Coronavirus - A lottery nobody wins

Ryanair said it will cut capacity by 20% in September and October after bookings “notably weakened” in the past 10 days.

Clearly this is due to the rolling travel restrictions the UK is now applying to countries that are seeing a rise in infections. Whilst there is a need to reduce imported infections, the instant blanket quarantine on travellers stymies a return to normal for the travel industry. The testing on return approach deployed by Germany appears to be more proactive and allows tourism to function more effectively.


• Japan’s economy shrinks 27.8% yoy in Q2.

• 100,000 sign-up to NHS Covid-19 vaccine trials.

• Local measures considered in Northern Ireland.

• Ryanair cancels one in five flights from September to October.

• New Zealand postpones its general election for a month.

Company news


 Amigo – “Amigo, the leading provider of guarantor loans in the UK, is today announcing a further extension of the securitisation facility performance trigger waiver period to 18 December 2020. This follows the announcement on 27 July 2020 extending the waiver period to 14 August 2020 and allows both Amigo and its lenders the opportunity to fully understand the impact of Covid-19 on the business, whilst maintaining the existing facility. In addition, the size of the facility has been reduced from £300m to £250m, reflecting Amigo's current lower funding requirements while lending is paused. All cash generation arising from customer loans held within the facility will continue to be used during the waiver period extension to further reduce the outstanding balance. As of the date of renewal, the facility was drawn at £199m.”

Food, Drinks & Household

 Cranswick – “Trading in the first quarter of the financial year has been strong. Revenue in the 13 weeks to 27 June 2020 was 24.8 per cent ahead of the same period last year. Excluding the contribution from acquisitions made in the prior year, revenue on a like-for-like basis was 19.2% higher.

As a result of the current shift towards greater in-home consumption, retail demand has been exceptionally robust. This, together with increased poultry sales from the new Eye facility, which continues to perform strongly and the benefit from new contract wins, have all comfortably offset lower food service revenue. This positive performance has, to date, continued during the second quarter of the financial year.”


 Carnival – “Covid-19 has had, and is expected to continue to have, a significant impact on our financial condition and operations, which impacts our ability to obtain acceptable financing to fund resulting reductions in cash from operations. The current, and uncertain future, impact of the Covid-19 outbreak, including its effect on the ability or desire of people to travel (including on cruises), is expected to continue to impact our results, operations, outlooks, plans, goals, growth, reputation, litigation, cash flows, liquidity, and stock price.

As a result of the Covid-19 outbreak, we have paused our guest cruise operations, and if we are unable to re-commence normal operations in the near-term, we may be out of compliance with a maintenance covenant in certain of our debt facilities as of May 31, 2021.”

Support Services

 Costain – “Costain’s performance has been resilient in the first half through the Covid-19 pandemic and the company has made strong progress with its strategic objectives. All contracts are now operational with the necessary safety measures in place to protect our people.

Overall, we expect to report an operating profit, before the A465 and Peterborough & Huntingdon contracts, of £5.7 million for the first half, with both our trading divisions, Transportation and Natural Resources, profitable despite the impact of Covid-19.

The outlook in our core infrastructure markets remains positive with high levels of activity across our teams to secure new contract opportunities. Over £2 billion of contracts and frameworks were confirmed and secured in the first half comprising a greater proportion of consultancy and digital integrated services, in line with our strategic focus. Our order book stood at £4.2 billion at the period end and, in addition, we now have over £1 billion of work on our frameworks. The order book includes £0.9 billion of secured revenue for 2021.”


 BATM Advanced Materials – “The Group entered the second half of 2020 with a substantially higher backlog than at the same point in the prior year following a particularly strong first half performance in the Bio-Medical division. The Networking and Cyber division, while experiencing some slowdown at the beginning of Q2 2020, returned towards normal trading from the end of May 2020 and was able to achieve an increase in revenue for the first half. With both divisions making a positive start to the second half, the Group anticipates the Bio-Medical division as well as the Networking and Cyber division to report growth for full year 2020 and total Group revenue to be ahead of market expectations with an increase of 32% over 2019 and EBITDA is expected to be significantly ahead of market expectations with an increase of 48% over 2019.

The Covid-19 pandemic has shifted the attention of public health authorities globally onto the importance of medical diagnostics, with a focus on rapid diagnosis to enable the correct course of action to be taken without delay. This accelerates a trend that, for several years, BATM has been developing solutions to address. The Bio-Medical division continues to innovate in molecular diagnostics and invest in the development of unique solutions - some of which are expected to be commercially released in H2 2020 in anticipation of a second wave of several respiratory pathogens, particularly flu and coronavirus. These development efforts will benefit the Group in the second half of the year and beyond. Additionally, it is expected that the sale of antigen and antibody Covid-19 testing kits will continue throughout 2020 and into next year, with sales to public health authorities in Europe, South America as well as Asia. The Group is also continuing to deliver on its contract to provide critical care ventilators.

The Networking and Cyber division, since late May 2020, has seen a return towards normal trading as some customers who had temporarily postponed certain projects have commenced discussions and as lockdowns are increasingly lifted. While it is still early days, this gives confidence to the management team that the full year impact of the pandemic on the Networking and Cyber division will be minimal. The Group’s recent proof-of-concept with Vodafone of its NFVTime operating system integrated with Arm technology is also a key validation of the Group's NFV offer. This solution, which can support network carriers in leveraging the benefits offered by 5G, is expected to be a significant contributor to revenue in the coming years as proof-of-concepts progress with tier 1 network operators.”


• New Zealand has postponed its general election, moving it by four weeks to 17 October. The country, which had the virus under control, is seeing a cluster of cases spread through the city of Auckland, despite a lockdown imposed last Wednesday. Nine new cases were confirmed there on Monday, bringing the total number of active cases to 58.

• Japan’s economy has seen its largest contraction in modern history. The country’s GDP shrank by 7.8% quarter on quarter, 27.8% year on year.

• South Korea is tackling a new outbreak linked to a church where some 300 infections have caused the country’s worst rise in cases in five months.

• Self-employed people can now apply for a second support grant from the government. More than three million people may be eligible for the payment of up to £6,570 each.

• Spain, which recently recorded its highest daily case figures in months, imposed tighter restrictions nationwide on Sunday.

• Germany’s health minister issued a travel warning for nearly all of Spain over the weekend. Those returning will face a coronavirus test or mandatory two-week quarantine.

• Italy, which is facing its own spike in infections, said it was closing all nightclubs for at least three weeks from Monday. Masks will also be compulsory in some areas between 18:00 and 06:00. It follows concern that the rate of infection is rising among young people.

• Thailand’s economy shrank 12.2% in the second quarter, according to the Office of National Economic and Social Development Council (NESDC).

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