header
search-icon
mobile-menu-icon search-icon

RESEARCH

Clients can browse and search the Peel Hunt research library and archive.

TRADING

A tool for our clients to submit and manage orders with Peel Hunt. 

REGISTER FOR OUR RESEARCH PORTAL

Thank you, your registration has been received.
We will be in contact with you shortly.

I'm interested in (tick all that apply)

SEARCH

PEOPLE
SERVICES
NEWS

Financial Advisory and Capital Markets Services to Corporates

Comprehensive coverage of over 350 companies

Investment ideas and execution for institutional investors

Complete UK pricing coverage and worldwide access

Our joined-up approach allows us to consistently deliver value

A wealth of experience, strong collegiate ethos underpinning our joined-up approach

Our principles define the relationship between our people, our departments and our clients

We are committed to making a difference in the communities we live and work in

An environment committed to the development of our colleagues

An internship programme for undergraduates as part of their study

Insight Image

The UK government has outlined, for the first time, an exit strategy. The government will be painfully aware of the ballooning cost of the furlough scheme and its long-term economic impact. It comes as no surprise that its first major move is to encourage those who can’t work from home to return to their posts. While this presents some challenges logistically, as public transport use is still discouraged, this affects less than 20% UK commuters. The major issue will be what work will there be? The UK service sector makes up 80% of GDP. Some sectors will recover quickly due to pent up demand but many will find a lack of demand given that so many will remain at home.

Headlines

• UK government publishes its exit strategy.

• UK government advises the wearing of face coverings on public transport.

• Jury trials to resume in England and Wales.

• Saudi Arabia is set to raise its consumption tax from 5% to 15% starting from July.

• Passengers arriving from France exempt from UK 14-day quarantine plans



Company news

Financial

Anglo African Agriculture – “It is expected, based on indicative orders, that for the six months ending 31 October 2020, that revenues will be almost double the corresponding period in the previous year. One of the major customers recently issued a six-month production order amounting to some US$1m starting July this year. Although the indicative orders look positive, due to the uncertainties caused by the Coronavirus the company cannot give future guidance year on year.

Progress with the Comarco Transaction has been protracted, mainly due to the general capital markets environment and the fact that many investment decisions have been put on hold until the effects of the Coronavirus are understood. Comarco as a Port and Marine logistics operator is currently not materially affected by Coronavirus, however there is a slow down as with all trade worldwide. Activity on the Mozambique LNG project has also slowed down due to contractors not been able to travel and a general 30-day lockdown in Mozambique.”

Food, Drinks & Household

Cake Box Holdings – “Since this date we have conducted a detailed review of the group's processes and operations and consulted with franchisees and their employees. Consequently, we have been able to put in place new processes which will allow our franchise stores to operate safely and in line with government guidance. These include: • Operating with smaller teams in store to allow for social distancing from colleagues;

• Clear demarcation of required social distancing throughout the premises;

• Staff wearing PPE at all times including face masks and shields; and

• Implementing an enhanced personal and property hygiene regime

Following an initial trial, limited to a number of stores operating our Click & Collect service and Delivery in partnership with select online platforms, the effective implementation of these new processes has meant that the group has, with confidence, been able to inform its franchise stores that they are able to resume trading at the discretion of the individual franchisee.

Accordingly, we currently have 79 franchise stores open, offering a limited menu of products, and anticipate having the full high street estate open by early June. Initial demand from customers has been encouraging, albeit at much lower levels than in normal trading conditions given the ongoing lockdown restrictions.

Production is currently limited to our Enfield site where we have also implemented new health and safety procedures and are operating with reduced staffing levels to maintain the appropriate distancing.”



Healthcare

Amryt Pharma – “Amryt's business lends itself to remote working and in recent weeks, we have successfully transitioned appropriate functions to remote platforms exclusively without incident. The impact of Covid-19 to date on Amryt's business has been minimized and this is a result of deploying contingency plans already in place for a variety of scenarios and challenges which may occur.

Amryt provides therapeutic products to Homozygous Familial Hypercholesterolaemia ("HoFH") and lipodystrophy patients globally on a recurring basis. Once lomitapide (for the treatment of HoFH) or metreleptin (for the treatment of lipodystrophy) are prescribed by physicians, patients are typically on treatment over a long period of time with repeat prescriptions for each patient. As such, the majority of our revenues are recurring in nature. During the pandemic our sales teams' deployment in the field is restricted and we continue to evaluate remote and virtual physician access as a means to identify new patients that may be suitable for treatment with our products.

Amryt has in excess of 12 months of labelled and unlabelled finished products on hand for both lomitapide and metreleptin. Our supply chain is robust and we are confident that we can continue to supply patients for the foreseeable future. We are taking additional steps to further strengthen our inventory levels of both metreleptin and lomitapide. To date, we have not experienced any significant logistical difficulties in delivering product to patients. In major markets such as the USA, the UK and Germany, product has historically been delivered direct to patients' homes. In other markets, product has typically been delivered to local hospitals/distributors and we are continuing to explore opportunities to expand direct to home delivery in these markets.”

Avacta Group – “The Group recently reported that it had generated multiple, highly specific Affimer reagents that bind the SARS-COV-2 viral antigen and do not cross-react with SARS, MERS and other closely related coronaviruses. These Affimer reagents will be used to develop a point-of-care saliva based Covid-19 antigen test strip by Cytiva (formerly GE Healthcare Life Sciences) for CE marking in Europe and FDA approval in the United States.



The Affimer reagents have now been manufactured by Avacta in the quantities required for test development and are being sent to Cytiva today. The reagents are also being provided to Adeptrix with whom Avacta has announced that it will develop a Covid-19 laboratory test to run on hospital mass spectrometers using Adeptrix's proprietary BAMSTM assay platform.

The Affimer reagents have also now been studied further by Avacta and, importantly, this has shown that there are Affimer reagents that can work in pairs, both binding to the spike protein at the same time. This allows tests to be developed that detect both the intact virus particle and the detached spike proteins which become separated from the virus particle during the development of the Covid-19 disease, which may also be important in monitoring disease progression.

Cytiva and Avacta will now work to develop rapid test strips for the detached spike protein and for the intact virus particle, aiming to have prototype devices in a few weeks. Adeptrix will be working on a similar timescale to develop a prototype BAMS test. Both of these tests will indicate whether a person has the infection at that moment.”

Open Orphan – “Open Orphan plc (ORPH) the rapidly growing specialist CRO pharmaceutical services company which has a focus on orphan drugs and is the world leader in the testing of vaccines and antivirals using human challenge study models, is pleased to announce that Quotient has entered into an exclusive contract with hVIVO to support Covid-19 antibody testing in the UK.

The MosaiQ™ by Quotient system and MosaiQ Covid-19 Antibody Microarray will be used by hVIVO to screen for SARS-CoV-2 antibodies (Covid-19). The MosaiQ Covid-19 Antibody Microarray was CE marked (certified to meet EU requirements) as of 01 May 2020 based on testing that demonstrated 100% sensitivity (ability to detect Covid-19 antibodies) and 99.8% specificity (ability to rule out the presence of Covid-19 antibodies). The test is designed as a serological disease screen specific to Covid-19. It detects the IgG and IgM antibodies that humans develop when infected by SARS-CoV-2.”



Industrials

Diploma – “We have prioritised the wellbeing of our colleagues by focussing our support on their physical and mental health, whether at home or in the workplace. In doing so, we have reviewed our operational working practices, increased working from home, split shifts and introduced new health and

safety measures to the workplace. We have also provided Employee Assistance Programmes to all of our colleagues

We have sought and will continue to seek to preserve jobs. We are taking appropriate steps to flex our working practices in light of the impact of the pandemic on both our colleagues and our business. Consistent with our decentralised operating model we are responding to the unique circumstances of each business

As we provide essential business-to-business products and solutions, all of our facilities have remained open and continue to operate for our customers. We have also been providing essential products in the battle against Covid-19, such as face shields and components for ventilators

From a financial perspective, revenues have fallen in April by ca. 28% on an underlying basis and by ca. 16% on an actual basis. At these levels the Group continues to generate good operating profits and cash flows. We have also taken decisive action to mitigate the impact on our business which includes freezing all capital expenditure and discretionary spend and we remain focussed on managing our working capital. Our Executive Directors, Non-Executive Directors and the Executive team have also volunteered a reduction in basic salary/fees of 20% for the duration of the crisis.”

TI Fluid Systems – “In light of the Covid-19 pandemic, the Group has taken a number of steps to protect and prioritise the safety of our employees, their families and our communities, including compliance with relevant government directives. This response consists of a global travel ban and the transition to a remote work environment for all applicable staff employees as well as the implementation of enhanced workplace and manufacturing measures such as social distancing, improved hygiene procedures and modified shift patterns. We have temporarily closed certain facilities to all but essential personnel in order to maintain safety and a sustainable business environment.

In addition, to provide humanitarian support to front line health workers, the Group has collaborated with Ford Motor Co. and 3M to prototype, develop and produce within just two weeks air flex tube assemblies for powered air-purifying respiratory systems (PAPR). Thanks to the incredible dedication and resilience of our employees and design teams, the Group was able to rapidly leverage its design and manufacturing capabilities to mass produce quick connectors and a new “one size fits all' air flex tube solution for the PAPR system to meet the demand of much needed protection for health care workers. See our website (tifluidsystems.com) for more details on this project.

Outlook – Given the unprecedented uncertainty of the impact and duration of the Covid-19 pandemic the company is withdrawing the 2020 outlook it provided in its full year 2019 results announcement on 17 March 2020.

While we are not able to provide 2020 outlook, the Group has taken, and will continue to take, actions to significantly reduce operating costs and conserve cash. This comprehensive global initiative is focused across all manufacturing locations and functional areas and includes a hiring freeze, postponement of salary increases, salary reductions, and utilization of worker furlough programs. Our board and senior management have agreed to a temporary 10% reduction in their fees or base salary, and most other salaried employees have agreed to a similar 5% reduction, which will be reinstated for all when conditions are deemed appropriate. In addition, the Group continues to monitor its capital allocation and working capital in relation to related customer and regional volume recoveries.

The Group ended 2019 in a strong liquidity and financial position. In response to the significant economic impact of the Covid-19 pandemic and to ensure sufficient cash availability in the event of a prolonged reduction in global light vehicle production, we took the precautionary decision at the end of March to draw €146 million of our approximate €192 million revolving credit facilities. Including this cash, our liquidity position was approximately €600 million at 31 March 2020.

Dividend – The Board is confident that the Group will continue to effectively manage the impact of the Covid-19 pandemic and, after carefully considering the Group's Q1 performance and overall liquidity and financial position, supports payment of the 2019 final dividend as previously announced.

The 2019 final dividend amount of 5.94 euro cents was converted from Euro to Sterling using the London closing spot rate on 24 April 2020. Accordingly, subject to shareholder approval at the upcoming AGM on 14 May 2020, the Sterling dividend payable in cash on 29 May 2020 to holders of ordinary shares of the company on the register on the record date of 24 April 2020 will be 5.20 pence per ordinary share.

Given the Group's strong customer relationships and efficient global footprint, we believe the Group is well positioned to recover as and when vehicle production volumes begin to increase. The Group's highly experienced management team will continue to focus on cash, fixed costs and operational flexibility in order to manage through the current uncertain production volume environment.”

Victrex – “Whilst the global demand picture remains highly uncertain, we will continue to position ourselves for the uptick, with further investments tailored to specific long-term growth opportunities. These include our subsidiary in China which will underpin and support continued growth in that region. As part of our cash conservation and cost reduction measures in light of Covid-19, our £15m debottlenecking investment in the UK has now been deferred to FY 2021. However, with lower production already planned for this financial year and some special grade campaigns and new parts programmes ahead of revenue in the first half, we will continue to see some impact on margin from under-recovered overhead. We have continued to make progress in several of our downstream growth programmes, with our US facility now supplying commercial product into the Aerospace market and progress in the Magma Oil & Gas composite pipe opportunity.



"Q3 to date has been broadly in line with our expectations, although we are now seeing emerging headwinds from Covid-19 in our forward order book, particularly in Aerospace and Automotive, with Energy already seeing very tough conditions. Geographically, some more normalised demand returning in Asia could prove supportive, although the demand outlook in Europe and the US is becoming more challenging. Our supply chains remain effective and our inventory levels are high as we continue to serve customers appropriately. We have implemented a range of cash conservation measures, including deferring our debottlenecking programme and a decision on our interim dividend, and alongside our net cash position and available facilities, our balance sheet remains strong. As previously communicated, with significant macro and end market uncertainty, we are unable to provide detailed guidance on full year expectations. We believe the proactive actions we are taking are appropriate to minimise disruption and on a long-term basis, our Polymer & Parts strategy keeps us well placed to deliver our range of medium to long term growth opportunities.

Proactive actions on Covid-19 – The safety and well-being of Victrex employees continues to be our highest priority. We established a Covid-19 committee at the start of 2020, with a proactive approach and a range of contingency plans already implemented. The Group did not see a material impact from Covid-19 during the first half year, although we did see some longer lead times for deliveries in certain geographies.

People – A range of contingency plans have already been implemented, with a focus on the safety and well-being of our people. We continue to follow governmental or state guidance wherever we operate, and continue to serve customers from home offices, with the overwhelming majority of our global employees' homeworking, wherever roles are not production related. We recently re-opened our China technical centre and Sales office in Korea, with a phased return to work.

Essential industry – The UK government defines Chemicals as an essential industry with essential workers, with Victrex also having a long-standing history in supporting many critical and "life-sustaining" applications, particularly in Medical. In the US, we continue to operate on an ongoing modified basis, defined as being a ‘life-sustaining' organisation in several states.

In order to minimise the risk to those business-critical employees in our production assets, we are continuing to produce aligned to demand, supplemented by high buffer inventory if required.

Ventilators – Victrex has a long-standing history in many critical applications and in addition to companies we already serve, we are supplying materials for Ventilators or related equipment to a number of global companies as part of the effort against Covid-19.

Cash conservation – Our range of cash conservation measures includes deferring capital expenditure for the UK debottlenecking programme to FY 2021 (approximately £15m), with other capital programmes limited to essential only expenditure. All discretionary costs including travel and new recruitment have been constrained to those activities critical to supporting customer related activity. We have mapped out a number of different scenarios in relation to our customers' demand and we will be prepared to implement the corresponding action plans should any of them materialise.

Dividends – Against an uncertain Outlook, the Board believes it is in the best interests of all our stakeholders to defer an interim dividend at this stage. The timing of any payment will be contingent on prevailing macro-economic and end-market conditions over the coming months.

Strong financial position – Overall, our financial position remains strong, including a net cash position of £53.2m on 31 March and a committed undrawn RCF of £20m, and a £20m accordion, to October 2024. We are in regular engagement with our banks, with options available to access other capital, should this be required. Whilst the financial impact of the Covid-19 crisis is impossible to predict, the Group is planning and preparing for multiple scenarios, in terms of the impact on our customers' demand and the timing and shape of a recovery.

This includes consideration of a sharp impact in Q3 and Q4 (calendar quarter 2 and 3) before a recovery at the start of our next financial year, as well as a more severe scenario that assumes a continued impact on demand into 2021, before a gradual recovery through the year. In the event of either scenario occurring, the Group believes it has sufficient capital, borrowing facilities and flexibility to be able to manage through these scenarios, whilst continuing to invest for long-term growth.”

Leisure

Borussia Dortmund – “Despite the strict restrictions on public life imposed in mid-March 2020 due to the Covid-19 pandemic and the resulting severe impact on the economy and thus also on Borussia Dortmund's operating business, the company generated a consolidated net profit of EUR 1.1 million in the third quarter of the financial year (prior-year quarter: EUR 29.4 million). The consolidated net profit after taxes amounted to EUR 4.1 million in the period from 1 July 2019 to 31 March 2020 (prior-year period: EUR 47.1 million). The year-on-year decline is due primarily to the decrease of EUR 38.2 million in net transfer income to EUR 39.0 million (prior-year period: EUR 77.2 million).



The progression of the Covid-19 pandemic and its impact on public life as a result of any future orders imposed by the federal and state governments will be of great significance to Borussia Dortmund's financial performance going forward. Despite the possibility that the 2019/2020 Bundesliga season will soon resume in May 2020 (see corporate news dated 6 May and 7 May 2020), the currently unforeseeable further course of the Covid-19 pandemic means that the coming weeks and months by-and-large remain fraught with uncertainty. All of Borussia Dortmund's revenue streams have been adversely affected by the present Covid-19 pandemic and may be strained further, particularly by the impact that any matches held "behind closed doors" might have (see corporate news dated 9 May 2020). In light of this and the generally unforeseeable nature of the impact on Borussia Dortmund's revenue streams and cash flows in this situation, management therefore remains unable to issue a new, detailed earnings forecast for the 2019/2020 financial year. However, management currently does not expect to generate a consolidated net profit for the full 2019/2020 financial year.

The preliminary figures for the "Q3" quarterly report period as at 31 March 2020 are as follows.

Borussia Dortmund generated consolidated total operating proceeds (revenue plus gross transfer proceeds generated) of EUR 134.4 million in the third quarter of financial year 2019/2020 (Q3 previous year: EUR 153.2 million) and EUR 431.8 million on a cumulative basis over the first three quarters (prior-year period: EUR 409.2 million). Borussia Dortmund recorded an increase of EUR 18.8 million, or 6.3%, in consolidated revenue to EUR 316.4 million in the first three quarters of the year (prior-year period: EUR 297.6 million). Consolidated revenue amounted to EUR 79.8 million in the third quarter of the financial year (prior-year period: EUR 83.7 million).

In the first three quarters, consolidated earnings before taxes (EBT) amounted to EUR 5.6 million (prior-year period: EUR 53.2 million) and consolidated earnings before interest, taxes, depreciation and amortisation (EBITDA) amounted to EUR 83.2 million (prior-year period: EUR 110.9 million).

Consolidated revenue amounted to EUR 79.8 million in the third quarter of the financial year (prior-year quarter: EUR 83.7 million), of which EUR 9.9 million (prior-year quarter: EUR 11.9 million) in income from match operations, EUR 33.0 million (prior-year quarter: EUR 36.0 million) in income from TV marketing, EUR 24.2 million (prior-year quarter: EUR 22.9 million) in advertising income, EUR 6.8 million (prior-year quarter: EUR 6.7 million) in conference, catering and miscellaneous income, and EUR 5.9 million (prior-year quarter: EUR 6.2 million) in merchandising income.”

Mining

Chesterfield Resources – “is pleased to announce that it is to resume operations in Cyprus. The country has conducted a successful campaign against the Covid-19 epidemic and has now announced a detailed roadmap to release lockdown restrictions. As a consequence, Chesterfield is now able to commence planning to resume its fully-funded drill programme.



Highlights

• Cyprus has conducted one of the most successful Covid-19 suppression operations in the world. Like New Zealand and Iceland, there is a possibility it could soon eradicate the virus altogether.

• The country has announced a detailed four-phase roadmap out of lockdown, spread over two months. This provides businesses with a clear framework to plan ahead.

• Chesterfield is set to be among the first junior miners to recommence operations. Drilling is planned on its Troodos West licences by mid-June. Detailed preparations are underway.



Martin French, Executive Chairman of Chesterfield commented: "We are fortunate to be operating in a country that has conducted a particularly successful campaign against Covid-19. Cyprus last week initiated a comprehensive and well-defined programme to re-open its economy. We have drill, crew and logging geologists all available in country. We do not need to fly any personnel in from overseas in order to re-commence drilling.”

Lucara Diamonds – “In March 2020, the company implemented a crisis management strategy in relation to Covid-19, to protect the health and well-being of its employees in Botswana and Canada and to protect the financial well-being of the business. The Karowe Mine remains fully operational, under new measures and guidelines implemented by the Government of Botswana in late March 2020. These measures designate mining as an essential service in Botswana and include increased travel restrictions, reduced overall staffing levels and increased and appropriate social distancing. Employees who are able to work remotely are doing so. As travel restrictions relating to Covid-19 are expected to remain in place for an unknown period, the company's ability to complete tenders in Botswana is expected to be impacted. As a temporary measure, the Government of Botswana has granted Lucara permission to hold diamond sales in Antwerp, Belgium if required.



Lucara completed the first of four planned diamond tenders for the year on March 5th, and achieved sales prices within 1% of forecast, however, diamond prices have since deteriorated in response to weaker demand as Covid-19 has continued to spread globally. The full impact of Covid-19 on Lucara's operations and production outlook for 2020 remains highly uncertain, and as a result, the company has suspended its 2020 guidance until further notice.

Lucara's second quarter tender, originally scheduled for mid-May 2020, has been postponed and will be re-scheduled to a more appropriate date in the near-term, as market conditions are evaluated. The Clara digital sales platform, which allows for buyers to place orders without physically viewing the goods and to purchase only the diamonds they need on a stone by stone basis, continues to hold sales. Travel restrictions in Botswana, South Africa, India and Europe have caused disruptions during April preventing some deliveries from taking place.

Lucara's planned capital spending program for 2020 is largely focused on the initiation of our Karowe underground expansion project and was previously designed to ramp up in Q3, funded entirely from cash-flow, under a budget of $53 million. Given the present uncertainty related to our 2020 revenue forecast, this program is being re-scoped and reduced to focus on critical-path items through the remainder of the year. The underground expansion program has an estimated capital cost of $514 million and a five-year period of development. The company expects to finance part of the capital cost with debt and the balance from cash flow generated by operations. In light of the uncertainty resulting from the Covid-19 pandemic, the company is also reviewing its original estimates and assumptions for the quantum and timing of cash flows expected from the current operations against the anticipated financing requirement for the underground expansion program.

The company's $50 million revolving term working capital facility with the Bank of Nova Scotia has been extended by one year to May 5, 2021. The Bank of Nova Scotia has first ranking security by way of a charge over the company's Karowe assets and a guarantee by the company's subsidiaries, which hold the Karowe assets. As part of the extension, and until Lucara obtains greater clarity on its cash flow projections in the short-term, Lucara has agreed to limit capital expenditures related to the underground expansion project. The extension of this facility provides an important source of liquidity to Lucara during a period of significant uncertainty in global markets.”

Oil & Gas

Kosmos Energy – “Production in the U.S. Gulf of Mexico was unaffected by Covid-19 and averaged approximately 28,300 boepd net (80% oil) during the first quarter, at the top end of guidance. The strong performance was primarily due to better than expected performance at Odd Job and Kodiak. During the first quarter, Kosmos recorded approximately $10 million of exploration expense related to the unsuccessful Oldfield-1 well.

As a result of current market conditions, the operator of the Delta House host platform in the U.S. Gulf of Mexico has chosen to shut-in the facility during the month of May 2020 and accelerate planned maintenance. While the majority of our fields have a positive operating margin at $10 HLS, the shut-in of Delta House will impact second quarter production by approximately 5,500 boepd (net) from fields processed through this facility. In addition, we will temporarily shut-in approximately 1,500 boepd (net) at other facilities during 2Q, resulting in approximately 7,000 boepd of net Kosmos production shut-in during the second quarter. We currently expect the shut-ins to last through the end of May, however timing will depend on future market conditions. The shut-in of fields in the U.S. Gulf of Mexico occurs on a seasonal basis as a result of hurricanes and based on this experience we do not expect any damage to the reservoirs.

Full year net production guidance in the U.S. Gulf of Mexico is expected at the lower end of the of 24,000-28,000 boepd range assuming the shut-ins last through May.

Ghana – Production in Ghana was unaffected by Covid-19 and averaged approximately 26,500 barrels of oil per day (bopd) net in the first quarter of 2020, slightly ahead of expectations. As forecasted, Kosmos lifted one cargo from Ghana during the first quarter. Full year guidance of ten cargos remains intact.

The Jubilee gas enhancement project was successfully completed in February with subsequent production rates of around 90,000 bopd being achieved. The operator is also increasing water injection capacity from two pumps, which is expected to provide the necessary pressure to support the reservoir while providing redundancy with a third pump available as needed. In addition, we have seen consistent gas offtake from the Ghana National Gas Company of around 90,000-100,000 mscf/d, which should help maintain higher oil production in the future.

On TEN, the field is currently producing over 50,000 bopd. The Ntomme-09 producer well has been drilled successfully and completion operations are now underway with the well scheduled to come online later this quarter.

Full year net production guidance in Ghana of 27,000-29,000 bopd is unchanged.

Equatorial Guinea – Production in Equatorial Guinea was unaffected by Covid-19 and averaged approximately 11,600 bopd net in the first quarter of 2020. Kosmos lifted 0.5 cargos from Equatorial Guinea during the quarter, which was lower than quarterly guidance of one cargo due to an operational lifting issue, which pushed half a cargo from late-March into early April. Full year net production guidance of 11,000-13,000 bopd and cargo guidance of 4.5 cargos is unchanged.

Mauritania & Senegal – Phase 1 of the Greater Tortue Ahmeyim project located offshore Mauritania and Senegal is now approximately 33% complete. However, the breakwater installation has been disrupted as a result of Covid-19 mitigation measures, meaning a delay to the project of approximately 12 months. This delay has resulted in a significant reduction in activity and budgeted spend in 2020, and the BP development carry is now expected to last through 2020 with remaining project capex spread over 2021, 2022 and 2023.

As previously announced, on February 11, 2020, Kosmos and its partners signed a Sale and Purchase Agreement (SPA) with BP Gas Marketing Limited for 2.45 million tonnes per annum of liquified natural gas from Phase 1 of the project for an initial term of up to 20 years. Signing the SPA allowed Kosmos to book approximately 100 mmboe of proven reserves associated with the project.

The planned sell down process of our interests in Mauritania and Senegal is ongoing with remote management presentations supported by virtual data rooms.

Cost Reductions – In response to current market volatility, Kosmos has identified capital reductions in the base business of around 40% from discretionary expenditure largely from exploration activities in the Gulf of Mexico, our basin-opening exploration portfolio, and other non-critical work that does not impact safety and asset integrity. The company is now targeting base business capital expenditure of $200-$225 million in 2020, while keeping 2020 production within the range of previous guidance and with minimal expected impact on 2021 production.

Kosmos has taken steps with the operators of our producing assets to target a reduction in operating expenses of approximately $2-3 per barrel in 2020. In addition, Kosmos is reducing cash general and administrative (G&A) costs in 2020 by approximately 40%, through a reduction in headcount, no planned employee cash bonuses and other identified reductions.

These capital, operating and G&A cost reductions lower the company's costs for 2020 by approximately $250 million, or 30% in total.

Dividend – In March, the Board of Directors of the company made the decision to suspend the dividend, which will result in cash savings in 2020 of approximately $57 million.”

Real Estate

Primary Health Properties# – “Primary Health Properties PLC ("PHP" or the "Company"), one of the UK's leading investors in modern primary healthcare facilities, announces that it has acquired a portfolio of 20 purpose-built medical centres, located across England and Wales, for a price of £47.1 million, before costs. As part of the same transaction, PHP has conditionally contracted to acquire a further two medical centres for £6.9 million, before costs.

The acquired properties are leased to GP practices, other NHS healthcare operators and pharmacies, with approximately 91% of the rental income being government backed and substantially all of the leases are reviewed to the open market on a three-yearly cycle.

This acquisition will increase PHP's portfolio in the UK and Ireland to a total of 510 assets with a gross value of just under £2.5 billion and a contracted rent roll of £131 million. Following completion of the portfolio acquisition and capital commitments PHP has undrawn loan facilities and cash totalling £289 million.

Rental collection continues to remain robust – In the UK, 98% of rents for the second quarter of the year have been collected with £0.7 million still outstanding, approximately half of this is now subject to an agreed monthly payment plan. Short-term rent concessions for the quarter have been given on rents totalling less than £0.1 million.

In Ireland, 97% of rents due by 1 April 2020 have been collected with less than €0.1 million still outstanding.

Retail

Dignity – “Operating performance in the first quarter was broadly in line with the Board's expectations when allowing for the number of deaths witnessed in the period and some early operational impacts of COVID-19.

Number of death - The absolute number of deaths increased by approximately one per cent to 161,000 from 159,000 in the comparative period last year. Sadly, since the end of the quarter, the UK has witnessed in excess of 20,000 deaths in a single week, the highest since the beginning of 2000. The number of possible incremental deaths as a result of COVID-19 is a matter of substantial speculation. Should 2020 witness a large number of incremental deaths, beyond the 600,000 originally anticipated by the Office for National Statistics, then it is possible that 2021 and 2022 could experience a lower number of deaths than in 2019. The Group will not speculate on the most likely outcome.

Funeral operations - Funeral market share - The Group performed 20,000 funerals in the first 13 weeks of the year (Q1 2019: 19,200), representing a market share of 12.2 per cent (Q1 2019: 12.0 per cent). The current crisis means that analysis of the various trials being undertaken by the Group is unlikely to be meaningful in the coming months, as clients are unable to make all the choices they would normally make to personalise their funeral arrangements. Allied to this, market share is calculated based on a fixed assumption of one week between the registration of the death and the date of the funeral. Therefore, if clients choose to delay funerals, calculations of market share, particularly over shorter periods, may not be comparable.

…average income in the first quarter of the year was lower than the last quarter of 2019. This reflects the continued roll out of the Group's tailored funeral options, trials of different lower priced propositions, and the early impact of COVID-19. Underlying ancillary income per funeral was lower in the first quarter, reflecting lower sales of memorial and other items.

As a result of the crisis, the Group decided to temporarily withdraw the provision of limousines in the interests of the welfare of our staff and clients. Other choices such as church services also stopped being possible during this time. In April, these changes have had a significant impact on the Group's average income per funeral: firstly, average income from full service funerals has reduced to approximately £3,150. In addition, as might be expected, the proportion of clients choosing a simple funeral compared to a full service funeral has increased dramatically to approximately 60 per cent compared to the 20 per cent seen in the first quarter. Combining these impacts means the Group is currently achieving an overall weighted average income per funeral before ancillary revenues of approximately £2,200 compared to £2,648 achieved in the first quarter of 2020.

Crematoria operations - For most of the quarter, crematoria operated as expected. However, whilst cremation activity continues as normal, legislation required all crematoria to close their grounds to the general public, unless they were attending a cremation service. Consequently, memorial sales activity started to decline in March, resulting in slightly lower revenue than anticipated. Guidance on access to crematoria and cemetery grounds is evolving. However, memorial sales activity will be lower than normal whilst broader lockdown measures are in place. Whilst this will be temporary, it is unclear what proportion of memorial activity that would have otherwise been sold will be able to be recovered later in the year once operations resume.

Pre-need operations - Sales of pre-arranged funeral plans were as anticipated in the first quarter, resulting in active pre-arranged funeral plans of 532,000 compared to 523,000 at December 2019 and 493,000 at the end of March 2019.

In April, whilst many potential members continue to actively research pre-arranged plans online, certain routes to market, in particular those selling face to face have seen a decline in activity. The Group continues to assess appropriate pre-arranged marketing activity considering the current situation.

In its 2019 annual report, the Group disclosed that the actuarial valuations of the Trusts that hold and invest monies of a significant proportion of the active pre-arranged funeral plans showed a surplus equivalent to two per cent of the assets held. The Trusts' investment strategies are expected to provide returns in excess of inflation in the longer-term, but will however, result in volatility year-on-year in the value of the Trusts' assets. As a result of the impact of the current crisis on global markets, this volatility has been seen since the year end. Information as of the middle of April estimates that the actual valuation would now show a deficit equivalent to approximately six per cent of the Trusts' assets. This reflects an estimated 10 per cent decline in the market value of the Trusts' assets from approximately £1 billion to circa £900 million.

On 7 May 2020, HM Treasury indicated that as a result of COVID-19, the government now intends that the secondary legislation bringing funeral plan firms within the remit of the Financial Conduct Authority ('FCA') will be laid before parliament in the fourth quarter of 2020 and that this date will be kept under review as the crisis progresses. They intend for the full FCA regulatory framework to come fully into force 18 months after the legislation is made.”

Support Services

Cerillion – “The coronavirus pandemic has created seismic economic and social disruption globally, and we have taken additional precautions to protect staff health. From a trading perspective, as yet, the company has not experienced any significant slowdown in activity. We believe that this reflects the nature of the Group's customers, being predominantly telecommunications businesses providing critical infrastructure and services. Data traffic levels have also increased markedly as a result of national lockdowns across the globe.

At this stage of the crisis and with drastic emergency measures still in place in many countries, it is difficult to predict customer behaviour. However, we remain confident of progress over the balance of the current financial year, supported by our strong back order book. We are also in a good position with potential major new orders at varying stages of negotiation.

In response to the coronavirus pandemic and to protect staff, we have moved to home working worldwide, and the company has been able to continue its business without significant interruption. Most staff were already used to some measure of remote working and the company regularly uses on-line collaboration tools to facilitate work across multiple locations.

In October 2019, we won a major new contract worth £2.9m with a mobile virtual network enabler (MVNE) in South Africa, continuing the strong succession of wins from June 2019. We are now very well advanced into the delivery of our charging and product management solutions for this new customer.

Demand from the existing customer base was strong over the first half, with our larger, newer customers driving a significant proportion of new orders. We saw demand across the scope of our product and service offerings, including for additional modules, managed services, training and general consultancy. In particular, we agreed a major contract extension with Manx Telecom, in which Manx Telecom will upgrade their Cerillion platform and move to a new SaaS agreement under a five-year contract.

This demand helped to increase new orders at end of the first half by 28% to £9.5m year-on-year (H1 2019: £7.4m). In turn, this has driven a 57% rise in the back order book to a new record level of £24.2m at 31 March 2020 (H1 2019: £15.4m). These contracted (but not yet recognised sales) will drive revenues over the coming quarters. Supported by a 20% increase in the annualised run rate of recurring revenue to £6.05m (H1 2019: £5.05m), they also provide the company with a level of resilience in facing the potential challenges inherent in the coronavirus crisis.

Revenues continue to be internationally orientated, and we are making good progress in the Asia Pacific region, as well as in the Americas. The new relationship with a US telecoms provider signed in February last year, one of our largest wins to date, will support ongoing opportunities in this geography.

The BSS/OSS solutions that we provide remain a core requirement for telecommunications operators and service providers, whose mobile and broadband infrastructure is currently more essential than ever in supporting remote interaction for businesses, communities and public services. In April, we released the latest version of our Enterprise OSS/BSS suite, Cerillion 8.1. It is one of two major software releases that we make each year, and those customers that choose our pioneering Evergreen software model can benefit from all of these upgrades. These regular software releases bring customers continuous benefits as well as regular communication touch points.”

iEnergizer – “The Group has continued to operate as effectively since the Government of India imposed a nationwide lockdown on 25 March 2020 to reduce the spread of Covid-19 in India.



The Group has taken important steps to ensure that it is well positioned to fully support the requirements of its clients and staff. After a transition for the first two weeks of the lockdown period, iEnergizer is pleased to report the business is operating at 80% to 90% efficiency on all services to its clients and there has been no other disruption, with the majority of the Group's employees now successfully transitioned to remote working.

Whilst it is difficult to predict how long India will remain in some form of lockdown and the long-term economic repercussions of Covid-19, the Group's balance sheet, net cash position along with our long-term customer relationships remain strong. iEnergizer remains in discussions with these clients to ensure the Group meets their needs and requirements throughout this unprecedented period.

The situation is improving whilst the lockdown measures ease with some employees returning to the Group's offices. This provides the Directors with confidence that the Group's operational efficiency will increase to normal levels as the Government of India continue to reduce the lock down measures.”

Lifting restrictions

• Some regions of Spain (c51% of the population) will progress to Phase 1 of a four-step easing plan. In regions that made the cut, such as the Canary and Balearic Islands, bars, restaurants and shops will open at reduced capacity, and museums, gyms and hotels will also be allowed to open with restrictions. Gatherings of up to ten people will also be allowed.

• In France, primary schools will start with small numbers of pupils today, and clothes shops, bookshops, hair salons and florists will reopen. Restaurants, cinemas and bars will remain shut.

• In Belgium, the majority of businesses will open today albeit with social distancing. Restaurants, bars and cafes remain closed. The country is also allowing households to invite up to four guests to their home.

• In the Netherlands, primary schools will partially reopen today. Libraries, physiotherapists, driving schools and hairdressers will also open.

• In Switzerland, both primary and middle schools will reopen but classes will be reduced in size. Restaurants, bookshops and museums can also open but with certain restrictions.

• In Denmark, shopping centres can reopen today while in Poland, hotels can reopen this week – although foreign tourists would still have to quarantine for two weeks.

• Sri Lanka, which has more than 800 cases, will begin easing lockdown restrictions today. Government and private business can restart with a limited number of staff

• Cyprus has been able to design one of the most detailed and comprehensive Covid-19 economic recovery roadmaps in Europe. It is a four-phase plan which commenced last week. Highlights are: • Phase 1. May 4 to May 20: Construction has re-commenced and selected shops have re-opened, including outdoor markets and bazaars. School and religious gatherings of up to 10 people are allowed. Full breadth of the public sector services had resumed operations. Senior schools to re-open today.

Phase 2. May 21 to June 8: Restrictions on movement and curfew times fully scrapped. Full resumption of port operations (excluding cruise passengers). Museums, historical sites and marinas to re-open. Gatherings of up to 10 people permitted.

Phase 3. June 9 to July 13: Airport and airlines to resume operations in a phased manner. Shopping malls, department stores, hotels and gyms to re-open with distancing measures.

Phase 4. July 14 onwards: Relaxation of other major restrictions. Festivals and concerts permitted. Decision still to be taken on how to phase-in tourism from overseas, which will possibly be restricted to countries of low viral risk.



Other

• Golf courses in England are preparing to reopen from Wednesday. New guidelines mean golfers will be allowed to play – on their own or with one member of their own household.

• The starting point for lockdown fines in England will rise to £100 from Wednesday. The first fine will be lowered to £50 if paid within 14 days, according to the Home Office. Fines will double for each repeat offence, up to a maximum of £3,200.

• Jury trials in England and Wales are to resume from next week, the Lord Chief Justice Lord Burnett has announced.

• Passengers arriving from France will be exempt from forthcoming UK coronavirus quarantine measures.

• Footfall to UK high streets, retail parks and shopping centres fell by more than 80%, its fastest rate ever in April. According to Springboard.

• Saudi Arabia is tripling its VAT from 5% to 15%. The government also said it would suspend its cost of living allowance.

• Cargill’s plant in Quebec has shut after 13% of its workforce tested positive for the virus.

• According to the Minnesota Pork Producers Association, an estimated 10,000 pigs are being euthanised every day in the state, as processing plants shut down.




#corporate client of Peel Hunt