Powerscourt

By Powerscourt on 22/01/2021

Powerscourt Coronavirus Briefing – 22 January 2021

ANALYSIS

One of Joe Biden’s first public pronouncements as US president was to warn that the country’s death toll from the COVID-19 pandemic is on course to exceed 500,000 by next month.

In a 200-page national pandemic strategy, the US President outlined a number of measures aimed at combatting the virus. These include invoking the US Defense Act to ramp up the production of vaccines, protective clothing for frontline medics and syringes needed to extract the vaccine from vials. The strategy also includes the compulsory wearing of masks on interstate travel, international travel and in all federal buildings, as well as significantly increasing test and trace capacity.

However, in possibly one of the shortest political honeymoons ever, Biden’s strategy has already come under fire for its lack of ambition. An analysis piece in the New York Times criticises the administration’s target of vaccinating 100 million people in the first 100 days of the presidency. The US is already inoculating one million people each day, so this target does not represent any increase. Moreover, the B117 strain of the virus could become the dominant source of COVID-19 by March, which will accelerate the rate of infection. Furthermore, the lack of manufacturing capacity in the US means that it will be April before there will be any increase in supply.

Dr Anthony Fauci, who was consistently undermined as the country’s top infectious disease doctor by the Trump Administration, has found a new lease of life. He announced on Thursday that the US would re-join the World Health Organisation and participate in global efforts to roll out vaccines. In a potentially significant boost, he also announced that Johnson & Johnson had enough data from its phase III trials to start data analysis – raising hopes that it could seek emergency authorisation in the next couple of weeks. As it stands, the US has only authorised two vaccines – Pfizer/BioNTech and Moderna, both of which require two jabs and must be stored in freezing temperatures. The Johnson & Johnson vaccine is a single dose and can be stored at room temperature.

The UK government is considering plans to pay £500 to each person who tests positive for coronavirus as part of plans to improve self-isolation rates. There is ample anecdotal evidence that financial hardship is forcing people to return to work even after a positive test. The government has also said that it could be May at the earliest before the hospitality sector opens.

A number of government ministers claimed that the UK’s first mover status in the authorisation of vaccines was only possible because it had left the EU. The 27 member states have agreed to a centralised vaccination program through authorisation by the European Medicines Agency with the Commission responsible for the purchase of jabs. However, Hungary has broken ranks and given preliminary authorisation to the Russian vaccine Sputnik V as well as the Oxford/AstraZeneca jab. The EMA is not expected to greenlight the Oxford vaccine until next week while Sputnik V is still in discussions with the European Medicines Agency.

Asian markets retreated from record highs as investors took profits following record highs posted over the past week. Sentiment was also hit by the rise in the rate of infection in China which has prompted the Government to impose new restrictions.

 

WHAT ARE COMPANIES SAYING?

Biomedical

Mediclinic International plc
The diversified international private healthcare services group Mediclinic, provides its third quarter trading update this morning. The Group has effectively navigated the COVID-19 pandemic, commencing government-led vaccination programmes at Hirslanden and Mediclinic Middle East. Unseasonably high inpatient activity in December 2020 at the Group’s South African and Middle Eastern divisions, has resulted in a 2.5% growth in Q3 revenue. Although the Group is aware of the effect pandemic-related uncertainties will have on activity levels, the pandemic has highlighted the global demand for quality healthcare services and it will continue to focus on several strategic projects such as virtual care solutions. 

 

Consumer & Retail

TheWorks.co.uk plc 
The multi-channel value retailer of gifts, arts, crafts, toys, books and stationary, announces today its H1 FY21 results and an update on current trading. The Works’ revenue declined 7.8% on H1 FY20, due to the enforced temporary closures of retail stores for the first 7 weeks of the period. However, LFL sales did increase 10.6% and year on year liquidity has improved with net cash at Period end of £11.3 million. The Works accelerated the development of its online proposition which included launching a new web platform and significantly increasing fulfilment capacity. Gavin Peck, CEO of The Works commented “Our interim results and trading over the crucial Christmas period reflect a robust performance given the impact of store closures as a result of Government restrictions.” 

John Lewis Partnership plc
One of the UK’s leading omni-channel retailers John Lewis, announces this morning the early repayment of the £300 million HM Treasury and Bank of England Covid Corporate Financing Facility. The repayment was due on 15 March 2021, however the Partnership believes it has sufficient liquidity going forward. Although John Lewis stores were forced closed for several months in 2020, trading during peak periods, including Black Friday and Christmas, has offset these closures leaving the Partnership in a better position than originally anticipated. As a result, full-year profits are expected to be ahead of the guidance provided at half-year results in September.

MySale Group plc 
International online retailer MySale, provides today a trading update for the six-month period to 31 December 2020. The Company continues to execute its “ANZ First” strategy – intended to simplify and refocus the business. This change in MySale’s operating model has resulted in a 14% YoY revenue increase to AS$63.3 million. Group EBITDA for the half year is trading ahead of management expectations at A$2.5 million. The impact of the COVID-19 pandemic has been less severe in Australia and New Zealand compared to other countries, however the broader consumer and economic outlook still remains uncertain. Despite this uncertainty, the Group has a robust balance sheet and is operating on a cash generative and debt free basis. 

Financials & Real Estate 

Record PLC
The specialist currency manager Record announces today its third quarter trading update, reporting a growth in assets under management equivalents (AUME) of 13%. The Group’s AUME as at 31st December 2020 totaled £54.6 billion, a growth of 7% compared to the same period last year. Chief Executive of Record plc Leslie Hill commented “Our business continues to grow and to prove its resilience through challenging market conditions, and we remain focused on maintaining this momentum whilst achieving the efficiencies and scalability offered through our ongoing investment in technology.” 

 

TMT

Kainos Group plc
Digital Services and Workday Practice specialist IT provider Kainos, issues today a trading update for the period from 16 November 2020 to date. Due to a strong trading performance, full year results are expected to be ahead of current market consensus expectations. The Company’s Digital Services division has been working on a long-term engagement with the UK government, which currently includes supporting the NHS with its response to the COVID-19 pandemic. Although aware of the challenges caused by the pandemic and EU Exit, Kainos is well-positioned for further growth due to a robust pipeline, strong balance sheet and significant contracted backlog. 

Computacenter plc
Computacenter, a leading independent technology partner, publishes today a trading update based on preliminary unaudited financial information for the year ended 31 December 2020. Due to continued positive trading, the Group announces  adjusted profit before tax for the year is expected to be in excess of £195 million. Strong growth has been seen in Technology Sourcing product sales into the public sector and services based customer as opposed to customers in the manufacturing and industrial sectors where spend slowed materially. Trading has maintained good momentum since the start of the pandemic and shows no sign of slowing down. 

IN THE NEWS

Experts back lateral flow Covid tests after claims of inaccuracy – The Times

UK consumer spending falls sharply as lockdown bites – Financial Times

Cash for Covid: £500 payment for positive test considered by ministers – The Telegraph




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