Dunelm warns of 'severe but plausible' winter lockdown
Patricia Nilsson in London
Sales have climbed at Dunelm after lockdown restrictions lifted, but the home furnishings retailer has warned over a "severe but plausible" pandemic scenario in which stores shut again over Christmas and full-year sales lag until 2023.
The company's "conservative" model assumes a second national lockdown for 10 weeks coinciding with the Christmas holiday period, with no further support from the government aside from the business rates holiday.
"In this scenario, once the stores re-open, a period of reduced sales is expected, with full year sales not returning to pre Covid-19 levels until [the full year of 2023]," Dunelm said.
Dunelm on Thursday said store closures during lockdown caused total sales to slip 4 per cent to £1.1bn in the year ending June. Pre-tax profits were down 13 per cent to £109m, compared with last year.
But the company has noted that with people spending more time at home, pent-up demand helped boost sales since lockdown restrictions were lifted, with revenues up 59 per cent in August and 24 per cent in July year on year.
Nick Wilkinson, chief executive, warned that "it is very difficult to provide any meaningful guidance on the future outlook given the uncertainty in the wider economy and the potential impact of further regional or national lockdowns".
Scandinavia success prompts Dixons to consider listing Nordics unit
Jonathan Eley
Dixons Carphone plans to explore listing a minority stake in its Nordics business next year after reporting strong trading.
The Nordics unit trades under the Elkjøp, Elgiganten and Gigantti brands in Sweden, Denmark and Norway. It generated £3.57bn of revenue - about a third of the group total - in the company's most recent financial year.
Chief executive Alex Baldock said a listing would "shine a light on the value of the Nordics business whilst retaining it as part of the group".
The news came as the division reported sales growth of 17 per cent in the 17 weeks to August 29, a period when most of the stores in Scandinavia remained open. Online sales rose 49 per cent.
In the same period in the UK and Ireland, sales grew 12 per cent with online sales rising 164 per cent. Almost two-fifths of sales are now made online in the UK.
Weak spots included UK mobile, where sales were down by half, and Dixons Travel where they were down 90 per cent, reflecting the sharp reduction in air travel.
BA parent IAG predicts fewer passengers than previously forecast
Philip Georgiadis in London
British Airways' parent group IAG expects to carry fewer passengers than forecast this year as travel restrictions and quarantine measures hamper its recovery from the pandemic.
The airline conglomerate is the latest major carrier to trim its flying schedules this week as expected passenger numbers fail to materialise, following easyJet, Ryanair and United Airlines in the US.
As the damage ripples through the industry, the global airlines body warned an urgent rescue plan was needed to stop the UK falling behind international competitors.
Iata on Thursday said the damage was exacerbated by government policies, and called for the introduction of airport testing and an extension of the government's furlough scheme.
Bookings at IAG have levelled off since recovering to about 30 per cent of pre-pandemic levels by the end of June, it said in a trading update.
Short-haul bookings have fallen slightly since the UK and some other European countries introduced quarantine requirements on passengers returning from some popular tourist destinations including Spain, while long-haul travel remains subdued.
Crucially, British Airways and the other carriers that make up IAG's portfolio of airlines are only able to fly a skeleton transatlantic schedule.
IAG lowered all its forecasts for future capacity, which it measures in available seat kilometres. It now expects capacity to fall 63 per cent in 2020 compared with the previous year. It had previously forecast 59 per cent. For next year, capacity is expected to decline by 27 per cent compared with 2019, instead of the 24 per cent previously expected.
The company, which confirmed it will raise €2.75bn in a rights issue, had total liquidity of €7.6bn by the end of August, including €5.8bn in cash and its equivalents.
IAG said it expected to be able to survive a "prolonged downturn" in air travel, and was confident it would emerge from the crisis as a more nimble and flexible company.
It has shed more than 8,000 of its planned 13,000 job cuts at British Airways, largely through voluntary redundancies.
Euro edges higher ahead of ECB meeting
Naomi Rovnick in London
The euro firmed against the dollar ahead of a European Central Bank meeting where traders hope policymakers will provide clues on how they plan to tackle the common currency’s recent strong gains.
The European currency, which has gained 13 per cent against the dollar since the coronavirus swept across Europe and the US in March, rose a further 0.25 per cent on Thursday morning to $1.1830.
At the same time as the euro has strengthened, making European exports less competitive, the eurozone has slipped into deflation, with consumer prices falling by an unexpected 0.2 per cent in August, their first such decline for four years.
In recent months, comments from ECB policymakers, led by president Christine Lagarde, have focused on eurozone unemployment and threats to the bloc’s nascent recovery from the economic damage wrought by the pandemic.
In July, the ECB governing council also hit pause on monetary stimulus measures that it had ramped up over the previous four months, having released a €750bn emergency asset purchasing programme in March.
Investors expect the ECB not to announce any major shifts in monetary policy on Thursday, while potentially shifting its dialogue towards inflation and the euro’s gains. A willingness to extend asset purchases has also become priced in to European government debt, with yields on German 10-year Bunds — which fall as the demand for the securities rises — hovering around a two-week low at minus 0.463 per cent in early European trades on Thursday.
“The impact of the pandemic on market stability is receding,” said Wolfgang Bauer, who manages bond funds for asset manager M&G.
“We could therefore see something of a strategic pivot towards the inflation outlook,” he added, as well as “the strength in the euro.”
Saga seeks to cut back on debt with £150m fresh equity raising
Oliver Ralph in London
Saga, the specialist in insurance and travel for the over-50s, has launched a £150m equity raising designed to cut its high level of debt.
Sir Roger de Haan, the son of Saga’s founder and a former chief executive of the company, is to contribute up to £100m of the new equity and will become chairman.
The company, which recently rejected a bid approach from private equity groups led by former Aviva chief executive Mark Wilson, said that the funds would allow it to “significantly reduce short term debt” and would “ensure that Saga is well positioned to strengthen the business in the short term, against the backdrop of the Covid-19 outbreak and the continued suspension of Saga's travel businesses”.
Saga also launched a broadside at previous owners and management teams.
“For the first 55 years of its life, Saga kept a relentless focus on innovation, creating and delivering unique, high-quality products and services for older people in the UK,” it said in a statement. “This was followed by almost 15 years during which this tight focus slipped.”
It added: “Our franchise was depleted, first under private equity ownership, when debt was increased dramatically and decision making became too focused on the short-term; then, during the period in public ownership.”
Saga was floated by its private equity owners in 2014 at 185p per share. The shares closed on Wednesday at 16p, well below both the float price and the 33p at which Mr Wilson’s consortium proposed to take it private again.
After the fundraising the company said it would launch a share consolidation designed to reduce volatility in the share price.
The company reported first-half results alongside the fundraising. Saga reported a £55m loss, down from £53m in the same period last year, as its travel and cruise businesses were hit hard by the coronavirus pandemic.
Morrisons profits fall 25% on Covid-19 costs
Jonathan Eley in London
Wm Morrison said the direct costs of responding to the Covid-19 pandemic totalled £155m in its first half, resulting in a 25 per cent fall in underlying pre-tax profit to £148m.
The Bradford-based group, which is the UK’s fourth-largest grocer, said on Tuesday that the additional costs — £47m of which were hiring extra staff — had been partly offset by £93m of business rates relief and should taper off during the second half of the year.
However, it is still not issuing a formal profit forecast for the year and the special dividends that investors have received in previous years remain suspended. There was a regular interim dividend of 2.04p a share, up 5.7 per cent on last year.
Sales in the second quarter were up 12.3 per cent at a group level while retail sales, which strip out supplies to wholesale customers such as convenience stores and Amazon, were up 11.1 per cent, ahead of analysts’ expectations.
Lloyd's of London to rack up £5bn in Covid claims
Oliver Ralph in London
Lloyd’s of London, the insurance market, said on Thursday that it expected to pay out £5bn in claims relating to Covid 19.
The insurers that operate at Lloyd’s are facing payouts on a wide variety of policies, including event cancellation and business interruption.
The expected claims pushed Lloyd’s to a £400m first-half loss. The market has already paid out £2.4bn for coronavirus claims, net of money recovered on reinsurance contracts, which insurers buy to protect themselves from large losses.
The market’s combined ratio, which is a measure of claims and costs as a proportion of premiums, worsened from 98.8 per cent in the first half of last year to 110.4 per cent.
Prices for the sort of commercial insurance sold at Lloyd’s have been rising over the past few months, as insurers look to improve their profitability following heavy coronavirus-related claims. Lloyd’s said that prices had risen by almost 9 per cent in the first half, although business volumes declined by a similar amount.
India's new cases hit all-time high of 95,500
Amy Kazmin in New Delhi
India detected an all-time high of 95,500 new coronavirus cases on Wednesday, with 1,168 new deaths, as Prime Minister Narendra Modi continued to push for normalisation to revive the struggling economy.
India has so far detected a total of 4.4m coronavirus infections, second only to the United States. It is now adding more new daily cases than any other country – around three times that of the US or Brazil.
India’s known death toll from the pandemic now exceeds 75,000, with more than 1,000 new deaths every day. The surge in new cases comes as the country has significantly ramped up testing to more than 1m per day.
Despite the rapid spread of the virus, Mr Modi’s government and many state administrations are pushing for a return to normality in the hope of reviving an economy that contracted 24 per cent year on year in the second quarter.
India is now heading into its annual religious festival season – a time of much socialising and intensive commercial activity, which many fear could facilitate a further acceleration of infections, putting new pressure on health services.
The landmark Taj Mahal is also due to re-open to visitors later this month, though visitor numbers will be limited to 5,000 per day.
The worsening pandemic barely figures on India’s television news channels, which has led many Indians to believe the worst is over. Mr Modi no longer discusses the pandemic or the risk posed by the virus publicly.
New Zealand reports four new cases
Gary Jones in Hong Kong
New Zealand reported four new cases of Covid-19 on Thursday, taking the total number of cases in the country to 1,792 since the pandemic began, with 1,441 of those confirmed and 351 listed as probable.
Two of the new infections were community cases linked to the Auckland cluster that arose in August, and two were imported cases detected at managed isolation facilities in Christchurch.
Of the imported cases, one was a man in his 30s and the other a woman in her 50s. Both arrived in New Zealand on a flight from India on August 27.
Indonesia's stocks fall after Jakarta governor reimposes lockdown measures
Alice Woodhouse in Hong Kong
Indonesian shares fell by as much as 5 per cent on Thursday, triggering a circuit breaker after the government said it would reimpose lockdown measures on the country’s capital.
Jakarta’s governor said on Wednesday that the restrictions would be reimposed from Monday following a surge in coronavirus cases that risks overwhelming hospitals. Staff at non-essential businesses must work from home under the restrictions.
The Jakarta SE Composite was down 4.9 per cent, putting the index on track to close at its lowest level since late June.
The Indonesian rupiah was 0.1 per cent weaker against the dollar, having clawed back losses from earlier in the day.
Indonesia has recorded more than 200,000 coronavirus cases, with Jakarta accounting for more than 48,000 reported infections.
Hong Kong salutes educators on low-key Teachers’ Day
Gary Jones in Hong Kong
Hong Kong’s Education Bureau expressed gratitude to the territory’s educators on the annual Teachers' Day on Thursday, despite a celebration having been cancelled due to the coronavirus.
Though the Teacher Tribute 2020 — Teacher Respect Day Celebration and Commendation Ceremony was postponed until November 4 because of social distancing restrictions, a spokesman for the EDB thanked teachers “for their selfless dedication, especially their great efforts and hard work in facilitating students to achieve the goal of 'suspending classes without suspending learning' for more than half a year”.
Hong Kong teachers have adopted various means, including the use of electronic platforms, to reach students at home during the pandemic.
“The new learning and teaching mode has brought unprecedented challenges to teachers, and may have increased their workload,” the spokesman added. “Yet at the same time, teachers have kept making new attempts and managed to overcome a lot of difficulties for the sake of students."
Asian stocks rise after Wall Street snaps tech losing streak
Hudson Lockett in Hong Kong
Asian equities rose after technology stocks on Wall Street rebounded from a three-day rout.
Japan’s benchmark Topix was up 1 per cent in early trading on Thursday while South Korea’s Kospi climbed 0.7 per cent. China’s CSI 300 index of Shanghai and Shenzhen-listed stocks rose 1 per cent and Hong Kong’s Hang Seng added 0.4 per cent.
Shares in SoftBank edged up 0.2 per cent in Tokyo, putting the technology group in a position to end a three-day sell-off that wiped about $13.7bn off its market capitalisation. That rout was prompted by the revelation that SoftBank had taken on notional exposure of about $30bn to US technology stocks using call options, in a high-risk strategy that unnerved its investors and the wider market.
In South Korea, shares in Kakao Games jumped 160 per cent on their trading debut. The initial public offering of messaging app Kakao’s gaming unit attracted orders of about 1,500 times the stock available, smashing local records.
On Wednesday, Wall Street’s tech-heavy Nasdaq Composite rose 2.7 per cent to halt a three-session drop that had put the index in correction territory. The broader S&P 500 finished 2 per cent higher.
Read more here
Seven new imported cases reported in mainland China
Gary Jones in Hong Kong
Mainland China reported seven new cases of confirmed coronavirus infections at the close of Wednesday. All were imported cases involving travellers from overseas, with six in Shanghai municipality and one in Guangdong province.
It was the 25th consecutive day with no local transmissions in China. There were no new reported deaths.
Eleven patients were released from hospital having been cured, according to China's National Health Commission, while 412 people who had had close contact with infected patients were freed from medical observation.
As of midnight on Wednesday, the commission had received reports of 85,153 confirmed cases in total on the mainland, with 4,634 deaths. Some 80,358 patients had been cured and discharged from hospital.
There still remained 161 confirmed cases (including two in serious condition) and one suspected case.
UN warns pandemic could undo decades of reducing child mortality
Gary Jones in Hong Kong
The coronavirus pandemic threatens to undo 30 years of hard-fought progress in reducing deaths of children under the age of five, UN agencies have warned.
The number of global under-five deaths dropped to its lowest point on record in 2019 — down to 5.2m from 12.5m in 1990. However, there are fears the numbers could rise on back of pandemic-induced disruptions to child and maternal health services.
Services experiencing disruptions include health checkups, vaccinations and prenatal and post-natal care. Reasons include resource constraints and a general uneasiness with using health services due to a fear of Covid-19, according to the UN agencies.
Over the past 30 years, health services to prevent child death from causes such as low birth weight, complications during birth, neonatal sepsis, pneumonia, diarrhoea and malaria have played a large role in saving millions of lives, the agencies said.
The estimates, contained in the Levels and Trends in Child Mortality: Report 2020, were issued by Unicef and the World Health Organization as well as other groups.
“The fact that today more children live to see their first birthday than any time in history is a true mark of what can be achieved when the world puts health and well-being at the centre of our response,” said Tedros Adhanom Ghebreyesus, WHO director-general.
“Now, we must not let the Covid-19 pandemic turn back remarkable progress for our children and future generations.”
Surveys by Unicef and the WHO in 77 and 105 countries, respectively, found high instances of disruptions in health services critical to preventing new-born and child deaths.
The Unicef survey found that almost 68 per cent of the countries faced disruptions in health checks for children and immunisation services, 63 per cent had disruptions in antenatal check-ups and 59 per cent in post-natal care.
Victoria’s coronavirus death toll passes 700
Alice Woodhouse in Hong Kong
Australia’s state of Victoria reported 51 new coronavirus cases on Thursday morning, as the number of deaths linked to Covid-19 passed 700.
Seven new fatalities took the number of deaths from the pandemic to 701.
Daniel Andrews, Victoria's premier, was forced to defend a decision to impose a curfew as part of lockdown measures after the state’s police chief commissioner told local radio on Thursday that the force was not consulted on the decision.
The premier said the curfew made the job of policing as “simple as possible” and sent a message of a “very real risk” of fines.
The curfew had limited the amount of unlawful movement “that does nothing but potentially spread this virus”, Mr Andrews said.
Mr Andrews said the low number of cases in regional Victoria could see anti-epidemic measures removed at a faster pace.
Can plasma and antibody therapies help as world awaits Covid-19 vaccine?
Anna Gross in London
Nine months into the coronavirus pandemic, scientists are conflicted about the use of convalescent plasma and antibody therapies to battle Covid-19 while a fully tested vaccine remains under development.
The US Food and Drug Administration last month awarded an emergency authorisation for the use of convalescent plasma to treat coronavirus in hospital patients, only for a panel of experts convened by the US National Institutes of Health to hit back last week, citing insufficient evidence to support its use.
Convalescent plasma — the antibody-rich fluid left behind when all the cells are filtered out of blood — has been used successfully for more than a century as an emergency treatment in epidemics, from the 1918 Spanish flu through to the 2014-16 Ebola outbreak in west Africa.
Read more here
Save the Children warns pandemic has widened gap between rich and poor
Alice Woodhouse in Hong Kong
The pandemic and school closures affecting 1.6bn children globally is widening the gap between rich and poor as well as boys and girls, according to a survey by Save the Children.
Vulnerable children have seen their family members lose their jobs and have been unable to access education after countries introduced lockdown measures to halt the spread of the virus.
Two-thirds of children have had no contact with teachers since schools closed their doors and fewer than 1 per cent of children from poor households said they had access to the internet for remote learning.
Save the Children estimates that the disruption to children's education means at least 10m will not return to school, with girls and the most deprived children most affected.
Girls have also had to shoulder more household responsibilities, meaning they have less time to study. More than two-thirds of girls reported an increase in chores and half said that they were spending greater time caring for their siblings.
Family finances have been hit, with 93 per cent of households saying they lost more than half of their income.
The pandemic also threatens to increase the risk of violence against children, with almost a third of households reporting physical or emotional violence at home since the health crisis began.
Around 25,000 caregivers and children answered the survey across 37 countries.
JPMorgan fires employees who took Covid relief funds
Laura Noonan, US Banking Editor
JPMorgan Chase has dismissed several employees who allegedly pocketed bailout funds that were supposed to help businesses dealing with the Covid-19 crisis, a person familiar with the situation said.
Bloomberg reported earlier on Wednesday that America’s largest bank had discovered that some employees improperly applied for and received money under the Economic Injury Disaster Loan (EIDL) programme, which offered grants of up to $10,000 and low interest loans to businesses hurt by the pandemic.
The scheme is separate from the Paycheck Protection Program, the federal government’s flagship bailout for small businesses which offered forgivable loans of up to $10m and has been plagued by problems since its April inception.
Read more here.
US coronavirus deaths jump by more than 1,000
Peter Wells in New York
The number of coronavirus deaths in the US rose by 1,000 for the first time in nearly a week on Wednesday, while new cases rose by more than 30,000 for the first time in three days.
A further 1,089 people died, according to data from Covid Tracking Project, up from 358 on Tuesday and compared with 1,032 a week ago.
However, low increases in recent days, possibly because of delays in reporting during the Labor Day long weekend, resulted in the seven-day average of fatalities falling to 721, the lowest since July 17.
Florida (202), Texas (139) and California (83) reported the biggest one-day jumps in deaths, while North Carolina (49) had an increase just one fatality shy of its record from four days ago.
A further 30,983 people in the US tested positive for Covid-19 over the past 24 hours, up from a three-month low of 22,219 yesterday and compared with 30,604 a week ago.
Asia-Pacific equities rise after US rebound
Alice Woodhouse in Hong Kong
Stocks in Asia-Pacific rose on Thursday morning following a rebound on Wall Street as technology shares snapped three days of losses.
In Japan, the Topix added 0.7 per cent, the Kospi in South Korea was up 1.1 per cent and Australia’s S&P/ASX 200 rose 1.2 per cent. Futures point to a 0.9 per cent gain for the Hang Seng when trading in Hong Kong begins later in the morning.
Overnight in the US, the Nasdaq Composite added 2.7 per cent, rebounding from three consecutive trading days of losses as technology shares tumbled. The S&P 500 also added 2 per cent.
S&P 500 futures were up 0.1 per cent.
Texas new cases and deaths bounce back following long weekend
Peter Wells in New York
New cases and deaths in Texas rose the most in four days on Wednesday following a pullback during the Labor Day long weekend.
A further 4,285 people tested positive for the disease over the past 24 hours, Texas’s health department revealed this afternoon, up from a near three-month low of 1,416 yesterday and compared with 4,157 a week ago.
A batch of 186 older cases from Montgomery county stemming from commercial laboratory testing backlogs were added to the statewide tally, but not included in today’s figures.
Deaths rose by 139, up from 61 on Tuesday and compared with an increase of 189 last Wednesday.
New cases and deaths fell to their lowest levels in months in recent days, but this may have been because of delays in reporting over the Labor Day long weekend. Wednesday’s figures were both the highest since Saturday.
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California reported its smallest daily increase in coronavirus cases since late May. A further 1,616 people in the most populous US state tested positive for the disease over the past 24 hours, health authorities revealed, down from 2,676 on Tuesday and compared with 4,255 last Wednesday.
New York City is set to allow limited indoor dining at restaurants at the end of the month, as the state's most populous city continues to recover from the pandemic. Governor Andrew Cuomo said on Wednesday restaurants would be allowed to resume indoor dining from September 30, albeit at 25 per cent capacity.
The daily number of new coronavirus cases in Portugal has risen to the highest level since April, increasing the likelihood that England will reintroduce quarantine controls for tourists returning from Portuguese holidays. Jamila Madeira, secretary of state for health, said on Wednesday 646 new cases had been registered in the previous 24 hours.
Florida reported more than 200 new coronavirus deaths for the first time in three weeks on Wednesday. A further 202 people died from the disease, state health authorities revealed this morning, up from 44 on Tuesday and compared with 130 a week ago. It was the biggest one-day increase in deaths since August 18.
The number of job openings in the US jumped by more than 600,000 in July, as both hires and dismissals slowed. There were about 6.6m job openings at the end of July, compared with 6m a month earlier, according to the Job Openings and Labor Turnover Survey published on Wednesday by the US Bureau of Labor Statistics.
The pause in the AstraZeneca vaccine trial is proof that the race to find a coronavirus vaccine is not compromising safety, according to Francis Collins, head of the US National Institutes of Health. Dr Collins told senators at a hearing on Wednesday: "When we say we are going to focus on safety and make no compromises, here is exhibit A."
Ryanair has cut its forecast for how many passengers it expects to carry this fiscal year, as the carrier warned this winter will be "a write-off". Europe’s largest low-cost airline now expects to carry 50m passengers in the 12 months to the end of March, down from the 60m projected in July. Ryanair had expected to carry more than 150m passengers before the pandemic struck.
The Bank of Canada reiterated its pledge to maintain interest rates at near zero “until economic slack is absorbed”, even as the economy mounts a quicker rebound than expected following shutdowns related to coronavirus. The central bank on Wednesday left its benchmark rate unchanged in effect at the lower bound of 0.25 per cent.
Finnair has become the latest airline to rip up its autumn schedule as passenger demand remains stubbornly low. Finland’s largest airline, which is majority owned by the government, said it would operate between 70 and 80 daily flights in October, less than half the 200 it had previously planned.
United Airlines has forecast lower quarterly sales compared with an earlier estimate as it finds it harder to lure passengers back into the skies than expected. The airline expects to decrease its scheduled capacity for the third quarter to about 70 per cent from a year earlier, exceeding an earlier expected decline of about 65 per cent.
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2020-09-10 06:38:05Z
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