By Powerscourt on 10/12/2020
Powerscourt Coronavirus Briefing – 10 December 2020
Brexit and the COVID-19 pandemic were always set for a head-on collision, given how pervasive each has become. That collision will occur on 1 January, when free travel between the UK and the European Union ceases to exist. The Financial Times reports the staggering consequence – from that date, most Britons will be barred from visiting the EU, at least temporarily.
The UK’s transition period with the EU comes to an end just after the stroke of the new year. From that point, Britons will be subject to rules stipulating that people can enter the EU for non-essential travel only from designated countries – and the UK will not be one of them despite its low virus infection rate. The FT says Britons will be able to travel to EU countries “only if the bloc relaxes its pandemic travel curbs or individual member states choose to override the rules.”
There is currently no proposal to add the UK to the list of safe nations, which includes Australia, New Zealand and Singapore. “If a proposal is made, Britain would still have to meet the technical criteria for inclusion. These include epidemiological benchmarks and an assessment of coronavirus containment measures, as well as ‘economic and social considerations’,” the FT says.
There is more good news on the vaccine front. Canada became the third country to approve the Pfizer-BioNTech vaccine after the UK and Bahrain. The United Arab Emirates said an interim analysis by its medical regulators found that a vaccine developed by Sinopharm of China was 86 per cent effective in combating the virus.
Also, not-so-good news. UK regulators warned that people with a history of severe allergic reactions should not take the Pfizer-BioNTech vaccine being administered by the NHS while some adverse reactions are investigated.
The US has acquired fewer vaccines than other countries because it has been slower to strike purchase deals with manufacturers, Bloomberg reports. On a per capita basis, Canada, Australia and the UK have secured the largest amount of the vaccine, while the US is 32nd on the list, behind the EU.
Just half of the initially promised shipment of 6.4 million doses will be made available in the US immediately, according to Gustave Perna, the army general overseeing distribution. The Food and Drug Administration’s vaccine advisory committee is due to meet today to assess the Pfizer vaccine, with approval possible shortly afterwards.
The US has reached another grim milestone – more than 3,000 deaths from Covid-19 reported on Wednesday, the highest daily toll since the pandemic began in the spring. But the US is not alone. Germany, which was considered to have tackled the first wave in exemplary fashion, reported a record 590 deaths on Wednesday, compared to just 12 a day at the end of September.
The soaring death toll prompted an unusually emotional reaction from Chancellor Angela Merkel. “Five hundred deaths a day is not acceptable,” she told MPs. German health officials want a strict lockdown imposed between 24 December and 10 January, including shutting all shops, and Merkel explicitly backs that move, Deutsche Welle reports.
WHAT ARE COMPANIES SAYING?
Cardboard maker DS Smith posted a 54% plunge in half-year profit, hurt by lower prices for boxes and weak industrial demand, although the company decided to resume dividend payment. The London-listed company said profit before tax for the continuing operations fell to £97 million for the six months ended 31 October from £213 million a year earlier, and declared an interim dividend of 4 pence per share.
FirstGroup this morning posted a narrowed loss for the first half of its fiscal year, although underlying performance was hit by the coronavirus pandemic. The FTSE 250 train-and-bus operator booked a net loss of £99.3 million for the six months ended 30 September, compared with £172.9 million loss a year earlier. The change was mainly driven by lower one-off costs.
Commodities trader Trafigura has fully bought out the family stake of its late founder Claude Dauphin after record earnings in 2020, boosted by pandemic-related volatility and a consolidating sector. Dauphin, who founded Trafigura with partners in 1993, had been on of Rich’s key lieutenants, along with Glasenberg, who has led Glencore for nearly 20 years. With the reimbursement complete, Trafigura has increased the number of its senior employee shareholders to 850 from 700.
Consumer & Retail
Asda has joined the growing number of retailers to announce they will not open on Boxing Day to give staff a break. The supermarket chain – acquired by the billionaire Issa brothers earlier this year – announced on Wednesday that it will close all 631 stores on Boxing Day, on top of Christmas Day, as a thank you to staff for their hard work through the pandemic. It usually operates for reduced hours the day after Christmas.
DWF, the Manchester-based law firm, expressed its pleasure with its interim figures for the six months to 31 October today, in the face of the coronavirus pandemic disruption. Revenues at the firm rose 15.4% to £167.6m, although pre-tax profits of £8m became an £11m pre-tax loss this year. The firm said this was due to significant, largely non-cash, acquisition-related expenses treated as non-underlying items.
Frasers Group reported this morning a rise in pretax profit for the first half of fiscal 2021 on lower costs. The sport-fashion company made a pretax profit of £106.1 million for the six months ended 25 October, compared with £90.2 million in the year earlier period. Profits were boosted by the reopening of stores after lockdown, growth in e-commerce, new stores, a full year of trade for prior-year acquisitions and continued operating efficiencies, the company said.
British pub operator Marston’s plc warned that winter months would be both challenging and uncertain with 780 of its pubs remaining closed after the fresh coronavirus-induced lockdown in November, as it posted an annual loss. The Wolverhampton, UK-based company said underlying pretax loss for the year ended 3 October was £22 million, compared with an underlying pretax profit of £95.1 million last year.
Ocado’s tie-up with Marks & Spencer and the boom in online shopping during lockdown continues to pay dividends for the grocer. In the quarter to November, sales jumped 35% to £580 million. There were 360,000 orders per week, a rise of 3%. The company says sales are now smoothing out compared to the peaks and troughs in shopping habits pre-COVID.
On The Beach
On The Beach swung to a pretax loss for fiscal 2020 as it suffered a collapse in holiday bookings amid the coronavirus pandemic. The British travel retailer made a pretax loss of £46.3 million for the year ended 30 September, compared with a pretax profit of £19.4 million a year earlier. The company said, after adjusting for coronavirus disruption and the failure of the Thomas Cook Group travel agent in September 2019, it would have made an adjusted pretax profit of £600,000.
Package tours giant Tui lost €3 billion this year after being devastated by COVID travel bans and lockdowns but said bookings were picking up strongly for next year. Holiday-starved families were already making reservations for May and summer 2021 at a faster clip than they were this time of year in pre-COVID 2019. Bookings for summer were up 3% on this time last year and 50% of the May 2021 programme is already filled, Tui said.
Financials & Real Estate
A leading housebuilder is considering reinstating its dividend after forecasting that profits will be at the top end of its expectations. Shares in Vistry rose by more than 5% at one stage yesterday after the construction company said in a trading update that it expected to report pre-tax profits for this year at the top end of its guidance of between £130 million and £140 million. Housebuilders are benefiting from a booming property market, which is defying the wider economic gloom.
DoorDash became the latest Silicon Valley firm to enjoy a blockbuster Wall Street debut as data showed that almost $300bn will be raised globally this year – the highest figure since the financial crisis. The food delivery firm’s shares soared to $189 in New York on Wednesday after being priced at just $102 on Tuesday. An avalanche of high-profile technology floats off the back of the newfound vaccine optimism is expected to tip the year in numbers not seen since the crash.
IN THE NEWS
Truckers given emergency hours extension as fears grow over chaos at ports – The Daily Telegraph