Coronavirus - 29 October


• Scotland sets which regions fall into its new levels
• Catalonia closes its borders and extends closure of restaurants
• France requires students to wear masks from age six
• Oxford to join Tier 2 from Saturday

Company news
Buildings & Construction
• Foxtons – “Lettings: Revenue for the third quarter was down 8% to £19.5m (Q3 2019: £21.3m). Whilst volumes in the London lettings market over the summer months returned to close to pre-pandemic levels, average revenue per tenancy was lower due to fewer high value short-term lets and a significant reduction in the number of overseas student tenants and corporate relocations.
In September we acquired a lettings book with 140 tenancies for £0.5m, funded from existing cash balances. The acquired book will be integrated into the existing Foxtons network and is expected to be earnings enhancing from 2021. We have a good pipeline of potential lettings book targets and expect further acquisitions to complete before year-end.
Sales: Revenue for the quarter was £6.9m, down 18% (Q3 2019: £8.4m) due to depressed levels of exchanges, a hangover from the spring lockdown. However, sales activity, including the number of instructions and number of offers accepted, has been significantly higher than the same period last year, driven by pent-up demand post lockdown and Stamp Duty relief. This started to convert into revenues in September, which were up 9% on prior year.
At the end of the quarter, the sales commission pipeline, based on the value of properties ‘under offer’, was up around 30% on the same time last year. However, as has been widely publicised, transactions are taking longer to move through to exchange and the economic uncertainty is also driving higher than normal transaction fall-through rates.”

• Standard Chartered – “We expect similar fourth-quarter seasonality to last year, and anticipate client demand to increase over the course of 2021, as more of the markets in which we operate start to come out of recession. The impact of the significant reduction in interest rates that occurred earlier this year should be fully reflected over the next two quarters, with the net interest margin stabilising slightly below the current level in that timeframe.”

Support Services
• RPS Group – “There are pleasing signs of recovery within RPS. The contracted order book continues to improve, with all segments either holding or improving their three-month order book and contributing to a 4% increase overall at the end of September 2020 compared to June 2020. Our AAP Advisory and Project Management divisions and the majority of the Consulting UK & Ireland divisions are experiencing growth in their three-month order book compared to September 2019. Despite this encouraging trajectory, we remain cautious and continue to suspend guidance due to the uncertain macro-economic climate and the potential further restrictions arising from the increasing number of Covid-19 cases in the UK and North America.”

• In France new rules come into force on Friday. People will need to fill in a form to justify leaving their homes, as was required in the initial lockdown in March, and social gatherings are banned.
• In Germany new restrictions come into force from 2 November, until 30 November. Bars and restaurants will close except for takeaway, but schools and kindergartens will remain open. Social contacts will be limited to two households, with a maximum of 10 people, and tourism will be halted.
• The London Ambulance Service has reported that the average daily number of suicides and attempted suicides attended by crews now stands at 37, up 70% on 2019 and 200% compared to five years ago.
• On Wednesday Five more Spanish regions – Madrid, Castilla, Leon and Castilla-La Manch, Murcia, and Andalusia – said they would close their borders ahead of the All Saints’ Day long weekend, joining Navarra, La Rioja and the Basque Country.
• The Spanish region of Catalonia today announced a ban on entering or exiting its territory for 15 days. It will also extend a 15-day shutdown of bars and restaurants.
• Schoolchildren aged six and over in France will be required to wear facemasks in class.
• Scottish First Minister Nicola Sturgeon has announced how Scotland’s regions will be divided up into the new five-tier system.
• Level 0 – no areas have been placed in the lowest category
• Level 1 – Highland, Moray, Western Isles, Orkney and Shetland
• Level 2 – Aberdeenshire, Aberdeen, Angus, Fife, the Borders, Dumfries and Galloway, Argyll & Bute, Perth and Kinross
• Level 3 – Inverclyde, East and West Dunbartonshire; Renfrewshire and East Renfrewshire, the City of Glasgow; South Ayrshire, East Ayrshire and North Ayrshire; Stirling, Falkirk and Clackmannanshire; the City of Edinburgh, Midlothian, West Lothian and East Lothian; North and South Lanarkshire
• Level 4 – no areas have been placed in the top tier
• Finland’s government has announced it will lift its restrictions on opening hours for restaurants serving mainly food, but kept stricter rules on bars and nightclubs in place.

#corporate client of Peel Hunt