Coronavirus - 08 December


• UK administers first dose of Pfizer/BioNTech vaccine
• Mass testing in Slovakia brought infections down 60% in one week
• Scotland sees all 11 Tier 4 councils return to Tier 3
• Switzerland and Italy halt cross-border rail travel

Company news 

Buildings & Construction

 Ferguson – “Since the start of the second quarter Ferguson has continued to generate low single-digit revenue growth in broadly flat markets, although we remain cautious on the outlook for the year as a whole, considering current pandemic trends.”


 Porvair# – “As previously announced, the group’s aerospace, molten metal and most industrial order books had reduced sharply through the middle of the year. Costs were adjusted and the group will charge exceptional restructuring costs of around £2.0m in the second half.

Since July order books have been building steadily from a lower base. The group was consistently profitable and cash generative in the second half, and showed sequential growth between the third and fourth quarters. The economic outlook for aerospace and some industrial segments remains uncertain but orders for the first quarter of 2021 in the Laboratory division are strong. Investment in productivity, skills and new products have continued at pre-Covid levels throughout 2020.”

 Tyman – “The trading momentum seen in Q3 has continued to exceed expectations into Q4, with strong underlying demand being experienced in all three divisions. We are engaging very closely with our customers and suppliers to meet these elevated levels of demand, given industry-wide pressure on inventories and service levels especially in North America.’

Supported by our strong trading and high levels of cash generation, the group maintains significant liquidity headroom. As a result, the group intends to repay the £2.3m received in 2020 under the UK Government’s Job Retention Scheme. We plan to make this payment in full in December 2020.”


 Joules# – “The positive trading trends reported in the group’s update on 5 November 2020 have persisted through the important Black Friday trading period and into the Christmas trading period so far, with sales for the period remaining ahead of the board’s initial expectations. This performance continues to be driven by strong e-commerce growth, with total e-commerce sales up by 35% in the period and revenue from Joules’ own e-commerce channels up by 45%. E-commerce represented more than 70% of the group’s retail revenue during the period.

Despite the strong e-commerce sales growth, total retail revenue of £75.3m was 6% lower than the comparable prior year period as a result of the enforced store closures as well as lower overall footfall trends where and when stores have been open. When comparing the period that Joules stores were open against the prior year, store sales were ahead of the board’s expectations and 17% lower YoY. Total store sales in the Period were down by 46% YoY.

Retail gross margin decreased by approximately 3pp in the period. This reduction was the result of increased promotional activity during the first three months of the period, particularly within the stores channel reflecting the clearance of elevated levels of spring/summer stock within a highly competitive retail environment following the first national lockdown.”

Support Services

 Mears# – “With local and/or national Covid-related restrictions likely to persist well into Q121, near-term forecasting inevitably remains difficult. However, 2021 should see the group transition back to our more normalised levels. Our central case is that work volumes in Maintenance remain at or near current levels (c.80%) until spring. By contrast, continued Covid-related restrictions are likely to keep user numbers elevated within our central government contracts before returning to more normalised levels in H221.”

 Redde Northgate – “VOH has now recovered to above pre-Covid levels, with closing VOH at the end of October 2020 9% higher than April 2020 in both Northgate UK&I and Northgate Spain. There has been no discernible impact of the November lockdown on VOH in the UK.

Vehicle disposal channels re-opened over the course of May such that they were fully operational from June, with significant improvement in residual values compared to prior year in the UK driven by strong market pricing, which has been approximately 15% above expected levels. Retail disposal channels closed again in November in the UK but vehicles have continued to be sold via other channels such that this impact of the November lockdown has been managed. We expect the strength of market pricing to reduce over H221.

Post the first national lockdown accident and incident volumes started to increase as traffic volumes picked up but remained below expectations and as a result there exists significant opportunity for Redde profits to rise back to historic levels in the future. Having recovered to approximately 20% below normal volumes in September, the volumes in October were approximately 30% below normal volumes and in November were lower than this due to the lockdown and we continue to review our cost base accordingly.”


• Denmark is re-imposing tighter restrictions on 38 towns and cities, including Copenhagen and Aarhus. As of tomorrow restaurants and bars will shut, and many children will be sent home from school.

• Hong Kong is set to impose new virus restrictions to battle a fourth wave of coronavirus – evening dining at restaurants will be banned, fitness centres closed, and people urged to work at home.

• Scotland’s First Minister Nicola Sturgeon confirmed that the 11 council areas subject to the highest tier of restrictions – level four – will all move into level three on Friday.

• Japan’s government has approved more than $700bn in fresh stimulus to fund projects from anti-coronavirus measures to green tech, the country’s third such package this financial year.

• Switzerland and Italy will halt all cross-border rail service from Thursday, as train personnel do not have capacity to carry out the Covid-19 safety checks ordered by the Italian government, the Swiss Federal Railways (SBB) has said. The move, in place indefinitely, affects dozens of daily routes, including long-distance trains between Milan and Frankfurt, Germany, as well as regional trains that connect the two countries, where many workers travel daily across the border from northern Italy to Switzerland.

#corporate client of Peel Hunt