining a list of other British retailers. The company now expects adjusted profit before tax for full year 2020/21 to include about £85 million pounds of non-recurring cost savings net of any one-off COVID-19-related costs, compared with prior forecast of £175 million.
Consumer & Retail
Ted Baker
Ted Baker’s six-month sales dropped and losses widened as the fashion retailer was forced to discount aggressively to attract “cash-strapped consumers” as coronavirus pandemic tightened its grip. The fashion chain, which this summer launched a turnround plan, on Monday said revenues dropped 46 per cent to £169.5m in the six months ending August. Losses before tax widened by over £63m to £86m. The latest round of lockdowns and slow return of consumer demand were behind the poor figures, chief executive Rachel Osborne said on Monday. She added that there had been “heavy discounting online across global markets by many of our peers”. Osborne took over at the company in March, after the group’s founder Ray Kelvin was pushed out after 32 years following allegations of “forced hugging”. The hugging scandal and falling sales have prompted a full scale overhaul of the company, with Ted Baker midway through a “painful and challenging” restructuring that has led to the loss of just under 1,000 jobs.
The Hut Group
The Hut Group has bumped up its full-year sales forecast for the second time since listing in September as events such as Black Friday and Cyber Week fuelled spending at the UK online beauty and health nutrition retailer. Revenue is expected to reach £1.57bn to £1.60bn by the year-end, up from expectations at the end of October of £1.48bn to £1.52bn. Those sales would represent a 38 to 40 per cent increase on the previous year. Shares in The Hut Group were listed at 500p a share in September. They have since risen 29 per cent to close at 649p on Friday.
Financials & Real Estate
Connells Ltd
Real estate management firm Connells has said it has raised its buyout offer for Countrywide Plc to £164.5 million pounds after the British company rejected its initial approach last month. The increased offer values Countrywide at 325 pence per share, 30% higher than the previous proposal of 250 pence per share. “Countrywide desperately needs a deliverable solution to its current financial problems and lack of strategic direction,” Connells Chief Executive Officer David Livesey said. The company has been trying to recover from a botched 2015 restructuring that led to four profit warnings and a deeply discounted share issue. Countrywide said in October funds advised by Alchemy Partners proposed investing about 90 million pounds in the company in exchange for management control following the recapitalisation.
Permira
UK private equity firm Permira has agreed a deal for a stake in a curated online auction site targeting wealthy consumers with high-end collectibles from classic cars to art and movie memorabilia, in its latest bet on luxury. Lossmaking Catawiki, which specialises in selling high-value collectors’ items, will use the €150m Permira investment to hire more specialist buyers, who select items for listing, and to return cash to early investors and employees. The deal values the business at roughly €500m. The Amsterdam-based company, founded in 2008, reported an ebitda loss of €4.6m in the year to December 2019. Chief executive Ravi Vora said he expected the site to turn a profit in 2020 since sales had grown despite the worldwide recessions caused by the pandemic. “When people look at their priorities in these turbulent times, they’re motivated to pursue their passions,” by spending on collectibles “rather than another phone or pair of trainers which doesn’t give you inner joy,” he said.
TMT
Cisco
Cisco Systems Inc. said it will buy Iodine Plc for $750 million to add artificial intelligence software used to help companies manage customer relationships. The U.S. maker of networking gear will pay 595 pence a share for the U.K. provider of cloud communications software. The cash offer, which includes debt, is expected to close in the first quarter, Cisco said in a statement. Cisco’s Chief Executive Officer Chuck Robbins is seeking to recast the company, whose hardware is the backbone of the internet, as a networking software and services provider. He’s responding to an industrywide shift that has seen more of the functions traditionally provided by in-house hardware migrate to outsourcing offered by remote data centers. Cisco is seeking to push further into automation to improve the way its customers reach out to their end-users, enabling them to make their pitches and services more effective. And it wants to add those capabilities to its existing customer-relationship management offerings. “A great customer relationship is built on consistently enjoyable interactions where every touchpoint on every channel is an opportunity for businesses to deliver rich, engaging and intuitive experiences,” Cisco Senior Vice President Jeetu Patel said in the release.
IN THE NEWS
Plans for Irish Sea trade border after Brexit ‘in a mess’ – Financial Times
Angela Merkel and Emmanuel Macron in final bid for a deal – The Times
Brexit talks on ‘knife edge’ as EU backs down over fishing – The Telegraph
