24th Sep 2020 08:10
(Alliance News) - Mitchells & Butlers on Thursday said its pub chain is "well placed" to cope with further restrictions on operations in the UK.
Since re-opening, the company said it has continued to outperform the market. In July, like-for-like sales declined by 32%, hit by reduced capacity. During August, however, the government's 'Eat Out to Help Out' scheme helped return the business to like-for-like sales growth, of 1.4%.
Subsequent trading in the first three weeks of September has settled "slightly below this" at a like-for-like sales decline of 6.4%, prior to the introduction of a 10pm pub curfew in England from Thursday onwards.
"The future remains both challenging and uncertain, with only this week a curfew and other additional restrictions being imposed on how and when we can operate. However, we believe we are well placed to meet that challenge and to keep Mitchells & Butlers at the forefront of the eating and drinking-out market," said Chief Executive Phil Urban.
The UK on Wednesday reported 6,178 new coronavirus cases, a marked jump in the daily infection rate that comes a day after Prime Minister Boris Johnson unveiled new nationwide restrictions.
It follows a rise of 4,926 the day before, and brings the total confirmed cases in Britain since the pandemic hit earlier this year to 409,729. With a further 37 deaths reported in the past 24 hours, 41,862 people in Britain who tested positive for the virus have now died – the highest toll in Europe.
On Tuesday, Johnson set out plans to close pubs early and reverse previous guidance that people should go back to the office, warning the country was at "a perilous turning point".
Mitchells & Butlers shares were down 4.4% early Thursday.
Here is what you need to know at the London market open:
----------
MARKETS
----------
FTSE 100: down 1.0% at 5,840.26
----------
Hang Seng: down 1.8% at 23,304.78
Nikkei 225: closed down 1.1% at 23,087.82
DJIA: closed down 525.05 points, 1.9%, at 26,763.13
S&P 500: closed down 2.4% at 3,236.92
----------
GBP: down at USD1.2697 (USD1.2755)
EUR: down at USD1.1653 (USD1.1685)
Gold: down at USD1,851.76 per ounce (USD1,868.00)
Oil (Brent): down at USD41.39 a barrel (USD42.16)
(changes since previous London equities close)
----------
ECONOMICS AND GENERAL
----------
Thursday's Key Economic Events still to come
1100 BST UK CBI distributive trades survey
1000 CEST Germany Ifo business climate index
0830 EDT US weekly initial jobless claims
1000 EDT US new residential sales
1000 EDT US Treasury secretary and Fed chair testify to Senate committee
1030 EDT US EIA weekly natural gas storage report
----------
UK Chancellor of the Exchequer Rishi Sunak will outline his plans to protect jobs on Thursday as the opposition insisted more needed to be done to bolster the economy in the wake of the Covid-19 crisis. Sunak will address the Commons after cancelling this year's Budget. With the furlough work scheme due to finish at the end of October, he will announce measures aimed at protecting millions of jobs in sectors hit by the latest government guidance on Covid-19. As the number of new cases rose by more than 6,000, new restrictions came into force in England on Thursday, and the much-delayed coronavirus contact tracing app was finally launched. Sunak's intervention comes after increasing pressure from business groups, MPs and unions to extend the furlough scheme amid fears the new restrictions will damage the economy. Number 11 said work on the scheme had been taking place in parallel with Budget preparations with a focus on jobs to avoid the expected three million unemployed.
----------
A coronavirus contact tracing app is launching across England and Wales on Thursday in what the Health Secretary has called "an important step forward" in our fight against the "invisible killer". The rollout follows months of delay and questions about its effectiveness in the face of mixed results from other countries which have already deployed such apps. NHS Test and Trace, which is responsible for the service, said the app was used to send alerts to users during a trial period on the Isle of Wight and in the London borough of Newham, after people had tested positive. The latest version was piloted among residents of both areas as well as NHS volunteers from mid-August, after the first app was marred by technical issues and eventually scrapped.
----------
US President Donald Trump declined to fully commit to a peaceful transfer of power following the November election, during a briefing Wednesday at the White House. "We're gonna have to see what happens," Trump said in response to a question from a reporter about ensuring a peaceful handover. The reporter had asked the president: "Win, lose or draw in this election, will you commit here today for a peaceful transferral of power after the election?" After a long-winded response, Trump pushed back, saying there could be a "continuation" of power. First he said: "We're going to have to see what happens." Then Trump added: "There won't be a transfer, frankly. There will be a continuation." Trump has been indicating he might seek to challenge the election results in court, a course of action taking on new meaning as he now prepares to swiftly fill a Supreme Court vacancy created by the death of Ruth Bader Ginsburg last week.
----------
BROKER RATING CHANGES
----------
MORGAN STANLEY RAISES ANTOFAGASTA TO 'EQUAL-WEIGHT' ('UNDERWEIGHT') - PRICE TARGET 1,030 (760) PENCE
----------
BERENBERG INITIATES RENISHAW WITH 'BUY' - TARGET 5,700 PENCE
----------
JPMORGAN RAISES CENTRICA TO 'OVERWEIGHT' ('NEUTRAL') - TARGET 60 (75) PENCE
----------
COMPANIES - FTSE 100
----------
Smiths Group said it achieved a "robust" performance for the financial year which ended July 31. Revenue from continuing operations for the year was up 2% to GBP2.55 billion, though down 1% on an underlying basis. Pretax profit more than halved to GBP133 million, however, from GBP304 million the year before. Smiths Group said profit was hit by lower volumes in the second half as well as additional costs to support business continuity, and the firm also took GBP31 million in restructuring costs and GBP24 million of write-downs. The defence and medical technology company said its guidance remains withdrawn given Covid-19 uncertainty, though it said total group underlying revenue for the four months to the end of August has stabilised at a 5% fall, or down 8% for continuing operations. "We are seeing a stabilisation of recent trends; but we are not complacent and are continuing to strengthen the business to deliver sustainable outperformance in the future," said Chief Executive Andy Reynolds Smith.
----------
United Utilities said trading is in line with expectations for its half-year. For the first half to September 30, the water company said its operating performance is on track again its AMP7 plan, and it continues to target net outcome delivery incentive outperformance for the full year. Cash collection from household customers has been consistent with targets set prior to Covid-19 pandemic. While United Utilities anticipates bad debt may increase as government support schemes come to an end, it has "confidence in the adequacy of the provision we made" at the March 2020 year-end. Group revenue is expected to be lower than the first half of last year, while underlying operating profit is also expected to be down year-on-year.
----------
COMPANIES - FTSE 250
----------
Movie house chain Cineworld swung to a chunky loss in the first half of the year as Covid-19 shuttered its sites between mid-March to summer. Admissions were down 65% in the first half of 2020, with revenue down 67% to USD712.4 million from USD2.15 billion a year ago. Cineworld posted a pretax loss of USD1.64 billion versus a profit of USD139.7 million a year prior. The cinema operator said 561 out of 778 sites are re-opened currently, and it has been "encouraged" by its recent performance. It noted a "good" performance of the film Tenet earlier this month, and named 'Wonder Woman 1984', 'Black Widow' and the latest James Bond instalment 'No Time To Die' as some of the "exciting" films coming up in 2020. However, Cineworld added: "There can be no certainty as to the future impact of Covid-19 on the group. If governments were to strengthen restrictions on social gathering, which may therefore oblige us to close our estate again or further push back movie releases, it would have a negative impact on our financial performance and likely require the need to raise additional liquidity. However, we are well prepared operationally for all possible eventualities and continue to monitor for any potential changes to government restrictions or guidelines." Cineworld said negotiations with banks remain ongoing in order to secure covenant waivers in respect of December 2020 and June 2021.
----------
Greggs has temporarily closed down one of its manufacturing facilities in Newcastle after staff tested positive for Covid-19, Sky News reported. However, the baker and retailer insisted that supplies of its goods would be unaffected. It noted that although production had been halted at the facility in Balliol, it had a large reserve of frozen stock which would ensure supplies reach its 1,700 shops around the UK. "Following a small number of colleagues having tested positive for Covid-19 at our Balliol manufacturing facility, we have taken the decision to temporarily stop production as a precautionary measure to keep our teams as safe as possible," a spokesperson said.
----------
Thursday's Shareholder Meetings
Kainos Group
Alcentra European Floating Rate Income Fund
Securities Trust of Scotland
Sure Ventures
Triad Group
Versarien
Shearwater Group
Vertu Capital
Premier Veterinary Group - GM re acquisition and delisting
British & American Investment Trust
Caffyns
Miton Global Opportunities
Securities Trust of Scotland
----------
By Tom Waite; [email protected]
Copyright 2020 Alliance News Limited. All Rights Reserved.
Related Shares:
Mitchells & ButlersCentricaRenishawAntofagasta