• BOE injects £150bn into the UK economy
• UK furlough scheme extended to March
• OSR expresses concern over the UK Government’s data use
• Indonesia’s economy contracts 3.5% YoY in Q3
• Greece goes into national lockdown
• Rolls-Royce to cut 1,400 jobs
Food, Drinks & Household
• Headlam – “The Company intends to continue operating from all its sites, providing a nationwide delivery service, collection service from its trade counter network, and ongoing customer support, while prioritising the safety and protection of its people, customers and necessary visitors to site.
All customer orders currently being processed will be fulfilled as normal and, to satisfy customer requirements in line with normal seasonal demand, the company anticipates continuing to purchase product and increase availability throughout the period.”
• Sainsburys – “We will close our meat, fish and deli counters, based on reduced customer demand. This will make stores simpler to run and reduce food waste.
Sales during the first half were stronger than the base case assumptions we outlined in April, particularly at Argos, driving a strong underlying profit increase against a soft comparative base. Retail costs of around £290m associated with protecting customers and colleagues from Covid-19 were partially offset by £230m of business rates relief.”
• Tate & Lyle – “Volume was in line with the comparative period, with revenue increasing by 1% in constant currency to £475m. Stronger demand for packaged and shelf-stable foods for consumption in-home offset reduced demand for ingredients used in food and drink consumed out-of-home (representing 15% to 25% of revenue).”
• TI Fluid Systems# – “Overall, global light vehicle production volumes trended better in Q3 2020 compared to H1 2020, with OEM production activity resuming in all regions following the Covid-19 related factory shutdowns in H1. Q3 2020 group revenue is recovering and decreased by 5.1% YoY compared to an H1 2020 revenue decrease of 30.7%. At constant currency, revenue declined 1.3% compared to a global light vehicle production decrease of 3.5%, representing an outperformance of 220 bps for the quarter.”
• Superdry – “Stores continue to be impacted by Covid-related measures suppressing footfall, particularly in large city centre locations. Like-for-like store trading in the last six weeks of H1 was -32.4%, with UK trade impacted by continued social distancing measures, partially offset by stronger performance in Europe, where footfall declines have been less severe. As at 5 November, 122 stores are now temporarily closed across England, Wales, France, Belgium and Ireland, with 117 stores still open and trading.
Ecommerce is performing well and strengthened through Q2 21, with like-forlike sales up 51.9% in the last six weeks of H1. The improvement was driven by owned site sales, which increased 68.9% YoY, coinciding with the launch of our new AW20 product and the targeted clearance of aged stock.
Wholesale faces many of the same headwinds as Stores due to Covid-19 restrictions and uncertainty. The performance in Q2 in part reflects later phasing of AW20 forward order deliveries, with 68% shipped YTD compared to 84% at the same time last year, and the deferred intake of stock due to the widespread supply chain disruption earlier in the year from Covid-19.”
• Trainline – “Significant impact on rail passenger numbers from Covid-19 lockdowns and virus containment measures across the UK and Continental Europe. H1 group net ticket sales of £358m was 19% of the equivalent prior year period and revenue of £31m was 24%.
Encouraging performance in Q2, with Trainline recovering as trading conditions improved, reflecting an accelerated shift to online and digital ticketing:
• International led the recovery, returning to growth in the top 3 domestic markets
• UK Consumer net ticket sales recovering faster than the market at 30% vs prior year period vs. industry passenger volume at 24%
• New customer rebounded strong - new app customers in UK exceeding 80% of pre-Covid levels; International surpassing pre-Covid levels.”
• Nintendo – Sales of Nintendo’s Switch console helped profits to more than triple in the half year to end of September. The trend has likely been driven by lockdown and consumers spending more time at home.
• The Bank of England will inject an extra £150bn into the UK economy. The bank highlighted that tighter coronavirus restrictions are expected to cause the economy to shrink 2% in the last three months of 2020, before bouncing back at the start of next year, but it does not expect the UK economy to recover to its pre -pandemic size until 2022. The Bank believes that unemployment will rise sharply as government support schemes wind down.
• More than 17 million mink in Denmark could be culled after a version of coronavirus was detected in farms producing fur. Five cases of the strain , which can be transmitted to humans , have been found in the country ’s mink farms, with 12 people infected.
• The Spring lockdown caused a rise in mental distress, with reports up 8% compared with the same period in previous years, the director of health protection at Public Health England says.
• In Italy the northern regions of Lombardy, Piedmont and Aosta Valley, along with Calabria in the south, have been placed in the ‘red zone ’, meaning people will only be able to leave their homes for work, health or emergency reasons , and bars, restaurants and non -essential shops – apart from hairdressers – will close. People will be banned from travelling in or out of their regions.
• Cyprus has announced a curfew on movement from 11:00pm to 5:00a m, starting today and remaining in force until 30 November.
• In Ireland the R0 umber has fallen to 0.7 -0.9 after two weeks of maximum restrictions.
• Greece has gone into a new nationwide lockdown, which will last for three weeks.
• Indonesia ’s economy contracted 3.49% YoY in the third quarter, the statistics agency said today, with tourism, construction and trade among the hardest -hit sectors. The data marked the second consecutive quarter of contraction after a 5.3% decline in April -June.
• China has barred entry to some travellers from the UK and Belgium and set strict testing requirements on visitors from the United States, France and Germany .
• UK Chancellor Rishi Sunak has announce d the furlough scheme will be extended until the end of March and confirmed it will pay 80% of salaries. The chancellor went on to say the policy will be reviewed in January to decide whether economic circumstances are improving enough to ask employers to contribute more. The new scheme means the incentive of the Job Retention bonus falls away.
The Office for Statistics Regulation (OSR) has expressed concern about the way the government is presenting coronavirus data. At the weekend, when the government announced England ’s second lockdown , it presented modelling suggesting the UK could soon see 4,000 deaths a day. However, the model was out of date, and gave the impression that the number of deaths was four times higher than it currently was.
*corporate client of Peel Hunt