Coronavirus - 11 November


• EC buys 300m doses of Pfizer vaccine
• Russia claims its Sputnik vaccine is 92% effective
• France to double ICU capacity
• Students in England given six days in December to return home
• Heathrow NAM routes decline 95%

Company news

• Renold# – “The trends exiting the period suggest that order intake should continue to improve slowly, albeit this is likely to be at levels below the prior year in the near term. The immediate outlook varies by both geography and sector, and is difficult to forecast; however, Renold benefits from its geographic, customer and sector diversity. The tight focus on cost and cash management in the first half has created a strong platform, from which the group can manage through short-term disruption, whilst retaining the ability to invest in support of our strategy as markets recover.”
• Ricardo – “In the quarter to 30 September 2020, overall order intake was strong at £105.2m, up 19% on the pre-Covid quarter to 30 September 2019 (“the prior period”). This is also up on the £70m of orders received in the quarter ended 30 June 2020. All segments delivered an increase in order intake compared to the prior period except for Performance Products, which, as expected, received fewer orders in respect of McLaren engines.
Whilst the level of orders received in the first quarter has been strong, the automotive order intake did include over £20m in respect of two large multi-year programmes, which are workable over a longer period. In addition, we continue to experience challenging conditions in Automotive & Industrial (A&I) EMEA and expect the order intake that is workable in the short term to remain at a low level in the remaining months of H1. With this mix of orders received and forecast, we expect the group’s revenue and trading performance to be materially more weighted towards the second half of the current financial year than in previous years.”

• J D Wetherspoon – “Sales in October were significantly lower than the previous months, following the imposition of a number of new restrictions, including changes in the tier categories, a 10pm curfew, a requirement to order all food and drink ‘at the table’, and the mandatory use of face masks when moving around inside pubs.
As of today, 756 pubs in England, Northern Ireland and the Republic of Ireland are closed. These pubs will remain closed until the company receives guidance from the UK and Irish governments to the effect that pubs are permitted to reopen. There are currently 64 trading pubs in Scotland and 51 in Wales. The Scottish pubs, in particular, are subject to an extremely onerous tier system which, as has been widely reported, is having a serious effect on trade.”

Real Estate
• Great Portland Estates – “The Covid-19 pandemic has accelerated a number of trends in our key markets, the most pronounced to date being the detrimental impact it has had on the retail, hospitality and leisure sectors, particularly in large urban centres. However, we are also seeing early shifts in the nature of demand for offices. We stressed the growing importance of flexibility, sustainability, technology and increasing levels of service provision at our Investor and Analyst Event earlier in the year, and Covid-19 has pushed these themes further up occupiers’ and investors’ agendas.
Service provision has been key to supporting our occupiers through the pandemic. Our Occupier Services team has been working closely with our customers to keep offices open, Covid-secure, and more recently to help them return to their offices safely. We have been utilising technology, via our ‘sesame’ app, to enable touch free access to buildings, and using sensors to monitor air quality to ensure adequate fresh airflow.
Looking beyond the current disruption, we expect the experience businesses and their workforces have had through the pandemic will have some lasting influence on how they use offices in the future. Once the government requirement for office staff to work from home has passed, we expect the need for greater workforce agility to remain. A recent survey by Savills suggests that, post pandemic, the majority of workers would like to work from home only one or two days a week, with only 6% with a preference for full time. Against this backdrop, successful office spaces will need to fulfil our natural desire to congregate and provide an environment for collaboration, creativity and common purpose. Whilst this may require less traditional desk space, it will require a greater variety of communal spaces to enable and encourage the activities that are not best achieved remotely.
In our view, as we look forward, the best buildings will need to provide flexible work settings, support the health and wellbeing of employees, promote sustainability and be more human and connected to the communities in which they sit. Buildings that cannot meet these criteria risk being stranded. This plays to our strengths. We have a portfolio that is well suited to this evolving demand, with 82% of units in our portfolio being less than 10,000 sq ft, more than 93% of the portfolio at sub ten storeys in height and an average building size of around 60,000 sq ft. Moreover, we have a track record of being at the forefront of technological change; our launch today of our Roadmap to becoming a net zero carbon business by 2030 further demonstrates our focus on sustainability and wellbeing, and we have the team and the skill set to deliver the spaces occupiers want.”

• Heathrow – 1.25 million people travelled through the airport last month, compared with 7.06 million during October 2019. North American routes saw the biggest drop, down 95% YoY.

• European Commission seals deal for 300m Pfizer/BioNTech vaccine doses. Under the deal, the 27 EU countries could buy 200m doses, and have an option to purchase another 100m.
• The number of people in US hospitals with Covid-19 now stands at 61,964, an all-time high, new figures from the Covid Tracking Project show.
• France is doubling the number of intensive care (ICU) beds to cope with the second wave of patients.
• The latest survey by the Institute of Student Employers (ISE) found that the number of graduate jobs declined by 12%, and that the majority of employers anticipated a further decline next year. Employers in the retail and consumer goods sectors made the biggest cuts, cutting 45% of graduate jobs.
• Iran imposed a nightly curfew on businesses in Tehran and other cities on Tuesday.
• In Lebanon, caretaker Prime Minister Hassan Diab announced a lockdown on on Tuesday night that will begin on Saturday and last until the end of the month.
• Students in England will be given a six-day window next month in which to travel home before Christmas, with mass testing carried out on campus before they are allowed to leave.

#corporate client of Peel Hunt