19th Mar 2020 11:16
(Alliance News) - The following is a summary of top news stories Thursday.
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COMPANIES
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Burberry Group said its sales have "deteriorated" sharply over the past six weeks as the luxury retailer feels the hurt from the Covid-19 pandemic. Comparable retail stores sales are tracking between 40% and 50% lower since January 24, Burberry explained. Back in February, Burberry reported 24 of its 64 stores on the Chinese mainland were closed, with the remaining stores experiencing a significant decline in footfall. Burberry said on Thursday: "While trading in mainland China has started to improve with the reopening of most of our stores, sales in Europe, the Middle East, India, and Africa and the Americas have fallen materially in recent weeks. More than 60% of our stores in EMEIA and around 85% of our stores in the Americas are currently closed with those still open operating with reduced hours and with very weak footfall.
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Next reported a rise in full-year sales, helped by double-digit growth in its online unit but said that, due to the Covid-19 health crisis, it will not declare a final payout but will instead propose a second interim dividend in June. The retailer said its current plan is to declare an interim payout of 116.5 pence per share. Earlier in the year ended January, Next made a first interim payout of 57.5p per share, a 4.5% year-on-year rise. Pretax profit during the recent year rose 2.0% to GBP748.5 million from GBP733.6 million. Excluding IFRS 16, an accounting rule governing the financial treatment of leases, pretax profit edged 0.8% higher to GBP728.5 million from 722.9 million. Turning to sales, online growth helped Next post a 3.3% rise to GBP4.36 billion from GBP4.22 billion.
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Ocado Group said it has had to take a number of actions, including closing its website, as people turn to online shopping amid the Covid-19 pandemic. In the 13 weeks to March 1, Ocado Retail, the online supermarket's joint venture with retailer Marks & Spencer Group, delivered 10% retail revenue growth to GBP441.2 million, meeting expectations. Average orders per week rose 10% to 343,000 and the average order size was 0.3% higher at GBP110.24. Since late February, however, there has been a surge in demand and an increased basket size as customers change shopping habits amid Covid-19. Guidance for Ocado Retail in the firm's year ending December 1 is unchanged at retail revenue growth of 10% to 15%. However, Ocado has assumed a lot of forward buying has occurred and that "there may be further disruptions ahead".
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Deutsche Lufthansa reported moderate revenue growth in 2019 but a drop in profit and warned its earnings will take hit from coronavirus in 2020. The German airline said revenue in 2019 grew by 2.5% to EUR36.42 billion from EUR35.54 billion a year earlier, but pretax profit fell by a third to EUR1.86 billion from EUR2.78 billion. Profit was hurt by increased staff costs, which were up 3.5% to EUR9.12 billion from EUR8.81 billion the year earlier, while materials and services expenses grew 7.9% to EUR19.83 billion from EUR18.37 billion. Lufthansa said it will not be paying a dividend for 2019, having paid an EUR0.80 per share payout a year ago. The company said that its 2019 performance was marked by the economic downturn in its home market and tough competition on European short-haul routes, especially in Germany and Austria.
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MARKETS
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London shares were lower despite the European Central Bank's launch of a EUR750 billion emergency bond purchase scheme. The pound continued its historic fall against the dollar - sitting at 35-year lows - amid fears the UK government is considering a partial lockdown in London to stem the spread of the coronavirus. Wall Street was set for a lower open with major stock indices pointed down 0.8% to 1.7%.
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FTSE 100: down 1.0% at 5,027.97
FTSE 250: down 3.1% at 12,603.86
AIM ALL-SHARE: down 1.2% at 582.35
GBP: down at USD1.1521 ((USD1.1755)
EUR: down at USD1.0804 (USD1.0840)
GOLD: down at USD1,478.16 per ounce (USD1,491.90)
OIL (Brent): up at USD26.50 a barrel (USD26.08)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Western powers said they were on a war footing against the coronavirus as they unleashed nearly USD1 trillion to rescue the global economy, with Italy reporting the highest single-day death toll of the pandemic. The spiralling crises in Europe, the US and other countries contrast sharply with the improving situation in China. China on Thursday reported zero new domestic cases for the first time since the outbreak first erupted in the central city of Wuhan in December. But for most other places around the world, the pandemic was worsening quickly with the number of infections climbing above 200,000 and confirmed deaths nearing 9,000.
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The European Central Bank on Wednesday unexpectedly said it would spend EUR750 billion on "emergency" bond purchases, as it joined other central banks in stepping up efforts to contain the economic damage from the coronavirus. The so-called Pandemic Emergency Purchase Programme comes just six days after the ECB unveiled a big-bank stimulus package that failed to calm nervous markets, piling pressure on the bank to open the financial floodgates. The USD820-billion scheme to buy additional government and corporate bonds will only be concluded once the bank "judges that the coronavirus Covid-19 crisis phase is over, but in any case not before the end of the year," the ECB said in statement.
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UK Prime Minister Boris Johnson was adamant he would not ask for an extension to the Brexit transition period despite the mass disruption caused by the coronavirus pandemic. The prime minister insisted there will be no delay past the end-of-year deadline, even though trade negotiations scheduled for this week had to be cancelled. However, regardless of the disruption, the UK and the EU did exchange draft legal texts for the future relationship on Wednesday evening. Britain was understood to have shared a negotiating document detailing a desired free trade agreement, plans for aviation safety and a civil nuclear agreement.
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Dozens of stations on the London Underground network could be closed from Thursday following the outbreak of Covid-19. Up to 40 stations which do not interchange with other lines could be closed, while the Waterloo and City line and Night Tube services will not run from Friday. Buses in the capital will be reduced and people are being urged "not to use public transport for anything other than essential journeys".
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The Republic of Ireland faces significant job losses and an economic shock due to the Covid-19 pandemic, the finance minister has said, as he introduced a suite of measures to help bank customers. Paschal Donohoe was speaking as Irish banks agreed on Wednesday to introduce a payment break of up to three months for customers who cannot pay their mortgage. The payments were announced following a meeting of the Republic's five main banks, and their representative group the Banking & Payments Federation Ireland. AIB, Bank of Ireland, KBC, Permanent tsb and Ulster Bank, said they would work together to ensure that continuity of service plans are in place for customers.
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Early signs of the scale of the damage to the German economy wrought by the coronavirus crisis are likely to emerge on Thursday when the Munich-based Ifo institute releases key data from its March business confidence survey. The institute plans to publish a preliminary version of its closely watched monthly survey of 9,000 German executives to coincide with the release of its new set of economic forecasts for the country. German investor confidence plunged in March, with the ZEW survey of analysts and institutional investors released this week chalking up its biggest-ever fall.
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Australia and New Zealand moved to seal off their borders Thursday, announcing unprecedented bans on entry for non-residents in the hope of stemming the rise of Covid-19 infections. Prime Minister Scott Morrison said the ban on anyone who is not a citizen or permanent resident coming to Australia "will be in place from 9:00 pm tomorrow evening". A similar measure was announced by his New Zealand counterpart Jacinda Ardern, who acknowledged: "I recognise how extraordinary this is. In no time in New Zealand's history has a power like this been used." Australia and New Zealand have announced a slew of restrictions to tackle the pandemic, but have so far stopped short of closing schools or instituting wider-ranging lockdowns.
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