Powerscourt

By Powerscourt on 11/12/2020

Powerscourt Coronavirus Briefing – 11 December 2020

ANALYSIS

There is some good news from the US, despite overburdened hospitals, resistance to public health measures and record levels of infections and deaths. A panel of scientific advisers has recommended that the vaccine developed by Pfizer and BioNTech should be approved by the Food and Drug Administration.

Regulators in the UK, Canada and Bahrain have approved the Pfizer-BioNTech vaccine, and it is already being administered in British hospitals.  Now that the FDA – which considers itself the global benchmark for medicines regulation – has joined the fray, the rate of vaccination could speed up.

The panel is made up of scientists, statisticians and experts in infectious diseases.  They voted by 17 members to 4, with one abstention, to recommend that the FDA approve the vaccine for emergency use for people aged 16 and over.  The New York Times says formal approval could come as early as Saturday.  The FDA almost always acts on the recommendations of its scientific advisory panels.

As the NYT puts it: “The arrival of the first vaccines is the beginning of a complex, months-long distribution plan coordinated by federal and local health authorities, as well as large hospitals and pharmacy chains that, if successful, will help return a grieving and economically depressed country back to some semblance of normal, maybe by summer.”

The European Central Bank has increased its monetary policy response to the economic slump by €500 billion, bringing the package to €1.8 trillion, and EU member states have agreed a common budget of about the same size.  In Washington, talks on a €918 billion stimulus package inch along, though there are wide gaps between Republican and Democratic expectations of what is achievable in the last days of Donald Trump.

Sanofi and GlaxoSmithKline announced on Friday that their Covid-19 vaccine may not be available before the last quarter of 2021 because it failed in clinical trials to stimulate a sufficient immune response in elderly patients.  Both companies “said they were disappointed by the results of the early trials of the vaccine,” the Financial Times reports.

Australia’s CSL pharma company and the University of Queensland have abandoned work on a vaccine “after clinical trials ran into difficulties,” Bloomberg reports.  Prime minister Scott Morrison said Australia would begin mass vaccination at its own pace next year, and he contrasted the country’s successful suppression of virus with the situation elsewhere.  “Overseas, vaccination is the only thing they’ve got,” he said.

The French authorities are scrambling to overcome an entrenched anti-vaccine movement, which has been given added fuel by a film alleging that pharma companies are cutting corners in the pursuit of profit, the FT reports.  It quotes a sociologist saying France has “been rocked by this issue of vaccine hesitancy for the past 10 years.”

Amid the gloom, Asia offers some cheer.  In Manila, anybody whose driving licence was confiscated for driving offences during the pandemic will get an amnesty.  And in Melbourne, the state government of Victoria says 30,000 people a day can attend the Australia v India cricket match, which begins on Boxing Day in the MCG.

 

WHAT ARE COMPANIES SAYING?

Industrials

Rolls-Royce
British engineering company Rolls-Royce stuck to its guidance to turn cash flow positive during the second-half of next year, despite warning that the outlook remains challenging and the pace of the recovery is uncertain. The company, whose engines power Boeing 787s and Airbus A350s, has been hit by the travel slump during the pandemic and in November raised £2 billion from shareholders and took on £3 billion of debt to help it survive COVID-19. 

Volution Group
Earnings were significantly ahead of expectations during the first four months of its fiscal year, as its margin target was achieved earlier than expected, announced Volution Group this morning. The ventilation company reported revenue of £90.7 million for the four months ended 30 November, which represents organic growth of 6.8% at constant currency. In addition, Volution said its adjusted operating margin increased to the 20% target eight months earlier than projected. 

Consumer & Retail

Deltic
Britain’s biggest nightclub operator has filed a notice of its intention to appoint administrators before an expected sale of the group. Deltic, which runs 52 venues under such brands as Vinyl and Bar & Beyond, appointed BDO to run a sale process in October in an attempt to save it from collapse. The group has not been able to reopen its venues since the March lockdown and has received only modest support from the government.

Royal Mail
Delays at Royal Mail and turmoil in the ports threaten to cause chaos for deliveries of millions of Christmas gifts. Royal Mail bosses have warned that strict COVID rules and swathes of self-isolating staff have left the firm struggling to deal with exceptionally high volumes of parcels following an online shopping boom. The company is now telling customers they may face “slightly longer delivery timescales” and disrupted services.

 

Financials & Real Estate 

BDO Global
One of Britain’s top accountancy firms is to pay its partners an average of £518,000 each despite receiving furlough money from the government in the early stages of the pandemic. BDO revealed that the annual payout to its 264 partners amounted to £137 million and that it has decided to hold on to the public money it received this year of between £4 million and £4.5 million. BDO is Britain’s fifth-largest professional services firm after its merger last year with Moore Stephens.

Bellway 
Housebuilder Bellway plc this morning forecast a 25% rise in annual volumes, saying home orders rose in the first few months of its fiscal year, as a temporary tax cut for buyers and a government assistance scheme boosted demand. The company, which builds everything from one-bedroom apartments to six-bedroom family homes and luxury penthouses, said its forward order book rose 18.7% to £1.77 billion in the 17 weeks from 1 August to 29 November.

Foxtons Group
Foxtons Group announced this morning that it now expects to swing to adjusted operating profit for 2020 and that it has launched a £3 million share-buyback program. The UK estate agent’s revenue in October and November was £14.8 million, up 2% year-on-year. Within this, sales revenue rose by 11% to £5.4 million as its sales pipeline converts into exchanges at a faster pace, though lettings revenue fell 1% to £8 million on the back of a decline in average rent, it said. 

 

IN THE NEWS

Raab denies claims from Tesco that food prices will rise – The Daily Telegraph

Recovery was already in slow lane before second lockdown – The Times

Vaccine rollout highlights the benefits of globalisation – The Daily Telegraph

 




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