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Greece recently moved onto its third phase of releasing lockdown and is now setting out plans to open its borders for the holiday period. The Greek measures were some of the most proactive and strict in Europe and the country’s success is evident. However, as the rest of Europe still struggles to contain the virus, it seems unlikely this early effort will be rewarded. The country will not want all its hard work undone by allowing infected travellers in, but its already fragile economy is heavily reliant on tourism. It will be hoping the rest of Europe improves its efforts and catches up.

Headlines

• Rolls-Royce has said it will cut 9,000 jobs.

• UK CPI falls to 0.8% in March.

• Cambridge University to have no face-to-face lectures until summer 2021.

• Iran has extended Nazanin Zaghari-Ratcliffe’s release from jail.

• MoD scales back its military ‘Covid Support Force’.

• Global trade falls 12.4% according to the WTO.

Company news

Buildings & Construction

Tyman – “The Group's priority continues to be ensuring the health and safety of our employees, their families and our communities. We have implemented enhanced hygiene, social distancing and other best practice measures across the Group.



Following changes in government guidance, our facilities in Italy re-opened in the middle of April and our UK operations have progressively restarted in May. Our sites in North America are still operating with the exception of our two facilities in Juarez, Mexico. Shift patterns have been adjusted to observe social distancing measures and reflect the lower order intake. On a reported basis, Group revenue declined by 12% for the four months to 30 April 2020 compared with the corresponding period in 2019, with a decline of 39% in April. Trading was in line with our expectations until the middle of March. Since then, government lockdowns have severely disrupted construction and renovation activity across Europe, including the UK. In the US, construction has been regarded as an essential industry and activity has largely continued but with a marked reduction in demand.

Given the ongoing levels of uncertainty at this time, the Group is unable to resume guidance which was withdrawn on 3 April 2020.

Balance sheet and liquidity – The Group has a good level of liquidity headroom. At 30 April 2020, net debt excluding leases was £172 million and net debt to EBITDA ratio on a covenant basis was 1.8x (31 December 2019: 1.7x) compared with the covenant limit of 3.0x. The Group has a cash balance of £132 million as at 30 April 2020 representing an increase of £11 million since 31st March 2020. As previously reported, the majority of our revolving credit facility of £240 million has been drawn down, with £13 million remaining undrawn as at 30 April 2020.

The Group continues to focus on the optimisation of cash flow through disciplined management of cost, working capital and capital expenditure. As part of these measures and as announced on 3 April 2020, the Group has withdrawn the final dividend for the FY19 financial year. We have undertaken a number of other cost containment and cash preservation measures including progressing the self-help initiatives announced in March and utilising government support schemes where available. We continue to monitor the situation closely given the fluidity of the crisis.”

Vistry Group – “Vistry Partnerships had a strong start to the year, progressing its strategy of accelerating revenue growth and margin expansion through an increase in land-led contracting and mixed tenure development.



Our Partnerships business has led our return to site and is the most resilient part of our business in the current market conditions given the high proportion of revenue from contracting and pre-sold developments, which provides a high level of cash realisation. Over 70% of normal production capacity has already been restored as our teams get used to the new Covid-safe operating procedures.

We are operating across all of our 73 contracting sites and continue to increase the future pipeline. The contracting forward order book totals £827m.

In respect of Partnerships development activity, we are operating on 31 of our 34 sites. Interest from housing associations and investors continues to be strong, and demand from private buyers is improving steadily.

Housebuilding – In the first 11 weeks of trading in 2020, we saw a strong increase in the average sales rate per site per week, accompanied by some positive momentum on pricing. The business first reported a material impact on trading from Covid-19 from mid-March.

Our sales teams have successfully remained open to business throughout, taking virtual tours, new reservations, progressing exchanges and handing over completed homes during the period of lock down. Our sales offices have now reopened for appointments and the Group sees significant opportunity from increasing the use of online channels for all future customer interactions. Over the past eight weeks we are encouraged to have taken 447 gross private reservations, resulting in 300 reservations net of cancellations. The rate of sales has been an improving trend, with a sales rate of 0.26 over the past three weeks. We have exchanged on 310 homes and legally completed a total of 257 private sales in the eight-week period. Our pricing over the past eight weeks has been broadly in-line with our forecasts. In addition, levels of website traffic and prospects have been strong, and in recent weeks have returned to the levels we saw in January and February, indicating continued strong demand.

The Group has a strong forward sales position, with housebuilding reservations (including Vistry Partnerships development activity) totalling £1.5bn (including joint ventures).

We are currently operating on 119 out of a total 172 housebuilding developments and expect this to continue to increase. Our focus remains on the completion of homes which are watertight and where we have clear visibility of completion and cash realisation.

Business integration – We are very pleased with the progress made on integration and are ahead of where we expected to be at this stage. The new operating and reporting structures are in place and working effectively, with the rollout of consistent IT systems being the only outstanding programme.

We have extended the review of the Group following the acquisition, to further leverage the scale of the combined businesses. We are consulting with our teams, and anticipate that this will result in further headcount reductions, producing annual equivalent savings of c.£9.5m, increasing our anticipated total synergy savings to over £44m. The cost of these further savings is expected to be achieved within the total £35m exceptional restructuring costs previously announced.

Funding and liquidity – The Group remains financially strong. As at 18 May, the Group had net debt of £476m (21 April 2020: £440m) and committed banking facilities totalling £770m, with well spread maturities out to 2027.

We are pleased to have received confirmation that Vistry Group, subject to the Bank of England approving relevant documentation, is eligible in principle to access funding under the Covid Corporate Financing Facility ("CCFF"), should that be required.”

Financial

Ninety One – “In many ways the reporting period was a ‘year of two parts’. Most of the first 11 months took place against the background of rising markets and an expanding global economy. During this period, our short- and longer-term investment performance, as measured at firm level on an aggregate asset-weighted basis displayed an improving trend. As at the end of December 2019, our one- and three-year firm-wide outperformance stood at 81% and 71% respectively. This compared favourably with the numbers we released for the half year to 30 September 2019 (54% and 75% for one- and three-year firm-wide outperformance respectively).



After markets were hit by the Covid-19 correction in March 2020, the situation deteriorated to the point where our aggregate performance looked decidedly average over one and three years, where the percentage of our strategies, measured on an aggregate asset-weighted basis, that beat their benchmarks were 39% and 55% respectively. Value strategies had a particularly tough time. On the positive side, other global and emerging markets equity strategies delivered excellent results. Our South African strategies also reported strong performance. This period of market dislocation caused by the Covid-19 ‘black swan’ event will create opportunities for substantial alpha generation over the coming year and we intend to capture as many of these opportunities as possible. The past year has not been our best performance year, but the investment teams have been here before and know exactly what they need to do to improve the situation. They have the full support of the leadership team to achieve this.

Ninety One has strong client relationships, built up over many years. This is because clients come first at Ninety One. This is non-negotiable and central to the way in which we operate. Against a very challenging background for the active investment industry, we have achieved net inflows in line with the prior year. The flows were mainly driven by our fixed income and specialist equities offerings. Our five client regions (known as ‘Client Groups) have all generated net inflows, with the UK, Africa and Europe the best performers.

Our focus on developing our outcomes-based offerings across the advisor market was also well reflected in strong inflows in certain multi-asset strategies. Meanwhile, we remain confident that our substantial investments in our Americas and Asia Pacific Client Groups will deliver further value for our shareholders in due course.

Over the past year, Ninety One has increased its investment in technology to support our front office investment and client-facing teams. We are acutely aware of the benefits of our single and well-invested operations platform, which we have built over many years. The fact that we could grow over the past year, demerge, list and rebrand on schedule whilst coping with the Covid-19 imperative to enable more than 1,000 people to work from home without a major incident, tells the story of a robust, experienced, well-invested and well-run operations platform.”

TBC Bank – “[We] would like to update you on the measures that we have taken to adjust to the new environment and withstand the challenges caused by Covid-19, as well as present our financial and operating results for the first quarter 2020. I would also like briefly to discuss Georgia's macroeconomic outlook and the government's actions to mitigate the negative impacts of the pandemic.



Georgia has been fighting Covid-19 quite effectively by imposing strict shut-down measures in a timely manner, starting from mid-March. As a result, the number of Covid-19 cases has been relatively low compared to other countries. As the peak is believed to have passed, starting from the beginning of May, the country is gradually opening up and it is expected that most business activities will be resumed by mid-summer.

On the back of this development, monthly estimates of GDP growth demonstrate a gradual deterioration in economic activity in Georgia since the beginning of 2020. In 1Q 2020, real GDP increased 1.5% YoY, while the March growth estimate was negative 2.7% YoY. After solid 17.6% YoY growth in January, tourism inflows decreased by 5.2% YoY in February and dropped sharply by around 70% in March. In the same month, exports of goods and remittance inflows also took a hit, though much more moderately with 22.1% and 9.0% YoY declines respectively. Imports of goods also adjusted by 13.4% YoY. As the containment measures became more stringent in April 2020, growth is expected to turn even more negative in second quarter 2020 before it starts to turn positive. Alongside the relatively successful containment of the Covid-19 outbreak, the government also managed to secure the necessary resources to cushion the shock on the economy and the exchange rate. Given the announcement of around USD 1.6 bn in additional funding for the Ministry of Finance and the National Bank of Georgia (‘NBG’), the fiscal sector is expected to be strongly expansionary, partly offsetting the negative impact on growth. Furthermore, the government announced a substantial international package of support to the private sector. Meanwhile, the NBG has introduced a more active FX intervention policy to increase the FX supply to the economy during this period of distress. Overall, based on the latest IMF projections, the Georgian economy is expected to contract by 4.0% for the full year 2020 before recovering to a growth of 4.0% in 2021. Our own macro projections indicate a 4.5-5.5% slowdown in 2019 and 4.0-5.0% growth in 2021.

The NBG has implemented counter-cyclical measures to support the financial stability of the banking system and to ensure the provision of financial support to sectors of the economy affected by the current turmoil. The measures include a significant reduction in capital adequacy requirements and standby liquidity support incentives. In addition, the NBG coordinated the creation of loan loss provisions across the banking system.

In terms of our operating results, we have managed to change our operating model swiftly and continue with our daily operations with minimum disruption, while maintaining the health, safety and well-being of our staff and customers as the number one priority. We have introduced a number of additional security and infection prevention measures in our branch network. We have also introduced remote working practices for most of our head office and back office units. As a result, today, 95% of our head office and back office staff (including those in our call center) are working from home, while our market-leading digital banking platform allows our customers to continue with almost all of their banking transactions from the safety of their own homes. Overall, the total number of digital transactions grew by 19% year-on-year, mainly driven by increased number of transactions conducted in mobile banking. As a result, the off-loading ratio amounted to 94%, while mobile banking penetration ratios stood at 44%, up by 5.1 pp year-on-year in the first quarter 2020. In order to support our customers during this difficult period, in March we introduced a three-month grace period on principal and interest payments for all our individual and MSME customers as well as those corporate customers whose business is most exposed in the current situation.

Due to the Covid-19 pandemic, we have accounted for the following non-recurring charges to our profit and loss statement in the first quarter 2020, leading to a net loss of GEL 57.0 million:

• a net modification loss, in the amount of GEL 30.6 million, to reflect the decrease in the present value of cash-flows resulting from the three-month grace period granted to borrowers; and

• An extra, front-loaded credit loss allowances, in the amount of GEL 215.7 million (or GEL 210.9 million for loans), to prepare for the potential impact of the Covid-19 pandemic on the Georgian economy, resulting in an additional 1.7% cost of risk for the first quarter. Excluding this additional provision, the annualized cost of risk stood at 0.9%.



Without Covid-19 impact, we recorded an operating income of GEL 290.3 million, up by 6.7% year-on-year, mainly driven by growth in net interest income and FX income. Over the same period, our net interest margin stood at 5.1%, down by 0.2 pp compared with the previous quarter, primarily due to pressure on FC loan yields driven by the decrease in the libor rate, the increase in GEL cost of funding, as well as currency depreciation. At the same time, our operating expenses remained broadly stable YoY, leading to a cost-to-income ratio of 36.5%, down by 1.2% pp year-on-year. Consequently, our net profit without Covid-19 impact stood at GEL 152.4 million in the first quarter 2020, which resulted in return of equity without Covid-19 impact and return on assets without Covid-19 impact of 22.4% and 3.3% respectively.

In constant currency terms, our loan book remained broadly stable on a quarter-on-quarter basis, growing by 3.2%, while our deposits increased by 2.3%. As a result, our market share in total loans and total deposits stood at 39.4% and 39.8% respectively as of 31 March 2020.

Our liquidity and capital positions remain strong. As of 30 March 2020, our net stable funding (NSFR) and liquidity coverage ratios (LCR) stood at 124.7% (128.7% April 2020) and 107.6% (117.3% April 2020) respectively. After the impact of the currency depreciation and additional provisions related to the potential impact of Covid-19, our CET1, Tier 1 and Total CAR stood at 9.1%, 12.0% and 16.7% respectively as of 31 March 2020, above the corresponding eased minimum regulatory requirements of 6.9%, 8.8% and 13.3%. As already announced, with the aim of preserving capital, our Board of Directors has decided not to recommend the payment of dividends at the upcoming annual general meeting.

In a significant development, in April 2020 we obtained our banking licence in Uzbekistan, which will allow us to start our operations in June 2020. Our strategy is to establish a greenfield, next-generation banking ecosystem for retail and MSME customers in Uzbekistan with a primary focus on digital and partnership-driven channels. Given the current operating environment and the impact of Covid-19, we have further optimised our business model with enhanced emphasis on asset-light and cost-efficient operations.

We have already invested USD 12.6 million into the charter capital of our Uzbek bank and expect to invest an additional USD 9.4 million by the end of 2020. Potential new shareholders, including the European Bank for Reconstruction and Development, the International Finance Corporation and the Uzbek-Oman Investment Company, have also expressed their interest in participating in an additional capital increase by our Uzbek bank later this year, subject to their internal approvals. We will remain the majority shareholder with 51% interest.

Our Uzbek payments subsidiary, Payme, continued to grow rapidly in the first quarter of 2020. Its revenue increased by 47% YoY, while its EBITDA increased by 21%. The number of customers reached 2 million as of 31 March 2020.

Going forward – In light of the Covid-19 pandemic, we have reviewed our strategic priorities given increased pressure on capital and people as well as emerging new opportunities. We have refreshed our strategic priorities for the next 3 years. While the main themes have not changed, we have prioritized digital channels, customer centricity, data analytics and international expansion.

At the same time we will be concentrating on prudent management of our capital and liquidity positions, leveraging our robust risk management system to closely monitor and proactively manage asset quality. In parallel, we will be focusing on cost optimization with the aim of keeping the Bank's cost to income flat for 2020 compared to 2019, despite the pressure on revenues and the currency depreciation. In this regard, management has decided to forgo their entire bonuses for 2020 and LTIP grants for the 2020 cycle.

The crisis has provided a strong validation of our digital strategy and has also revealed a number of opportunities that we will be exploring to further enhance our operational model. I feel confident that we are well positioned to achieve sustainable growth and to deliver superior results to our shareholders in the medium-term, despite the short-term challenges caused by Covid-19. Therefore, I would like to reiterate our medium-term targets: ROE of above 20%, cost to income ratio below 35%, dividend pay-out ratio of 25-35% and loan book growth of around 10-15%.”

Healthcare

Renalytix – “RenalytixAI, Inc. and Mount Sinai today announce the formation of Kantaro, a Mount Sinai venture, to develop and scale production and distribution of a test kit based on the Mount Sinai-developed high-performance serologic assay for SARS-CoV-2 antibodies. Kantaro has partnered with Minneapolis-based Bio-Techne Corporation to develop and launch the new kit, with the goal of producing more than ten million patient tests per month by July. The two companies have formed a joint commercialization and distribution team to support the rapid distribution of kits to clinical laboratories in the US and around the world.



Kantaro’s SARS-CoV-2 test kits are designed for use in any authorized clinical testing laboratory without the need for proprietary equipment. The technology underlying the kits was created by a team of internationally recognized scientists and clinicians, including members from the Departments of Microbiology and Pathology, Molecular and Cell-Based Medicine within the Icahn School of Medicine at Mount Sinai. The original Mount Sinai test was validated in The Mount Sinai Hospital's Clinical Laboratories, and has been performed on over 30,000 patient samples. The Kantaro test kit, an enzyme-linked immunosorbent assay (ELISA), builds on this test technology and is designed to measure the presence or absence of anti-Covid-19 antibodies in addition to measuring the titer (level) of antibodies a person has produced. The kit will utilize not one, but two virus antigens, the full-length spike protein, and its receptor binding domain, necessary for viral entry into cells.”

Industrials

Coats Group# – “Group sales for the period declined 17% year-on-year on a CER basis, which reflected 21% organic decline and a 4% contribution from the acquisition of Pharr High Performance Yarns (Pharr HP) which was bought in February. The 17% year-on-year decline on a CER basis consisted of 23% decline in Apparel and Footwear (A&F), with some offset from Performance Materials (PM) which grew 6% (including the initial contribution from Pharr HP). On a reported basis Group sales for the period declined 19%; the marginal headwind vs CER rates being due to the recent depreciation in the Indian Rupee, Brazilian Real, and Turkish Lira. The 17% CER decline in Group sales for the period included a decline of 50% in April as the wider demand and supply disruptions from Covid-19 impacted the Group, as anticipated.

The Apparel and Footwear decline for the period reflected the impact of brands and manufacturers cancelling or deferring orders from mid-March which significantly impacted demand into April. In addition enforced government closures of our facilities impacted some of our major Apparel and Footwear markets throughout April, for example India / Bangladesh, which remained closed across the whole month. We have, however, started to see a number of these enforced government closures now being lifted, and at present only 2 of our c.50 manufacturing sites (across A&F and PM) around the globe are now subject to enforced closure (against 15 in the March Trading Update).

Performance Materials organic sales in the period declined 12%. The reported CER growth of 6% included an 18% contribution from Pharr HP. Demand in April was impacted by Covid-19 albeit not to the same magnitude as Apparel and Footwear. Heavily reduced order levels were seen in the end use area of Transportation as global car production continues to decline, and orders were also affected by some of the enforced government site closures noted above. However, certain end use areas such as Telecoms and Energy, and Personal Protection, performed more resiliently as demand for critical infrastructure and safety products remained relatively buoyant.

Our unwavering focus on supporting customers through these difficult times has already delivered incremental new customer wins as we are able to leverage our global footprint, flexibility and customer service offering successfully to deliver high quality products at speed. We are also providing help and support as part of a global effort to fight Covid-19. For example, we are providing excess threads for free to enable production of vital pieces of PPE, and launched Coats Fast Start, a digitally enabled initiative, which supports manufacturers switching parts of their production facilities and supply chains to help address the global shortage of PPE.

Management actions – As noted in our March trading update, we are taking the necessary actions to manage our cost base and cash resources prudently in order to manage net debt and keep a good level of headroom. We therefore anticipate that our Q2 like-for-like (i.e. excluding Pharr HP) operating cost base (which includes Cost of Goods Sold, administration and distribution costs) will be around 40% lower than 2019 due to strong management actions and lower activity levels. In addition, our projected full year capital expenditure will reduce by c.70%. We also remain focused on managing our working capital closely, including the heightened credit risk that these times of uncertainty presents.

In agreement with the trustees of the Coats UK Pension Scheme, we have agreed to defer the remaining deficit recovery payments for 2020 (April – December inclusive), to provide an additional c.$17 million of headroom cover during this year. The catch up of these payments are currently anticipated to commence in mid-2021 and be evenly spread over a period of around 18 months. We will continue to pay the scheme administrative expenses during this time (c.$5 million p.a.).

Balance sheet update – We entered 2020 with a robust Balance Sheet, generating healthy levels of cash, and with comfortable headroom on our banking covenants, which place us in a strong position to manage through this period. As at 30 April 2020 our net debt (excluding IFRS16) was $253 million.

Our committed debt facilities total $575 million across our Banking and US Private Placement group, with a range of maturities from late 2022 through to 2027, and we currently have around $235 million of committed headroom against these banking facilities. This is broadly in line with the $230 million committed headroom we noted in our March trading update (as at the end of February) and is largely as a result of the prudent actions we are taking to manage our liquidity position through this initial period of uncertainty in March and April.”

Newmark Security – “The Covid-19 pandemic and resultant restrictions put in place by governments around the globe has had an inevitable impact on the Group and its customers. The Company took action ahead of UK Government restrictions by implementing remote working across both divisions in March 2020 and, whilst the Group's core business supply chain remains intact, areas such as sales, service and installations have been impacted by social distancing but continue to operate. Some of the Group's customers' projects have been placed on hold or are being progressed with longer lead times.



Both Grosvenor and Safetell responded quickly to support critical infrastructure and other related industries as a result of the pandemic. Safetell has seen an increased demand in the supply and installation of hygiene screens and night-pay hatches, which enable retail sales transactions to take place whilst adhering to social distancing. Grosvenor has prioritised its technical support for NHS sites and has further supported its customer base with a programme of online training.

The Group is also looking ahead to the ‘new normal’ for its customers with expected market evolution towards 'contactless' methodologies being adopted in the HCM sector. Additionally, Safetell's advanced door portals would provide safer employee working conditions and/or customer interaction.

Outlook – Although the Group's divisions have continued to operate, it is not possible at this stage to know what the impact of Covid-19 will be on trading for the current year. The Company has taken remedial actions available to it, including a programme of staff furloughs and temporary pay reductions for all staff, and has been liaising with its financial stakeholders.”

Rolls-Royce – “The impact of Covid-19 on Rolls-Royce and the whole of the aviation industry is unprecedented. We have already taken action to strengthen the financial resilience of our business and reduce our cash expenditure in 2020. It is, however, increasingly clear that activity in the commercial aerospace market will take several years to return to the levels seen just a few months ago. We must now address these medium-term structural changes, as demand from customers reduces significantly for our civil aerospace engines and aftermarket services.



Warren East, Rolls-Royce, CEO said: ‘This is not a crisis of our making. But it is the crisis that we face and we must deal with it. Our airline customers and airframe partners are having to adapt and so must we. Being told that there is no longer a job for you is a terrible prospect and it is especially hard when all of us take so much pride in working for Rolls-Royce. But we must take difficult decisions to see our business through these unprecedented times. Governments across the world are doing what they can to assist businesses in the short-term, but we must respond to market conditions for the medium-term until the world of aviation is flying again at scale, and governments cannot replace sustainable customer demand that is simply not there. We have to do this right, which means we will work closely with our employee and trade union representatives as appropriate, look at any viable alternatives to mitigate the impact, consult with everyone affected and treat our people with dignity and respect.’ We are proposing a major reorganisation of our business to adapt to the new level of demand we are seeing from customers. As a result, we expect the loss of at least 9,000 roles from our global workforce of 52,000. In addition to the savings generated from this headcount reduction, we will also cut expenditure across plant and property, capital and other indirect cost areas. The proposed reorganisation is expected to generate annualised savings of more than £1.3bn, of which we expect headcount to contribute around £700m. The cash restructuring costs related to these actions are likely to be around £800m, with outflows incurred across 2020 to 2022.

The proposed reorganisation will predominantly affect our Civil Aerospace business, where we will carry out a detailed review of our facility footprint. It will also have implications for our central support functions. Our Power Systems business and ITP Aero are currently developing, negotiating and executing extensive measures to deal with the current situation. Our Defence business, based in the UK and US, has been robust during the pandemic, with an unchanged outlook, and does not need to reduce headcount. As part of the reorganisation, we will ensure that our internal Civil Aerospace supply chain continues to support our defence programmes and explore any opportunities to move people into our Defence business.

Due to the need to consult with the appropriate employee and trade union representatives, we are not providing further details of the impact of the proposed reorganisation on specific sites, or countries, at this stage. The restructuring announced on 14 June 2018 will transition into this wider proposed reorganisation. Focused predominantly on reducing the complexity of our support and management functions, the programme has substantially delivered on its objectives.”

Leisure

Playtech – “As Covid-19 continues to impact the global economy, Playtech is doing everything it can to mitigate the effects of the outbreak on its staff, its partners and its business. Management has taken decisive action to ensure the health and wellbeing of its employees and to preserve cash flow, while continuing to provide customers with Playtech’s leading technology to deliver what they need. Actions taken include the deferral or cancellation of capital expenditure, strict working capital management, suspension of shareholder distributions, salary reductions across the Company (including 20% for all members of the Board and the executive management team), reduced working hours in certain locations, significant reduction of marketing spending, reduced office and maintenance costs, and the renegotiation of timing of cash outflows including contingent consideration payments due in 2020.



Playtech enacted its business continuity plan in the early stages of the Covid-19 pandemic with many of its offices moving to remote working during February to protect employees' health and safety, while remaining locations transitioned in early March. Playtech has managed this transition while maintaining productivity levels and delivery deadlines.

Playtech has also made its Safer Gambling engagement tools and data analytics technology, including BetBuddy, available to all operators across the industry for free during the crisis.

Results for period 1 January 2020 to 30 April 2020

Overall, Playtech had an extremely strong Q1 2020 with Adjusted EBITDA of €117 million. This was in large part driven by the exceptional performance of TradeTech which, as stated on 19 March 2020, benefitted significantly from increased market volatility and trading volumes. In addition, the Group benefitted in January and February from a very strong performance from Snaitech and favourable sporting results.

Despite Covid-19 starting to severely impact some of the Group’s businesses, the results for March as a whole were in line with the Company's original pre-Covid-19 expectations with strong performance from the Company's online business including Live Casino, its JV partners as well as a particularly strong performance from TradeTech. These positive trends have continued which has resulted in Adjusted EBITDA of €23 million for April, with Adjusted EBITDA for the first four months of 2020 totalling €140 million.

Safer Gambling – Playtech recognises that at this unprecedented time, the industry needs to provide an increased level of player engagement and data analysis to identify, support and protect customers who may be experiencing increased levels of risk. As a result, Playtech has made its Safer Gambling engagement tools and data analytics technology, including BetBuddy, available to all licensees during the Covid-19 pandemic.

Playtech is supporting its licensees and partners to ensure that pre-Covid Safer Gambling commitments and industry codes of conduct to further safeguard consumers during the crisis are met and are effective. Across our B2B and B2C businesses we are actively reviewing advertising and operational procedures and are strengthening safeguards to account for the changing environment and new risks arising during the crisis, for the benefit of our licensees and end consumers.

Divisional review – Current trading

Core B2B Gambling – In B2B, Playtech's online businesses have performed very well so far in 2020 while the retail elements of B2B have been severely impacted by retail closures in various countries. Playtech's online Casino (including Live), Bingo and Poker businesses have seen significant increases in activity. Playtech's largest Live Casino facility, which is in Riga, has remained open throughout the pandemic. As a result, not only has the Live Casino business experienced strong growth, it has been able to take on traffic from one of the most significant providers of Live Casino in Asia that was forced to close its main facility in Manila (see further details below).

Playtech’s B2B Sport business is predominantly retail focused, through SSBTs, with its biggest markets being the UK and Greece. Betting shops in the UK currently remain closed. In Greece, the majority of retail locations have reopened, however the business remains impacted by the lack of major sporting events and competitions globally. The B2B Sport business is currently generating a loss of €3 million Adjusted EBITDA per month.

Despite the transition to remote working during the period, Playtech has continued to deliver on its operational objectives for 2020. Playtech has added new Tier 1 licensees including Betsson, Kindred and Svenska Spel. Playtech has added more than 20 new brands so far in 2020 and is on track to surpass its target of 50 for the year.

Playtech has extended its relationships to new products and/or geographies with existing customers including GVC and Fortuna while renewing contracts with licensees including Betfred and Mansion. Its structured agreement with Wplay in Colombia is progressing as planned with the next phase due to launch later in 2020. Playtech remains very excited about the opportunity this market presents. Live Casino has seen exceptional operational progress during the period with new customer signings and the launching of further tables and markets with existing customers such as GVC and PokerStars amongst others. In Poker, Playtech has seen a significant increase in activity and has added several major operators to its network so far in 2020.

B2C Gambling – Snaitech is currently performing better than was anticipated in the Company's announcement on 19 March 2020. While Snaitech continues to lose significant revenue from retail closures and the lack of sporting events, given the low fixed costs in this business and the revenues generated from online, as well as certain mitigating actions, Snaitech was only slightly loss making on an Adjusted EBITDA basis in April. The timing of the reopening of retail locations in Italy currently remains unclear. Snaitech achieved the number one market share position in the Italian sports betting market (retail and online combined) in Q1 2020, up from the number two position in 2019, showing its operational and brand strength.

As previously indicated, Playtech's white label business (predominantly Sun Bingo) has seen a strong performance so far in 2020.

Playtech's Retail B2C Sport business (HPYBET) is seeing restrictions eased with shops beginning to reopen in Germany and Austria.

Asia – Since Playtech's last trading update on 19 March, Playtech's revenues from Asia have been negatively impacted by government restrictions in China, Malaysia and the Philippines.

However, since late March these negative impacts have been more than offset by a contract with the leading provider of Live Casino in the region. The Philippines government's strict lockdown measures in Manila have forced many POGO license holders as well as Live Casino facilities to cease operating including Playtech's Live Casino facility in Manila. Playtech was not impacted by this closure as it was able to shift all traffic to its Riga facility. Playtech’s ability to offer seamless integration to its facilities led to an agreement with the leading Asian provider of Live Casino. The provider integrated into Playtech's Live Casino feed to ensure that it could continue to provide its product to its customers, resulting in an increase in Playtech's revenue for April. The integration to Playtech's facility in Riga was completed within days giving Playtech access to the Asian provider's extensive distribution channel highlighting the strength of Playtech's Live Casino offering in being able to integrate a major new customer in a very short timescale.

This temporary contract materially increased Playtech's revenues and EBITDA from Asia in April resulting in revenues of €8 million for the month. Playtech's revenue from Asia in May is expected to be approximately €6 million including a lower benefit from the Asian provider which began resuming its normal operations this month.

TradeTech – TradeTech continues to benefit from the recent increase in market volatility and generated Adjusted EBITDA of over €45 million in the period from 1 January 2020 to 30 April 2020. As mentioned in the Company's announcement on 19 March 2020, this performance already exceeds Playtech's FY 2020 expectations for this business.

TradeTech has also taken initial steps towards a more efficient balance sheet, which has released €10 million of cash that was previously tied up.” Media

Bloomsbury Publishing – “Since the year end, the coronavirus pandemic has led to significant disruption across all our key markets. The impact may be substantial. Orders for print books, which comprised 79% of the Company's revenue for the year ended 29 February 2020, are being affected in all our markets. Our UK, US and Australia warehouses remain open and continue supply to customers. Our strategy of expanding and leveraging our digital rights and products means that we are well placed to benefit from increased demand for our digital resources, audio and e-books.



There is no immediate certainty around the severity and duration of the impact on our business and therefore the Board is unable to provide guidance for the year ending 28 February 2021 at this time.

In response to the pandemic, the Board has taken swift measures to strengthen Bloomsbury's balance sheet and increase liquidity to ensure we have sufficient working capital to weather the impact of coronavirus and avoid damaging our business in the long-term.”

Real Estate

Great Portland Estates– “Whilst much of the year to March 2020 was characterised by political and economic uncertainty, nothing could have prepared us for the social and economic consequences of the Covid pandemic and I am proud of the response from each and every member of the GPE team. We are engaging extensively with our occupiers, offering assistance on a case by case basis and have established a new community fund, seeded by GPE's people to bring some relief to those in London hardest hit by the crisis.



As we examine the implications for our business, it is clear that we must plan for a recession with an increase in unemployment, leading to reduced occupational demand for space, implying falling rental and capital values. Key to our market's performance will be both the depth of the downturn and the shape of the recovery. Given this uncertainty, we are pausing the provision of guidance on rental value movements until the picture becomes clearer. Whatever the outcome, whilst some working practices might change, our human desire to congregate and create underpins our belief that London's magnetic appeal as a global business capital will persist for the long term. This belief is reinforced by our current leasing discussions, illustrating occupiers' ongoing appetite to secure high quality, sustainable space.”

Retail

Marks & Spencer – “The UK Food business outperformed the market and saw strengthening sales performance as changes to range, value, and customer communication took effect: revenue increased 2.1%, with LFL sales up 1.9%, strengthening throughout the year, including an estimated 0.3% benefit from the effects of Covid-19 in March. Operating profit before adjusting items increased 11.2%. Value perception has improved resulting in growth in volume ahead of value at 3.3%.



We set out the strategy for Food 18 months ago, rebuilt the leadership team and started the repositioning of the business to broaden its appeal and move to ‘trusted value’. The programme was picking up momentum prior to the crisis:

• Price investment was further strengthened through the launch of ‘Remarksable’ value and ‘Fresh Market Special’ lines, many at 65 pence. The level of promotions also continued to reduce. As a result, the price

index of comparable product baskets has improved compared with key competitors, resulting in better price perceptions

• A new programme of range innovation was brought forward including significant launches in healthy, Plant Kitchen, made without, and family product to broaden appeal. This was combined with innovative new marketing including Little Shop and Britain's Got Talent sponsorship

• 5 ‘test and learn’ renewal Food stores were opened showcasing more of the full M&S range in a modern engaging environment and testing new product innovations with encouraging results. We expect to move towards extension of these formats in the coming year

• Through Project Vangarde, which has now been rolled out to 90 stores, the leadership team has demonstrated scope for reducing waste, improving availability and running stores more efficiently.

Ocado Retail positioned strongly for growth – During the year we completed the purchase of 50% of Ocado Retail providing M&S with a profitable, scalable presence in online grocery, the UK's fastest growing channel. We reported a first time net income contribution for Ocado Retail to group profit of £2.6m for the 7 months to 1 March 2020, with the early contribution reflecting the limited period since completion. This is the contribution to group results prior to switchover to M&S supply on 1 September, which we expect to drive volume growth for M&S Food.

We have been working closely with Ocado Retail to create a ‘one business’ mentality which includes common operating procedures, business plan, and shared talent. Switchover and synergy plans are on track. The value of the investment we have made has been further reinforced by the strong growth reported by Ocado Retail since lockdown, with growth for the most recent 9 week period of 40.4% reported at its AGM on 6 May.

Reengineering Clothing & Home – The UK Clothing & Home business experienced a year of substantial reshaping under new leadership, resulting in some encouraging performance indicators in the second half. However, revenue declined 8.3% overall, with LFL revenue down 6.2%, including an estimated 2.2% adverse impact from Covid-19 in March. Online revenue was level. Operating profit before adjusting items declined 37.0%, largely driven by lower sales, gross margin headwinds related to sourcing and promotional mix and the impact of the crisis.

Trading in the first half was affected by availability issues in Womenswear and in the second half by teething issues with the move of Menswear towards a more contemporary style and fit. However, towards the end of the year, prior to the effects of Covid-19, performance in Womenswear and Kids was encouraging, Menswear saw improving sales trends and Lingerie held its market leading share.

• In Womenswear, reshaping the buy and more contemporary style resulted in improving performance up until the onset of the crisis. Recent range proliferation has been reversed by 11% in Autumn/Winter and the focus on core strengths and hero categories resulted in some strong uplifts. In denim the market leading position was extended with a sales uplift of over 10% over two years.

• The successful launch of Goodmove resulted in increases in share of activewear and growth in sales in this category of 16% in the three months post launch.



• Kidswear under a new leadership team started to reduce the breadth of range and focused on stronger casual basics at better value resulting in LFL sales growth in the second half.

• Menswear experienced initial problems with size and fit as the range migrated towards a more contemporary style and look, in order to address issues in the shape of buy. However, these issues should be non-recurring and we saw encouraging uplifts for instance in knitwear, the standout category, with LFL sales growth of 5.6%.

• Lingerie market share held at 27%, and strong performances from 'Collection' as option count was marginally reduced.

• Online performance improved prior to the adverse impact of Covid-19 on trading in March, but not as fast as expected and is being reorganised under new leadership as part of the post Covid-19 programme.

Changing the model in International – The first phase of transforming the International business has been the move away from direct ownership to a franchise and joint venture model, working with strong partners in high potential territories. The focus now is on localising ranges, reducing prices and will be increasingly on developing sales online globally.

International revenue at constant currency decreased 2.5%. Operating profit before adjusting items declined 15.2% to £110.7m, largely as a result of trading conditions in March.

The International online operation brings together operations in 44 markets including direct shipments from the UK, sales on third party marketplaces and sales fulfilled by franchise partners on their own websites. Online retail sales increased 26% to £103m, supported by the launch of 5 new transactional websites and an expansion of ranges on marketplaces.

Over £1bn of actions to reduce costs and manage cash under scenario planning for Covid-19.

The Covid-19 crisis started to have an impact on the business in the first week of March with reductions in UK Clothing & Home sales which declined by 6.2% and 26.9% the week after. With the onset of lockdown, the effect on sales, colleagues and customers in both businesses has been dramatic. Clothing sales at the low point dropped to 16% of their level a year ago. Without the resilience of the combined Food and Clothing business model and extraordinary loyalty of colleagues the impact on the business would have been even more profound.

Covid-19 scenario – Our belief has been from the outset that the direct impact of the crisis on sales and stock flow will last through the year and that subsequent demand may be depressed. In a challenging environment to forecast accurately the business is being managed against a ‘Covid-19 scenario’ created in the early weeks of lockdown, which reflects a very substantial reduction in sales, particularly in Clothing & Home and volatile Food trading in the early months of the crisis. This scenario has been stress tested and even in the event of a longer and deeper impact on trading, the group maintains sufficient liquidity. Although we will be drawing on our available credit facilities in the coming year, under the scenario the business will have significant liquidity headroom throughout the next 18 months. We are pleased to note that in the first 6 weeks of the new year, sales and cash have substantially outperformed the scenario. The scenario has the following core assumptions relative to our original FY 2020/21 budget:

• UK Clothing & Home, 70% decline in revenue for the four months to July and only a gradual return to original budgeted levels by February 2021 impacting annual revenue by c.£1.5bn.

• UK Food, 20% decline in revenue for the four months to July, with revenue level thereafter, impacting annual revenue by c.£0.4bn.

• International - Clothing & Home revenue to follow a similar pattern to UK Clothing & Home with a significant decline in April due to closures, impacting annual revenue by c.£0.2bn.

In the light of the prolonged partial or total lockdown envisaged in our Covid-19 scenario, we have taken actions totalling c.£1bn relative to original budget to reduce costs and manage cash, while protecting our transformation plans and trading potential.

Substantial cost reduction of c.£500m in FY 2020/21.

• Non-essential spending has been reduced at all levels. For instance, we expect Clothing & Home marketing to be down c.£50m for the year, pay levels and recruitment have been frozen saving c.£40m and technology costs will be down c.£40m.

• Costs which are largely related to sales volume are being managed down, for instance Clothing & Home logistics down c.£60m, colleague costs post lockdown saving c.£40m and International costs saving c.£30m.

• Fixed property related charges are expected to decline with service charge reductions, rent costs and other occupancy cost savings down by c.£20m before any more far reaching changes to the store portfolio.

• Government support measures including business rates relief of c.£172m and the job retention scheme of c.£50m will further support this year's outcome.



In addition to these savings we are exploring the potential for other changes, including a more streamlined support centre, changes to leadership structure and negotiations with landlords on commercial terms on lease contracts.

Actions to stabilise cash flow exceeding £500m.

In view of the steep increase in working capital resulting from unsold stocks we are experiencing a cash outflow during the lockdown period and expect to draw on our credit facilities in the months ahead. Under the Covid-19 scenario, drawings are estimated to peak in early Autumn at c.£600m, although our current performance would suggest a lower figure. To reduce risk, maximise liquidity, and enable a return to growth in the future steps have been taken to underpin cash flow and reduce working capital.



• Capital expenditure for the year has at this stage been reduced to c.£140m, saving c.£195m in cash outflow in the current year against budget. Only essential and short payback investment focused on growth has been retained such as the new ambient food depot, investment in online fulfilment and site development and the digital & data programme.

• Cash management initiatives including in-year deferral of corporation tax, VAT and duty payments and likely savings from lower corporation tax paid for 2020/21.

• As previously reported, there will be no final dividend for 2019/20 and the board does not expect to pay a dividend for the current financial year, using the funds instead for balance sheet support in the region of £340m.

Liquidity and additional headroom secured for 2020 and 2021.

It was an immediate priority for the company to secure its debt facilities to provide for the cash requirements modelled under the Covid-19 scenario described above and given the risk in an uncertain market to ensure there is downside protection under even more adverse sensitivities. Therefore:

• Formal agreement has been reached with the syndicate of banks providing the £1.1bn revolving facility to remove or substantially relax covenant conditions for the tests arising in September 2020, March 2021, and September 2021.

• We have confirmed that we are eligible to access funding under the Government's Covid Corporate Financing Facility and been allocated an issuer limit of £300m.

• As a result of these actions we expect to have considerable headroom under our available facilities in FY20/21. While we will experience a cash outflow in the first half of the year as sales reduce and we pay for our previous stock commitments, we would expect this to partly reverse in the second half of the year.

• Under the Covid-19 scenario, drawings against our available facilities would be in the range of £300m-£350m by the end of 2020/21.

• The cancellation of the final dividend of c.£130m will generate further cash savings after year end.



Experience to date has been ahead of the Covid-19 scenario against which we set strong cost and cash management plans and has outperformed the scenario by over £150m year to date, with actions planned to further improve our cash flow. If sustained, under the Covid-19 scenario we consider the Group well positioned to exit the crisis with limited drawdown against its facilities in 2020/21, with a further saving of the final dividend in the early months of next year. We intend to adopt a dynamic approach to investment using sustained cash flow outperformance to capitalise on strong investment opportunities under our ‘never the same again’ agenda.

Management of excess Clothing & Home stock.

Like all fashion businesses one of the biggest challenges arising from the crisis is the mounting backlog of unsold stock for Spring/Summer 2020 and the forward pipeline of stock already ordered for Autumn/Winter. We closed 2019/20 with Clothing & Home stock of c.£500m and at that time had committed forward orders of £560m scheduled to arrive in the following six months. As the lockdown eases a large proportion of current season stock will remain unsold and demand for many categories is likely to be weak. We have acted quickly to improve this position.

• We have cancelled late summer stock which will no longer be required reducing forward commitment at cost by £100m.

• Of the balance of stock and forward orders c.£400m is year-round basic product where M&S trades strongly and which will be carried forward at low risk, albeit creating a short-term increase in stock carrying levels.

• Of the unsold seasonal stock, we have made arrangements to hibernate around £200m until Spring 2021, secured storage facilities and planned for the cost of these actions.

• We have therefore taken a charge of £145.3m in adjusting items to reflect the cumulative impact of the combined handling, clearance, hibernation and write-off of the stock bulge described above.



The combined impact of lockdown, social distancing and depressed demand is therefore likely to continue through the year.

Never the Same Again – During the crisis we have all had to work differently and customers have rapidly changed habits and may never shop the same way again. We intend to use the learning from the crisis and have drawn up our ‘never the same again’ agenda to accelerate transformation.

What we are learning in the crisis.

The crisis illustrated how differently we can use technology, run stores, and make decisions fast. In a business with a history of slow cultural change we intend to use these lessons, to ensure that as lockdown eases, we are never the same again in culture, organisation and work habits. For instance:

• A smaller top team has made decisions faster and more efficiently delegating trading and operating management to business unit heads. Numerous working groups, committees and elaborate management processes have been disbanded.

• Support colleagues have learnt to improvise their routines at lower cost with no detriment to trading standards.

• Our strategic relationship with Microsoft has been highly effective, supported by Teams.

• In stores given the need to furlough and redeploy colleagues, valuable lessons have been learnt about our ability to multi-task and increase the pace of work with no adverse impact on service.

• Online has for a period been our only significant Clothing business and has illustrated the need to be leaner and more integrated to compete with online pure plays.

• The reduction in forward order volumes in Clothing has forced the need to change ranges to buy more of less from fewer core suppliers.



What will never be the same again.

Steps have already been taken to ensure that the change of gear of the last few weeks endures, including the following:

• Steve Rowe has already announced changes to the business leadership structure with the formation of a small executive board consisting of the operating MDs together with Katie Bickerstaffe who has now started as

Chief Strategy & Transformation Officer, and Eoin Tonge Chief Finance Officer who is arriving in early June

• Central support costs and headcount will be examined at all levels, delegating decisions to business unit and category heads.

• In stores, multi-tasking and more flexible management structures will be integrated into the way the business works and manages.

• Digital is being consolidated under a single transformation team bringing together data, online development and technology.

• The direct to the front-line tech enabled communication combined with increased flexibility in working patterns will become permanent.

Accelerating the transformation programme.

• The move to ‘trusted value’ in Clothing & Home will be accelerated and option count reduction and supplier concentration brought forward.

• The reduction in range and shift towards fast moving product at great value necessitated by the crisis will result in a permanent reduction of 20% in Autumn/Winter store option count.

• The role of the sourcing offices will be increased so that sampling, ordering and quality issues are dealt with offshore.

• A faster, ‘near-sourcing’ supply chain will be developed, to enable the test and re-order of seasonal fashion lines particularly for the online business.

• The replacement of ageing stores already underway and shift in relationships with property providers will accelerate.

• The longstanding issues with availability and waste in the Food supply chain will be tackled with the roll out of the Vangarde programme and addressing the contract and relationship with Gist.



Becoming an Online winner in C&H and Food

Customers may never shop the same way again. The sharp growth of online grocery during the crisis is evidence of this as is the strengthening performance of our online Clothing & Home.

The Ocado joint venture relationship is an integral part of our strategy to bring M&S Food into the online and home delivery market which we expect to be even more vibrant as a result of the crisis. Since the formation of the joint venture Ocado Retail has performed strongly and following lockdown, revenue in its most recently reported 9 weeks to 3 May was up 40.4%.

The Food business is now working closely with Ocado Retail to ensure that it has a compelling offer at the switchover from the Waitrose supply contract on September 1st.

• Adding over 6,000 M&S lines to Ocado from September compared with just c.4,000 Waitrose lines which will be removed from the site. We believe M&S has substitutes at the same price or lower, and of the same quality or better, for the majority of the current offer.

• Finalising product data sets for online trading, supply chain processes for direct to Customer Fulfilment Centre deliveries and switchover procedures for September.



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