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Headlines
Restrictions extended in areas of Greater Manchester.
UK house prices rose by 2% in August.
Australia’s GDP shrank 7% in Q2.
US won’t join WHO-led vaccine efforts.
Major study finds steroids cut death rates.

Company news
Buildings & Construction
• Barratt Developments# – “Covid-19 and the lockdown period significantly reduced completion volumes, increased costs and impacted profit:
• Total Covid-19-related costs of £74.3m, comprising £45.2m of safety costs, non-productive site costs and site-based employee costs and £29.1m related to an expected increase in site durations.
• After Covid-19 costs, adjusted profit from operations was £507.3m (2019: £904.3m) at an adjusted operating margin of 14.8% (2019: 19.0%).
• After adjusted items of £13.9m comprising CJRS grant income of £26.0m (which was repaid in FY21) and legacy properties costs of £39.9m, profit from operations was £493.4m (2019: £901.1m).
The sales performance across all regions in the new financial year to date has been encouraging, with net private reservations per average week of 314 (FY20: 250), resulting in net private reservations per active outlet per average week of 0.94 (FY20: 0.68). We have also seen a substantial increase in home completion volumes in the eight weeks to 23 August 2020, which were up 62.4% compared to the prior period at 1,439 homes including JVs (25 August 2019: 886 homes including JVs). The increased activity levels are being stimulated by a combination of pent-up demand, the Stamp Duty holiday and an understanding that Help to Buy will only be available to first time buyers and regional home price caps will exist from April 2021.
We are pleased that since the start of the new financial year we have seen our production increase, constructing the equivalent of 347 homes in the week ending 23 August 2020 and we are on track to deliver our planned output.
Based on current market conditions, construction activity levels and assuming no further lockdowns, we expect to grow wholly owned completions to between 14,500 and 15,000 homes in FY21, and in addition around 650 completions from our joint ventures, whilst ensuring we maintain our industry leading standards of quality and service.”


Financial
• Alpha FX – “After a strong Q1, trading in Q2 was marginally down against the comparable period, following the impact of Covid-19. However, as the world begins to recover from the impact of Covid-19, we have seen the Group's performance return to the levels we saw in Q1, with a strong Group performance recorded in both July and August.
Since the period end, our core FX risk management business in the UK and Europe and our more recent investments have performed well, with strong client acquisition across the board, our Canadian office posting a record month for revenues and client acquisition in August, and Alpha Payment Solutions already achieving a record third quarter for revenues after only two months.”
• Mattioli Woods – “Covid-19 is significantly impacting the UK and global economies. We have taken positive and decisive action to protect our clients and staff, and to ensure all our core business areas remain fully operational throughout this complex time. Our investment in technology has enabled our employees to work remotely and our thanks go to all our employees who have helped to protect the business by agreeing to forego bonuses that would have been paid in more normal trading conditions. In addition, certain of our higher paid employees significantly reduced their basic salaries, with these actions reducing costs for the year ended 31 May 2020 by £2.6m.
We expect that uncertainty around Brexit and the impact of Covid-19 will continue to influence investor and consumer sentiment in the short-term, but we believe the opportunity for Mattioli Woods is significant, as people seek to take charge of their money and manage it through the generations. At the same time, savings and investments are becoming more complicated. Clients need long-term advice and strategies more than ever before. We will continue to provide quality solutions, maintaining our focus on client service and continuing to adapt our business model to the changing market, integrating asset management and financial planning to build upon our established reputation for delivering sound advice and consistent investment performance, while looking to reduce clients' costs.”


Food, Drinks & Household
• Accrol Group – “The Group entered the new financial year in a stronger position than ever before. We are looking to the future with confidence, as we build on the firm foundations created during the turnaround, to build a larger and sustainable growth business in a rapidly expanding market.
We have already successfully broadened our customer base, and this is expected to continue over the next 12 months to include the vast majority of major UK grocery retailers. Accrol remains unique with its broad customer base in its ability to benefit across all revenue streams wherever they materialise.
The Group continues to perform well and is on track to meet market expectations for FY21, despite some fluctuations in consumer shopping habits creating a short-term reduction in discounter volumes in Q1 FY21, as detailed in the CEO's Review. Whilst mindful of the ongoing risks of Covid-19, the Board is confident in the prospects for the Group and its ability to capitalise on opportunities in both its core markets, and the wider new personal hygiene and household sector.”


Healthcare
• Uniphar – “The Group has performed in line with latest expectations for the six months to June 2020 at both a gross profit and EBITDA level. While the Covid-19 trading environment has given rise to significant challenges, it has also created several opportunities for growth. These new opportunities, coupled with our investment in digital solutions and diversity in our product and services lines have helped mitigate the impact of Covid-19 on the business and has resulted in the Group delivering overall organic gross profit growth of 5% for the first half of 2020.
Commercial & Clinical was affected by Covid-19 due to elective surgeries being delayed in the initial stages of the pandemic, however we have seen increasing levels of activity since June as restrictive lockdown measures are eased. The diversity of the portfolio and the range of products offered have helped mitigate the impact of Covid-19 on the business. Covid-19 has highlighted the importance of Uniphar's investment in digital solutions, allowing the organisation to respond effectively to extreme circumstances, further cementing our relationship with key healthcare stakeholders.
Product Access has performed well during the period, activity increased for certain service offerings following the onset of Covid-19 lockdown measures and restrictions with levels now normalising as restrictions are eased.
Supply Chain & Retail saw strong growth in volumes in March due to increased demand with the onset of Covid-19, with volumes reducing while lockdown measures and restrictions were in place, before returning to more normalised levels as restrictions were eased.
The measures taken to protect our people, suppliers and customers, together with the implementation of Government guidelines has given rise to certain cost increases, but we have worked to identify savings ensuring effective cost control.”


Leisure
• The Gym Group# – “The impact of the Covid-19 pandemic forced the closure of the entire estate of The Gym Group on 20 March 2020. With the majority of our sites in England reopening on 25th July 2020, this meant that during the first half of 2020 our sites were closed for over 3 months. Our business entered the crisis in a strong position following a successful trading period in January and February with membership at the end of February of 891,000. Financially, the Board's prudent approach to financing meant that we had a low leverage balance sheet with Net Debt of £47.4 million and Net Debt: EBITDA of 0.98x at 31 December 2019. However, the prolonged period of closure meant virtually no revenue as a result of our commitment not to charge members whilst their gyms were closed, which meant a challenging time even for a healthy business such as ours.
Operating a business with no revenue and ongoing uncertainty over the future reopening date required decisive action to create financial resilience. This meant making operating cost reductions and central cost savings, commencing landlord rent negotiations as well as securing increased liquidity from the debt and equity raise. Focus then turned to the marketing, technology and operating protocols that were necessary to support the reopening and bring colleagues back from furlough and welcome members back with confidence. The Board has maintained a regular weekly virtual meeting to support this decision-making process. Together with the executive leadership it has sought external expert input to our new protocols and is now visiting many sites to ensure these necessary standards are being upheld. This routine supports our confidence in the success of the reopening and the flexibility required to manage in the current environment.
Current Trading
• Estate now reopened nationwide; gyms in England re-opened on 25 July with gyms in Wales opening on 10 August 2020 and gyms in Scotland opening on 31 August 2020
• As at 25 July, prior to the first gyms re-opening, total membership was 658,000 members
• 4 new sites, which had been under construction prior to lockdown, opened during August, taking total number of sites opened in 2020 to 8 and total number of gyms in estate to 183
• As at 31 August 2020, total membership was 676,000 members; 639,000 paying members and a further 37,000 members on 'free freeze'; average age of members is 32
• In the first five weeks of trading, the number of joiners was up 30% year-on-year and cancellations were up 6% year-on-year
• LIVE IT penetration at 22.3% at 31 August 2020 (Dec 2019: 18.9%)
• Gym visits growing week on week as member confidence increases;
• Non-Property Net Debt at 30 June of £29.2 million; liquidity headroom of £70.8 million within £100.0 million RCF
• Cash flow positive in August 2020 after re-opening on 25 July 2020.”


Support Services
• Computacenter – “The successful trading performance seen in the first half of the year has continued for the first two months of the second half. As we consolidate our forecasts for the rest of the year, it has become clear to the Board that the likely out turn for the year as a whole will be materially above the Board's previous expectations as set out in the Group's Trading Update Statement announced on 22 July 2020.”
• Johnson Service Group – “Positive momentum into the first months of the year was brought to a halt from mid-March as the impact of Covid-19 began to affect our customers. On 20 March we announced that we were starting to see a significant reduction in HORECA processing volumes with more limited impact on Workwear. In May we updated the market that HORECA revenue had fallen by some 97% in April whilst Workwear was down 12%.
We confirmed that we had mothballed the vast majority of our 18 HORECA sites, furloughed a significant proportion of our employees from the end of March, most notably within the HORECA division, and implemented temporary salary reductions for the Board, Senior Management and a number of administrative roles.
Our initial focus, once sites were mothballed, was the preservation of cash resources and a plan to reduce non-essential capital and revenue spend was implemented.
Since the end of June we have continued to see a further gradual reopening of some of our Workwear customers who had temporarily closed operations and we expect that to continue, albeit we remain vigilant as to the potential impact of ongoing employment levels of Workwear customers.
HORECA revenue has benefitted from summer staycations, which have been slightly ahead of our initial expectations, but it is too early to forecast the anticipated volumes for the remainder of this year. Performance in the final quarter of the year will remain closely correlated with the wider level of economic activity.
Given this uncertainty we are constantly assessing the anticipated volumes as we move into the autumn with a view to matching our resources to processing requirements. We have entered into consultation with employees at some of our HORECA sites with a view to changing working practices to minimise potential headcount reduction.
We anticipate that there will continue to be further opportunities for consolidation of the market.
In view of the ongoing impact of Covid-19 and the resultant uncertainty around HORECA we remain unable to give guidance on the outcome for 2020 although we currently anticipate that the Adjusted EBITDA margin for the full year will be similar to that in the first half.
It remains very difficult to predict with any accuracy the timing of a recovery to pre Covid-19 levels. However, with our strong balance sheet, established market position and reputation for quality service, we remain confident in the Group's medium-term growth prospects as the economy and markets that we serve recover.”


Technology
• Gooch & Housego – “The Group's manufacturing locations in the UK, USA and China are now fully open, thanks to measures that were quickly and efficiently put in place by our site teams, minimising the disruption of the Covid-19 pandemic for our customers whilst keeping our employees safe. Most recently, our Torquay site in the UK has returned to full capacity.
Trading levels in June and July reflected the recovery in the Company's manufacturing capacity and some of our larger customers' manufacturing sites reopening.
Orders for fibre optics, hi- reliability fibre couplers for undersea cables and our A&D and life science capabilities remain robust. There continues to be improved demand for medical diagnostics, in particular for ventilator systems. As previously communicated, industrial laser demand remains at below ‘normalised’ levels, although the semiconductor subsector has demonstrated sustained improvement.
The previously announced cost control measures have been implemented and will support the Group's profitability in H2 FY '20 and beyond.”

Other
• Greece has been added to Scotland’s quarantine list. Travellers from Greece will be required to self-isolate at home for 14 days on arrival in Scotland from Thursday.
• Residential evictions have been halted in the US on public health grounds. The order, from the US Centers for Disease Control and Prevention, lasts through 31 December and applies to individual renters earning no more than US$99,000 in annual income.
• Greek authorities have delayed the re-opening of schools by a week to 14 September.
• The US has indicated that it will not participate in international coalition efforts to find and distribute a vaccine for Covid-19 because the World Health Organization (WHO) is involved.
• Australia has fallen into recession for the first time in almost three decades; GDP figures from the Australian Bureau of Statistics have shown that the economy shrank by 7% in the last three months as a result of the coronavirus pandemic.
• UK travel company Tui has cancelled all holidays to the party resort of Laganas on the Greek island of Zante because it says customers have failed to follow coronavirus safety measures.
• The Venice Film Festival is back. The first such event since the pandemic began, La Mostra is a little different from normal. There’ll be masks and social distancing, but some 6,000 people are still expected to attend.
• The organisers of London’s Winter Wonderland have cancelled the event this year.
• Nationwide says UK house prices rose by 2% in August, taking the average price to £224,123, in what is an “unexpectedly rapid” recovery in the housing market.
• Treating critically ill Covid-19 patients with corticosteroid drugs reduces the risk of death by 20%, an analysis of seven international trials has found, prompting the World Health Organisation to update its advice on treatment.