18th Mar 2020 11:24
(Alliance News) - The following is a summary of top news stories Wednesday.
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COMPANIES
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Wm Morrison Supermarkets reported a rise in annual profit but deferred declaring a special dividend. The grocer proposed a final ordinary dividend of 4.84 pence per share, taking the full-year payout to 8.77p. The supermarket chain did not declare a special dividend, choosing to defer it in order to preserve cash amid uncertainty surrounding the Covid-19 outbreak. For its year ended February 2, the FTSE 100-listed grocer said pretax profit jumped 44% to GBP435 million from GBP303 million the year before. Wm Morrison booked a GBP27 million exceptional gain in financial 2020 versus a loss of GBP93 million in financial 2019. Profit before tax and exceptional items rose 3.0% to GBP408 million from GBP396 million, in line with analyst's expectations. Revenue fell to GBP17.54 billion from GBP17.74 billion with like-for-like sales excluding fuel and VAT down 0.8% compared to a 4.4% rise the previous year. Fuel sales were down 2.5% to GBP3.7 billion. Looking ahead, WM Morrison sales have continued to improve as customers have stocked up to prepare for the impact of the outbreak.
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Supermarket chains Tesco, Morrisons and J Sainsbury all commented on the recently announced UK business rates holiday, stating that they are all still waiting on government clarification. UK Chancellor of the Exchequer Rishi Sunak announced Tuesday that the government would be "giving all retail, hospitality and leisure businesses in England a 100% business rates holiday for the next 12 months", J Sainsbury noted. Morrisons said it was "awaiting further details" on how the policy will be implemented and "its potential impact". In its financial year ended February 2020, it paid UK business rates of GBP308 million, around GBP290 million of which related to its stores. Tesco likewise said it was waiting for more detail on "the implementation of this policy and its impact on Tesco".
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Pub owners Mitchells & Butlers and Marston's both said they believe they have the financial strength to withstand the expected severe downturn in the sector due to Covid-19. The UK government has advised against all visits to pubs and restaurants to try to halt the spread of the virus. Mitchells & Butlers said recent trading has been "severely impacted" by Covid-19. Mitchells & Butlers said it is impossible to quantify the full financial impact and all guidance for its current financial year, ending late September 2020, has now been withdrawn. The firm has suspended capital spending and is reducing costs. Like Mitchells & Butlers, Marston's is unable to assess what the economic implications will be, but said results for its current financial year will be hurt.
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Restaurant Group reassured it is a "resilient" business which can withstand the expected significant drop in trading due to Covid-19. Restaurant Group, which owns the Wagamama chain of restaurants, said like-for-like sales in the first eight weeks of its year ending December 27 were up 4.5% on the year before, unaffected by Covid-19. However, in the last two weeks like-for-like sales have fallen 13%. Concessions sales are down 22% like-for-like in the period and are getting worse "by the day" given travel bans. London-headquartered Restaurant Group said it is clear trading is going to get worse. As a result, it sees annual like-for-like sales falling 25%, which assumes a 45% decline in its first half and a 5% fall in the second.
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Greencore Group said volumes are doing well amid the disruption caused by Covid-19 in the UK food industry. The sandwich maker is more than five months into its financial year ending late September, and it said trading has so far been broadly in line with expectations. Since Covid-19 emerged, supply chains and the production network have been fully operational. However, in the past 10 days Covid-19 has had a "more pronounced" impact on the UK food industry, Greencore said. Greencore said it is too early to predict the impact of Covid-19 on financial 2020 results. The company has "substantial" financial headroom, with access to significant cash and it has no maturing debt in the next 18 months.
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MARKETS
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London shares were deeply in the red as more companies warned over the economic hit they will take from the new coronavirus outbreak. Oil fell to an intraday low of USD27.56 a barrel in morning trade, its lowest level in 17 years amid reduced demand for fuel due to travel bans and social lockdown. US stock market futures were pointed to a sharply lower open, despite stimulus measures being taken by the Trump administration to cushion the economic blow caused by the Covid-19 disease.
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FTSE 100: down 4.8% at 5,042.50
FTSE 250: down 4.3% at 13,333.84
AIM ALL-SHARE: down 3.3% at 605.08
GBP: down at USD1.2005 (USD1.2057)
EUR: up at USD1.1012 (USD1.0974)
GOLD: down at USD1,503.88 per ounce (USD1,527.67)
OIL (Brent): down at USD27.83 a barrel (USD29.72)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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The US and Britain led a multi-billion-dollar global fightback against economic havoc wreaked by the coronavirus as the EU shut its borders to travellers from outside for 30 days to stem the pandemic's ferocious spread. The sweeping measures, never before seen in peacetime, have upended society worldwide and roiled financial markets on fears of a global recession. The coronavirus outbreak, which first emerged in China late last year, has quickly marched across the globe, infecting nearly 200,000 people and killing 7,900 as governments scramble to contain it. Following criticism that they were mismanaging their crisis response, London and Washington on Tuesday announced massive economic stimulus packages. President Donald Trump said the White House was discussing a "substantial" spending bill with Congress that would include immediate cash payments to Americans.
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Eurozone inflation softened as expected in February, data from Eurostat showed. The annual consumer price inflation rate eased to 1.2% in February from 1.4% in January, in line with Eurostat's earlier flash estimate. A year ago, the rate stood at 1.5%. Excluding energy, food, alcohol and tobacco, prices rose 1.2% year-on-year in February, the same as the headline rate, though this marked an acceleration from 1.1% in January. Month-on-month, consumer prices were up 0.2% in February. Separately, Eurostat said the bloc recorded a EUR1.3 billion trade surplus in January, more than double the EUR600 million surplus posted a year ago.
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Joe Biden scored decisive victories in all three major Democratic primaries Tuesday, earning him a nearly insurmountable lead over rival Bernie Sanders in their race for the party's presidential nomination. As the US grappled with combating the spreading coronavirus pandemic, voters handed the former vice president victory in delegate-rich Florida, as well as Illinois and Arizona. The command performance speaks to the eagerness of many Democrats to coalesce around a moderate flag bearer, to challenge Republican President Donald Trump, after several other candidates dropped out of the contest in recent weeks and endorsed Biden. In Florida, the 77-year-old won 62% to 23% against Sanders, a 78-year-old self-described "democratic socialist" senator from Vermont. Biden was ahead by 23 percentage points in Illinois, with 89% of precincts reporting. And in Arizona, where polls closed last, Biden was coasting to a third definitive win - and his 19th victory in the last 24 contests.
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