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Weekly review

By Josh White

Date: Friday 03 Apr 2020

(Sharecast News) - The FTSE 100 ended the week 94.83 points lower at 5,415.50.
Equity view

Primark owner Associated British Foods said its chief executive and finance director had volunteered to take a 50% pay cut in response to the coronavirus pandemic.

BAE Systems has withdrawn its dividend and put financial guidance on hold after the Covid-19 crisis began to cause major disruptions to its business.

Ascential said it was pulling its final 4p dividend and cancelling the Cannes Lions advertising conference in response to the coronavirus pandemic as it saw "significant disruption" across the marketing and communications industry.

Great Portland Estates said on Friday that it remains in a strong financial position, that it has collected 63% of its March rent and that a decision on the final dividend will be made once the year end results are finalised in May.

Land Securities has cancelled its dividend to conserve cash and set up an ?80m rent relief fund for customers struggling during the coronavirus crisis.

Segro said on Thursday that it is "very well capitalised" with a 26% loan-to-value ratio as at 31 March, alongside high liquidity and significant headroom to its financial covenants, as it faced the impact of the Covid-19 coronavirus pandemic.

Distribution and services group Bunzl said on Thursday that it is scrapping its dividend and withdrawing its 2020 guidance due to the coronavirus outbreak.

British Gas owner Centrica cancelled its dividend, cut capex and paused the planned sale of its Spirit Energy business to mitigate the impact of the coronavirus pandemic.

Lloyds Banking Group has scrapped its final 2019 dividend and agreed not to make shareholder payouts or buy back shares in 2020 at the request of the Bank of England to preserve capital in the Covid-19 crisis.

HSBC has cancelled its fourth-quarter dividend and agreed not to pay dividends or buy back shares in 2020 after the Bank of England told the bank to conserve capital during the Covid-19 crisis.

Executives at house builder Taylor Wimpey agreed to cancel bonuses and take a 30% base salary cut for the duration of the coronavirus lockdown.

Defence company Qinetiq said on Wednesday that it will postpone a decision on whether to pay a final full-year dividend until later in the year, when there is greater clarity on the impact of the coronavirus pandemic.

Morgan Advanced Materials suspended its dividend and withdrew its 2020 guidance on Tuesday due to the coronavirus outbreak.

House builder St Modwen Properties pulled its dividend, cut boardroom pay by 20% and said all furloughed employees would receive full salary due to the coronavirus pandemic.

Smiths Group delayed the demerger of its medical business and scrapped its half-year dividend as the engineering group reported intensifying disruption from the coronavirus crisis.

Soft drinks maker Nichols cancelled its final dividend on Tuesday as it said the coronavirus is expected to have a "significant" impact on its 2020 performance.

Smith & Nephew has withdrawn its annual financial guidance after the spread of Covid-19 made it clear business would not return to normal as early as it expected.

Convenience food group Greencore said on Monday that it was withdrawing its full-year guidance and scrapping its interim dividend amid reduced demand for its food to go products due to the coronavirus outbreak.

Oxford Instruments said on Monday that it is suspending its interim dividend due to the coronavirus outbreak.

Johnson Matthey warned annual results would miss expectations after the coronavirus crisis reduced demand and delayed shipments.

Economic news

Retail sales crashed to their worst month on record in March as government coronavirus measures hit trading and consumers tightened their belts, a closely watched survey showed.

The UK services sector suffered its worst decline on record in March as the coronavirus outbreak took its toll, according to a survey released on Friday.

UK house prices rose in March but the market is now "grinding to a halt" due to the coronavirus and government measures to slow its spread, according to a survey released by Nationwide on Thursday.

The price of cough and cold medicine rose by 10.7% last week as retailers take advantage of the rise in demand due to the coronavirus outbreak.

Up to 1m small businesses could be forced to close as they struggle to obtain the cash to survive lockdown, despite the package of measures announced by the government, according to research released on Wednesday.

UK manufacturing output fell in March at its fastest rate in eight years, while employment declined at the fastest rate in more than a decade as the coronavirus outbreak and efforts to slow its spread took their toll, according to data released on Wednesday.

UK growth stagnated in the final quarter of 2019, putting the economy in a weak position as the coronavirus crisis loomed, official figures showed.

Sales across British supermarkets hit record levels in the last four weeks, industry data published on Tuesday showed, as shoppers rushing to stock up on food and other household staples spent an extra ?1.9bn at the tills.

The UK economy is on course to enter the deepest recession since the financial crisis, a respected think tank warned on Monday, with growth set to slump by a record 15% in the second quarter.

Mortgage approvals rose to a six-year high in February as confidence briefly returned to the property market before the onset of the coronavirus crisis, the Bank of England said.

International events

Eurozone economic output crashed at a record pace in March as the coronavirus epidemic took its toll on demand and production, a benchmark survey showed.

China's crucial services sector recovered only marginally in March after tumbling to record lows in February, data published on Friday showed.

The UN COP26 climate change conference due to take place in Glasgow in November has been postponed in the wake of the Covid-19 crisis.

US jobless claims surged even further last week as businesses rushed to shutter activity, surpassing even the most downbeat estimates.

Manufacturing output in the eurozone shrank at the fastest pace since the 2009 global recession as the coronavirus crisis forced factories to close.

Chinese manufacturing stabilised in March after a record plunge caused by the coronavirus crisis, a survey showed.

China's official measure of manufacturing activity rebounded to show surprise growth in March as the coronavirus crisis appeared to ebb in the country where it started.

The number of people out of work in Germany rose a little in March, according to figures released by Destatis on Tuesday.

Oil prices have hit fresh lows as the bitter price war between Saudi Arabia and Russia and the growing impact of coronavirus on the US and global economies weigh heavily.

US President Donald Trump said on Sunday he would extend social distancing measures until 30 April in an effort to limit death toll from the Covid-19 pandemic.

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