Powerscourt

By Powerscourt on 16/01/2021

Powerscourt Coronavirus Briefing – 16 January 2021

ANALYSIS

Paying the price for festive mingling as hospitals grapple with the latest wave.

At the Government’s news conference last night there was a somewhat consistent message: vaccines and lockdown are helping but we are far from in the clear.

With the UK’s hospitals in a desperate situation, Johnson doubled down on tougher restrictions at the borders. From Monday, all international arrivals into the UK must provide a negative COVID-19 test and quarantine for 10 days, standard in other parts of the world for at least 6 months now. Cue a surge of influencers “working in Dubai” rushing back to avoid quarantine. However, scientists have warned that with tougher restrictions must come tougher enforcement, arguing that the UK’s policy of trusting people to quarantine was not strong enough. “We will be stepping up our enforcement, both at the border and in country,” Johnson said.

Johnson also took a moment to congratulate himself on the progress of the Government’s mass vaccination effort. He reported that almost 3.3 million people had received a jab, including 1.3 million people over 80 and 100,000 care home residents. Only 11.7 million to go to reach his target of 15 million by mid-February.

Cases remain at an extremely high level with the number of new COVID-19 cases increasing by 55,761 on Friday, and a further 1,280 people reported to have died within 28 days of testing positive.

Chris Whitty said, however, there was early evidence that in some areas the virus seems to have seen its peak, largely thanks to the restrictions put in place, particularly in the south-east, east of England and London. He added, “Other areas that went into lockdown a bit later, that peak will be a bit later.”

In terms of lockdown though, we will not be seeing a lift of restrictions anytime soon, despite reports yesterday that the UK is edging towards a double-dip recession. The Office for National Statistics reported that GDP had fallen by 2.6% month-on-month in November (due to the second lockdown), ending six consecutive months of growth over the summer.

There is some good news for small businesses, however, as the Supreme Court ruled in their favour yesterday and insisted insurance companies do indeed have to pay out an estimated £1.2 billion in business disruption policies. In a victory for the Financial Conduct Authority and policyholders, Britain’s highest court dismissed appeals and ruled that policies which provide pay-outs for disease, denial of access to business premises and hybrid clauses must do so for the government-imposed lockdowns.

Across the pond, President-elect Joe Biden gave a speech yesterday announcing plans to ramp up the current vaccination drive in the US while calling Trump’s current one a “dismal failure”. Biden plans on setting up thousands of vaccinations centres across the country, even recruiting retired doctors to administer the shots.

So far more than 390,000 people have died from COVID-19 in the US and Biden’s team state the toll could reach 500,000 by February.

Elsewhere, India is reported to have begun its vaccine roll-out, aiming to administer 300 million jabs by August.

 

WHAT ARE COMPANIES SAYING?

Industrials & Transport 

Norwegian Air Shuttle ASA
The Norwegian low-cost airline’s prospectus for its rescue fund-raising has revealed the depths of the company’s crisis, with warnings that the carrier could be in liquidation within weeks. Norwegian has abandoned its long-haul operations, with the loss of 1,100 jobs at Gatwick. The carrier is to reboot as a Scandinavian low-cost operator if it gets through its emergency recapitalisation. However, filings with the Oslo stock exchange for the raising of a £430 million lifeline paint a bleak picture. The airline said that it was “of the opinion that the working capital available . . . is not sufficient for the company’s present requirements, for the period covering at least [the next] 12 months. The company estimates that it will no longer have sufficient working capital during the first or second quarter of 2021.”

 

Consumer & Retail

Pentland Group
The British privately-owned global company has halved its dividend despite a jump in sales. Pentland Group’s accounts reveal that sales increased by 27.5 per cent to £6.4 billion in the year to end of 2019, helped by record results at JD Sports. Pre-tax profits inched 2.7 per cent higher to £369.1 million. However, it reduced its dividend to its family shareholders from £48 million to £24.7 million in 2019. Stephen Rubin, 83, Pentland’s chairman, said that as the coronavirus pandemic emerged, the group’s cashflow had been helped by the decision to not pay a final dividend for the year. The businessman said of the Covid-19 pandemic: “It is a human tragedy of immense proportions and one that will require us to think long and hard about how we can best contribute to the rebuilding of our society, economy and local communities. Many of our businesses have had to refocus their priorities to deal with the scale of economic slowdown during the crisis and business remains challenging.”

 

Financial & Real Estate

The Blackstone Group Inc.
The American private equity alternative investment management firm is reportedly closing in on a deal to buy the owner of Butlins, the holiday park. Blackstone is said to be in exclusive talks to invest about £900m in Bourne Leisure, the privately owned company that also owns the Haven holiday chain, Warner Leisure Hotels and dozens of caravan parks. Bourne is Britain’s biggest leisure firm and employs about 14,000 staff at peak seasonal periods, attracting more than 4m families a year before the pandemic struck. Talks are continuing but not thought to be at an advanced stage, meaning a deal may not be announced imminently, according to the Telegraph. “Blackstone is probably thinking of what has a chance of a good comeback after the pandemic and Bourne Leisure has always been a company with a strong balance sheet,” an insider said. 

 

IN THE NEWS

All UK travel corridors to close on Monday to stop new Covid variants – The Times

CDC warns more infectious Covid-19 variant could dominate US by March – Financial Times

Exclusive: Over-70s to get Covid vaccine invitations as jabs rollout ramped up – The Telegraph




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