Coronavirus - 27 October


• UK researchers find 26% fall in antibodies across the population
• Warrington moved into Tier 3
• Russia imposes new curfews
• Italy sees protests against restrictions
• Long-term exposure to air pollution linked to 15% of deaths

Company news

Food & Household
 Cranswick – 43% of staff (144 out of 333) at the pork-processing facility in Norfolk have tested positive for Covid-19, and the full 1,000 personnel will now be tested. Production is continuing at the plant and the company hopes for this to continue; however, this will be determined by the health authorities. Exports are now suspended, which is expected to last roughly two months.


 HSBC – “We expect lower global interest rates to continue to put pressure on net interest income. Based on current interest rates, we expect further net interest income headwinds in 4Q20, with some stabilisation as we move into 2021.

Our ECL charge for 2020 is currently trending towards the lower end of the $8bn to $13bn range. This latest guidance, which continues to be subject to a high degree of uncertainty due to Covid-19 and geopolitical tensions, assumes that the likelihood of further significant deterioration in the current economic outlook is low, and that stage 3 impairments from now until the end of 2020 are broadly in line with the average quarterly charge for the year to date.

We expect to reduce the Group’s 2022 annual cost base beyond our original $31bn target, through exceeding our $4.5bn gross cost savings target. We expect to incur more than $6bn in ‘cost to achieve’ expenditure to generate these saves.”


 Bloomsbury Publishing – “Bloomsbury experienced excellent trading in the first half, with year-on-year profit growth of 60% to £4.0m. This has delivered our highest first half earnings since 2008 and exceeded the Board’s expectations.

Online book sales and e-book revenues were significantly higher.

The Consumer division had an excellent performance with 17% revenue growth and a £2.1m increase in profit before tax and highlighted items to £2.7m. Stand-out bestsellers during the period included Why I’m No Longer Talking to White People about Race, Crescent City: House of Earth and Blood, White Rage, Humankind and Such A Fun Age.

In the Non-Consumer division, our strategy of developing online academic resources, conceived five years ago, meant we were well placed to benefit from the accelerated shift by academic institutions to digital products to support remote learning. We saw 47% growth in sales of Bloomsbury Digital Resources as a result.”


 Quiz – “Store restructuring undertaken post year-end, resulting in lower future rental costs and more flexible leases. Further to the Restructuring, the group closed three stores in Spain.

The group has so far reopened 60 stores in the United Kingdom and four in the Republic of Ireland and is in negotiations with regards to a total of five further stores.

The Covid-19 pandemic has significantly impacted QUIZ’s sales in the current financial year, with stores and concessions closed for a number of months. As a result, the group’s total sales in the six months to 30 September 2020 amounted to £17.2m, a 73% decline on the £63.3m revenues generated in the previous year.”


 easyJet – “Following high levels of demand from the operating lease marketplace, easyJet is pleased to confirm that it has engaged with a number of operating lessors to raise further liquidity, which will be used to further strengthen easyJet’s financial position. easyJet confirms the sale and leaseback of nine aircraft with two counterparties. The transactions generate total cash proceeds of $398.6m.”

Travel & Leisure

 Revolution Bars# – ‘Since the UK Government’s enforced closure of bars in March 2020, the group’s management has undertaken significant and meaningful initiatives to protect the group’s ongoing viability. These have been covered extensively in previous announcements but include taking advantage of all relevant government support, management salary reductions, deferment of PAYE and VAT liabilities, a substantial increase in bank debt facilities, and an equity fundraising. Management have also sought to engage with the group’s landlords and gradually over the last seven months, a sharing of the rental burden has been agreed by approximately two-thirds of landlords, for which the board is very grateful. These arrangements cover a wide spectrum, but many comprise lease extensions or the removal of tenant break options in return for short-term rent relief.

The group has reported previously that comparable venue sales in the eight weeks from when it commenced the reopening of its bars on 4 July 2020 through to 29 August 2020 were 72.5% of last year, ahead of the level anticipated by the board at the time of the announcement of its equity fundraising. In the subsequent three weeks, comparable venue sales remained buoyant at 77.8% of last year, but in the last five weeks to 24 October 2020 have reduced to 49.4% due to the imposition of the 10pm curfew and more recently localised lockdowns, with more severe operating restrictions now affecting many of the group’s reopened bars.

Given the latest government restrictions under which the group is operating, the group’s trading outlook is uncertain and based on all the information and commentary available, the board now anticipates that the important Christmas trading period will be severely compromised and any return to near normal levels will not be possible before next Spring at the very earliest. When trading conditions return to more normalised levels it will be crucial for the group to be able to recover quickly, return to cash generation and be appropriately structured for the long-term. Accordingly, the board believes that it is in the best interests of all stakeholder groups for it to now propose a restructuring of certain of the group’s property interests through a CVA of one of its subsidiary entities RBL.”

 Whitbread – “Premier Inn UK’s occupancy increased from 51% in August to 58% in September and our total accommodation sales recovery year-on-year was c.6% ahead of the midscale and economy market in September. We continued to see good leisure bookings and a pick-up in business-to-business sales, albeit from a low base.

Since the government announcement in early October instructing working from home where possible and the recent regional lockdowns, we have seen a slowdown in the market performance. Our performance has remained ahead of the market, but with the fast-changing nature of the Covid-19 environment, near-term visibility remains limited. Despite this, profit and cash sensitivities for this year remain broadly consistent with those articulated in May.

The business expects to benefit from the government’s Job Retention scheme in the second half to the value of around £15-20m, which is partly offset by a c.£10m impact of the later-than-anticipated reduction in staff costs, resulting in a net £5m-10m benefit.”

• A team from Imperial College London found the number of people testing positive for antibodies has fallen by 26% between June and September. They say immunity appears to be fading and there is a risk of catching the virus multiple times.

• Warrington moved into Tier 3 Covid-19 restrictions as of midnight, requiring pubs and bars not serving substantial meals to close and banning households from mixing indoors or outdoors in hospitality venues or private gardens.

• Russia is ordering restaurants and bars to close between 11pm and 6am and tightening the rules on facemasks, insisting on face coverings indoors and fining businesses that fail to enforce the rules.

• Protests have taken place against Covid-19 restrictions in cities across Italy. There was violence in Milan and Turin as demonstrators clashed with police over the introduction of night curfews and the closure of restaurants, bars, gyms and cinemas.

• In Denmark the public will have to start wearing masks indoors in most public spaces from Thursday.

• The Czech Republic will start a curfew Wednesday night, from 21:00 to 05:00.

• Hong Kong will reopen public beaches and increase the number of people allowed to sit together in bars and restaurants starting from Friday.

• Long-term exposure to air pollution may be linked to 15% of Covid-19 deaths globally, according to research published in the journal Cardiovascular Research.

#corporate client of Peel Hunt