• China sees further bounce back in its service sector
• US hospitalisations at a three-month high
• John Lewis to cut up to 1,500 jobs
• Manchester’s Nightingale hospital taking patients
Buildings & Construction
• Morgan Sindall – “In Construction & Infrastructure, the Infrastructure activities have continued to trade strongly, with revenue and margin well ahead of prior year. With the Construction activities also recovering well, it is expected that the overall divisional margin for the year will be in excess of 2%, reflecting the high quality of client relationships, operational delivery and risk management in the division.
In Fit Out, there have been no significant changes to market dynamics or customer behaviour. Although the secured order book at the end of September was 15% lower than at the same time last year, this is more than offset by the value of projects at preferred bidder stage. In addition, the value of tenders due in the final quarter of the year is 18% higher than for the same period last year.”
• Provident Financial – “Vanquis Bank delinquency trends were stable during the quarter and payment holiday take-up continued to reduce to less than 1% of customers at the end of September. As expected, customer booking volumes for the quarter were lower year-on-year, in-line with the tighter underwriting standards enacted earlier in the year. Customer spend increased by c.31% on the previous quarter but remains c.15% lower year-on-year, in-line with trends seen across the credit card market.
Moneybarn continues to see strong levels of demand for used vehicles across its markets and new business volumes during the period increased significantly on the previous quarter. Payment holiday take-up at the end of September was c.1.5% of customers with a vastly reduced take-up trend.
In Home Credit, collections performance remained strong and has now aligned to pre-Covid levels, with the proportion of collections being done via remote methods being over 80%.
Home Credit lending to existing customers was over 70% of normalised third quarter levels and new customer lending was c.60% of normalised levels, reflecting the impact of tighter lending criteria. The consultation to reduce headcount within the home credit business is complete and will result in annualised cost savings of c.£13m with exceptional costs to achieve of c.£2m in 2020. As seen across the sector, home credit experienced an anticipated increase in customer complaints during the period, which are expected to remain within 2020 forecast levels.”
• STV# – “Advertising trends have improved materially over Q3 and the start of Q4, albeit the Covid-impacted outlook remains uncertain.
Highest TV audience volume growth ever, +13% from January to October, with growth continuing into the autumn (+16% in September, +10% in October).” Retail
• John Lewis – has announced it will axe as many as 1,500 jobs at its head office, reducing costs by £50m, as it looks to make £300m in annual savings by 2022.
•M&S – “Group revenue decreased 15.6%. UK revenue declined 14.6% driven by Clothing & Home and International revenue declined 25.5%. As a result the group generated an adjusted loss before tax of £17.4m and a statutory loss before tax of £87.6m.
Statutory loss before tax includes total charges for adjusting items of £70.2m including charges of £92.1m related to organisation restructure and a £49.4m stock related credit representing the partial release of the provision established at FY19/20 as directly attributable to Covid following better than expected trading results.
Trading in the first four weeks of the second half has continued at similar rates to the end of Q2, with Food revenue up 3.0%, C&H revenue down 21.5% and International revenue up 7.4% due to the timing of shipments.”
• Mitie Group – “Trading has continued to be more resilient than expected. Second quarter revenue was up 12% on the first quarter, with monthly sequential improvements in sales particularly across Cleaning, Security and fixed Technical Services contracts. Our public sector contracts have shown good resilience during this challenging period and we have also seen strong performances from our food retail, online retail, healthcare and pharmaceuticals customers. However, demand from our property and finance & professional services clients remained weak, although the second quarter was somewhat better than the first quarter as office space reopened.”
• Manchester’s Nightingale hospital already taking patients.
• Sweden has introduced an eight-person-per-table limit in pubs, bars and restaurants, as well as advising people to avoid public transport and nonessential shopping in several regions.
• Lithuania’s government has declared a three-week lockdown starting on 7 November.
• Seven US states report record hospitalisations. Missouri, Oklahoma, Iowa, Indiana, Nebraska, North Dakota and New Mexico all reported record high hospitalisations this week.
• The recovery in China’s service sector activity extended into a sixth straight month in October. The Caixin/Markit services purchasing managers’ index (PMI), a gauge of sentiment among smaller, private firms, rose to 56.8 in October from 54.8 in September. The reading was higher than the median prediction of 55.0 expected by analysts.
• Hungary will close bars and entertainment venues and impose a night-time curfew as of midnight.
• Switzerland’s government will deploy up to 2,500 military personnel to help the country’s healthcare system.
*corporate client of Peel Hunt