21st May 2020 08:09
(Alliance News) - Premier Inn-owner Whitbread said Thursday it delivered a "resilient" full-year result as it announced plans to raise GBP1 billion via a fully underwritten rights issue.
For the year to February 27, the hospitality firm's revenue rose 1.1% to GBP2.07 billion and pretax profit was up 28% to GBP280 million. This increase in profit was largely due to separation costs incurred in the prior year from the disposal of the Costa coffee-shop business.
Adjusted pretax profit fell by 8.2% to GBP358 million due to a weaker UK travel market, high industry-wide inflation, and the start-up of German operations, the company said.
"Whitbread delivered a resilient financial performance in FY20 in line with expectations, against a backdrop of low UK business and consumer confidence which particularly impacted the regional hotel market. The commercial initiatives we implemented during H1 helped drive a particularly strong end to the year, when we were trading ahead of the market and achieving very strong guest scores," said Chief Executive Alison Brittain.
She continued: "However, the period after the year-end has been dominated by the impact of the rapidly evolving Covid-19 pandemic. In response, the business took rapid and decisive action to protect our teams and our guests, and to secure our business to ensure that we will be in the best possible position to rebound strongly."
Whitbread said its UK hotels are ready to open when the government advises, with the company's internal scenario assuming that hotels are closed, or at low levels of occupancy, until September. German hotels reopened on May 11.
The FTSE 100 constituent said it had "significant" liquidity entering the new financial year and Covid-19 crisis, but it now intends to raise GBP1.01 billion via a fully underwritten rights issue to provide a platform for future growth and investment.
"The purpose of the rights issue is to ensure that Whitbread emerges from the Covid-19 pandemic in the strongest possible position to take advantage of its long-term structural growth opportunities and win market share in both the UK and Germany," said Whitbread.
The stock was down 9.5% early Thursday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.8% at 6,016.61
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Hang Seng: down 0.5% at 24,285.53
Nikkei 225: closed down 0.2% at 20,552.31
DJIA: closed up 369.04 points, 1.5%, at 24,575.90
S&P 500: closed up 1.7% at 2,971.61
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GBP: down at USD1.2194 (USD1.2266)
EUR: soft at 1.0962 (USD1.0992)
Gold: down at USD1,737.70 per ounce (USD1,747.30)
Oil (Brent): up at USD36.31 a barrel (USD35.52)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Thursday's Key Economic Events still to come
Switzerland Ascension Day. Financial markets closed. Markets open in France and Germany.
0930 BST UK CIPS-Markit flash manufacturing and services PMI
1100 BST UK CBI industrial trends survey
1100 BST Ireland labour force survey
1000 CEST EU eurozone flash PMI
0930 CEST Germany flash PMI
0830 EDT US initial jobless claims
0945 EDT US flash manufacturing PMI
0945 EDT US flash services PMI
1000 EDT US leading indicators
1000 EDT US existing home sales
10:0 EDT US EIA weekly natural gas storage report
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Nicola Sturgeon will reveal Thursday how Scotland could begin the "gradual process" of easing coronavirus restrictions. While other parts of the UK have already started to loosen the lockdown, which was introduced back in March, the Scottish government has so far taken a more cautious approach. The first minister however will outline to MSPs a four-phase plan for moving out of the current state of lockdown. Sturgeon has already said restrictions could start to be eased from May 28, when the lockdown is next due for review – but only if measures to suppress Covid-19 continue to be successful. Figures published on Wednesday showed Scotland's weekly coronavirus death toll had fallen for the third week in a row, with National Records of Scotland revealing there were 332 deaths relating to the disease registered between May 11-17.
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BROKER RATING CHANGES
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RBC CUTS EXPERIAN TO 'SECTOR PERFORM' ('OUTPERFORM') - PRICE TARGET 2700 (2500) PENCE
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CREDIT SUISSE RAISES DRAX GROUP TO 'OUTPERFORM' (NEUTRAL) - PRICE TARGET 305 (325) PENCE
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BERENBERG INITIATES CAPITAL DRILLING WITH 'BUY' - TARGET 77 PENCE
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COMPANIES - FTSE 100
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AstraZeneca said it is collaborating with a number of countries and organisations to make the University of Oxford's Covid-19 vaccine widely accessible, having secured its first commitments. The pharmaceutical company has concluded the first agreements to supply at least 400 million doses and has secured total manufacturing capacity for one billion doses so far and will begin first deliveries in September 2020. ChAdOx1 nCoV-19, now known as AZD1222, was developed by Oxford University's Jenner Institute. AstraZeneca has now finalised its licence agreement with Oxford University for the recombinant adenovirus vaccine. AstraZeneca has received support of more than USD1 billion from the US Biomedical Advanced Research & Development Authority for the development, production and delivery of the vaccine, starting in the autumn. "A Phase I/II clinical trial of AZD1222 began last month to assess safety, immunogenicity and efficacy in over 1,000 healthy volunteers aged 18 to 55 years across several trial centres in southern England," AstraZeneca said. "Data from the trial is expected shortly which, if positive, would lead to late-stage trials in a number of countries. AstraZeneca recognises that the vaccine may not work but is committed to progressing the clinical program with speed and scaling up manufacturing at risk."
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Aviva has estimated it will pay GBP160 million in Covid-19 claims in its general insurance businesses. The insurer said it made a strong start to the year, with life new business sales up 28% to GBP12.3 billion and general insurance net written premiums up 3% to GBP2.4 billion. Aviva said it is still in the early stages of claims development regarding Covid-19, and so the impact on the firm still has a "high level" of uncertainty. However, based on analysis as at April 30, Aviva estimates Covid-19 related claims in its general insurance businesses are GBP160 million net of reinsurance. This is based on estimated claims in business interruption insurance, other commercial lines and travel insurance, Aviva said. "The economic outlook remains uncertain and will affect our business, however the strength of our capital and liquidity means we are well positioned to manage this crisis and continue to support our customers," said Chief Executive Maurice Tulloch.
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easyJet said it will resume flights in mid-June with new biosecurity measures in place. A small number of flights will restart on June 15 on routes where the airline thinks there is "sufficient customer demand to support profitable flying". The initial schedule will comprise mainly domestic flying in the UK and France. easyJet will require customers, cabin and ground crew to wear masks, and easyJet will carrying out "enhanced" cleaning of aircraft. "I am really pleased that we will be returning to flying in the middle of June. These are small and carefully planned steps that we are taking to gradually resume operations. We will continue to closely monitor the situation across Europe so that when more restrictions are lifted the schedule will continue to build over time to match demand," said Chief Executive Johan Lundgren.
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COMPANIES - FTSE 250
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Pets at Home said "exceptional" fourth quarter demand helped to boost annual profit ahead of expectations. However, Covid-19 has depressed activity at the start of the new financial year. Like-for-like revenue growth was 9.0% in the financial year to March 26, with revenue up 10% on a reported basis to GBP1.06 billion, exceeding the GBP1 billion mark for the first time. Pretax profit surged to GBP85.9 million, up from GBP49.6 million the year before, the pets product retailer said. However, "nearly all" of the exceptional demand witnessed in the closing weeks of the final quarter has unwound during the first quarter of the current year which, combined with social distancing across its operations and restrictions on the sale of pet products and services deemed non-essential, has temporarily depressed normal levels of group turnover, Pets At Home said. Online sales have been good, but have been unable to mitigate the reduced level of in-store sales, it said. "Accordingly, we anticipate H1 FY21 group pretax profit, including both the one-off benefit from the business rates holiday, which will be utilised to partially mitigate the estimated financial impact of Covid-19 this year, as well as additional operating costs related to social distancing, to be materially below the prior year," said Pets at Home.
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COMPANIES - GLOBAL
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Intel Corp acquired Rivet Networks for an undisclosed sum. Rivet Networks manufactures network interface cards, which is found in laptops, that serve to provide gaming features including minimising latency and prioritising network traffic for gameplay and other applications when needed. Intel said that the acquisition will complement its existing Wi-fi products, and Rivet's team will join Intel's Wireless Solutions Group within the Client Computing Group. In addition, Rivet's Networks's key products, including its Killer brand of network interface cards will be integrated into Intel's broader PC Wi-fi portfolio.
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Thursday's Shareholder Meetings
Lloyds Banking Group
Intertek
Jupiter Fund Management
Prudential
Enquest
Avast
Keller Group
Essentra
Hastings
Polypipe Group
Resolute Mining
Hochschild Mining
Aura Energy
Bigblu Broadband
Kape Technologies
Energean Oil & Gas
Riverstone Credit Opportunities Income
indigovision
Surface Transforms
Inchcape
Legal & General
QinetIQ
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By Tom Waite; [email protected]
Copyright 2020 Alliance News Limited. All Rights Reserved.
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