Coronavirus - Building a different future

France and Belgium are investing in cycle lanes and offering subsidies to repair bikes.

This is mainly to limit the use of cars as restrictions end and people avoid the crowds associated with public transport. Over the next few week governments will begin rolling out strategies for lifting the lockdown. With construction likely to be one of the first to return to work, it will be interesting to see if any governments use this moment to accelerate changes to better positon their economies for the future. Full fibre installations, rail network capacity and roadside car charging could be addressed more efficiently in the current environment.


• EU economy shrinks by 3.5%.

• Global carbon emissions to drop 8% in 2020.

• US unemployment hits 30m.

• CMA threatens legal action over holiday refunds.

Company news

Buildings & Construction

 Bellway – “Actions to date – In addition to prioritising health and safety, the Board has taken several other actions in order to ensure the continued long-term resilience of the Group. These include: • Postponing the decision in relation to the payment of the interim dividend until a time when there is more certainty with regards to the future economic outlook;

• Deferring all discretionary land expenditure;

• Introducing a moratorium on all new recruitment activity;

• Supporting customers, where appropriate and for properties where the construction process has concluded, to legally complete the purchase of their new home; and

• Responding to all customer care queries via telephone or email, whilst at the same time suspending all but essential home visits.

Furthermore, in recognition of the disruption that Covid-19 is having on communities across the country, the Board of Directors has volunteered a temporary 20% reduction in basic salary and fees, effective from 1 April until 31 May 2020. This will be donated to various charities and Bellway will also match-fund the donations with a contribution to its national charity partner, Cancer Research UK.

The purpose of this overall approach is to conserve cash and protect liquidity, maintain high standards of service for our customers, insofar as is operationally possible, and safeguard the long-term inherent potential within the business.

A responsible approach to site openings – The construction industry is a significant contributor to the UK economy and as such, the Government has issued guidance stating that sites should continue to operate where they comply with the Construction Leadership Council's Site Operating Procedures and Public Health England guidance.

Over recent weeks, Bellway has been reviewing these procedures in order to establish a safe method of working for its site operatives. As a result, we have developed measures to ensure social distancing and have produced strict guidelines for workers on our sites. Working collaboratively with our supply chain, this will enable us to resume some construction work, initially on a phased basis, from Monday 4 May 2020.

The wellbeing of our employees, customers, subcontract workforce and the general public remains our priority. In order to help meet the expectations of those customers who were expecting to move into their new home over recent weeks, we are concentrating our efforts on those properties that are in the latter stages of construction. We will only be undertaking tasks that can be performed by our employees and subcontractors working in a safe and responsible manner, whilst adhering to strict social distancing measures.

We remain committed to providing the highest levels of customer care possible during the current situation and all customer care calls and emails will continue to be responded to as normal during this period. All but essential maintenance work in customers' homes, however, remains suspended. Our sales centres and show homes will remain closed, although we will continue to offer a telephone sales service across all our developments.

Supporting our colleagues – Following our initial decision to close sites, the Group initiated measures to furlough approximately 75% of employees, with this principally comprising directly employed site tradesmen, site managers and sales advisers. As a responsible and supportive employer, Bellway has committed to paying these employees full basic salary throughout April and May.

The Group is eligible to claim a grant for furloughed employees using the Government's Coronavirus Job Retention Scheme ("CJRS"), however, the decision to submit a claim has been deferred until the Group is in a better position to assess the financial effect of its planned site reopening programme.

In addition to supporting colleagues with full basic pay, we have introduced several support initiatives, including suggestions to encourage good mental and physical health, throughout this period of uncertainty.

Trading update – In the period from 1 August 2019 to 26 April 2020, the Group completed the sale of 6,506 homes (28 April 2019 – 6,596 homes), including 493 which completed on or after 23 March 2020. Our order book remains substantial, with a value of £1,567 million at 26 April 2020 (28 April 2019 – £1,655 million) and comprises 5,976 plots (28 April 2019 – 6,334 plots).

Whilst our sales centres have been closed since 23 March, we have continued to achieve a modest number of weekly reservations via telephone. We do, however, expect sales activity to remain severely restrained until we can re-open sales outlets. The cancellation rate, measured as a percentage of the reduced reservation rate over the same period, was 27%.

The initial recommencement of construction works will enable Bellway to target the sales completion of a limited number of new homes over the coming weeks, although the extent to which this is achieved will depend upon customers' ability to complete and the ability of the supply chain to safely support the industry.

Funding and liquidity – As previously reported, the Group has committed bank facilities of £545 million. Since 23 March, Bellway has extended the maturity dates of tranches totalling £125 million, which were otherwise due to expire in this financial year, to July 2021. These extensions will help to ensure the ongoing liquidity of the Group and evidence the good, long-term relationships that Bellway has with each of its UK based banking partners. The commercial terms remain in line with those included within the overall facility.

In addition, Bellway has been confirmed as an eligible issuer for the Covid Corporate Financing Facility ("CCFF") with an issuer limit of £300 million. This source of funding is currently undrawn but remains in place as a prudent back-up should there be a continued and prolonged period of economic inactivity. Together with the Group's committed banking facilities, this provides Bellway with access to funds of £845 million.

In this context, the Group had net bank debt of £98 million2 at 26 April 2020 (28 April 2019 – £229 million), which is stated after making the payment of substantially all liabilities in relation to goods and services supplied in February. Whilst actively managing cash flows is a priority, Bellway continues to treat its suppliers and subcontractors fairly, thereby engendering long-term support and loyalty. The Group therefore remains committed to paying outstanding amounts as they fall due and in accordance with our normal payment terms. The amount outstanding in respect of works undertaken in March, prior to site closures, is around £155 million, with the majority of this expected to be paid by the end of April.

Committed land obligations for the remainder of the financial year are expected to remain modest, at around £60 million, and fixed monthly cash running costs are around £15 million per month, assuming that the Group does not recover any costs through the CJRS. Bellway therefore has ample headroom to continue to meet its liabilities as they fall due for the foreseeable future.”

 Countrywide – “As noted in the update provided on 11 March 2020, the Group saw a positive start through the end of February in agreed sales and that continued through March, with the pipeline of agreed sales 9% ahead year-on-year through the first 12 weeks of the year. The pipeline through the lockdown period has remained resilient at approximately £50 million and remains ahead year-on-year.

We have taken swift and decisive measures to reduce operating costs and capital expenditure. The actions taken include:

• Costs of the Board and leadership team: The Chairman and non-executive directors volunteered to take a 33% reduction in salary, with effect from 1 March 2020, and the Group's executive team and leadership team agreed to take a 20% reduction in salary from 1 April 2020. These reductions will be for the duration of the period during which the Group is participating in the Coronavirus Job Retention Scheme;

• Costs of our people: the Group has 78% of its people on furlough under the Government's Coronavirus Job Retention Scheme. All non-furloughed staff earning above £45,000 also took a 20% reduction in salary;

• Discretionary spend: materially reducing our discretionary spend, including our marketing spend, to reflect the current environment;

• Capital expenditure: curtailing all capital expenditure, including suspension of transformation of our IT estate;

• Tax deferral: using the Time to Pay provisions that allow the deferral of VAT, PAYE and NI, the Group agreed the deferral of taxes due for March 2020 to June 2020 to the end of the tax year;

• Business rates: benefitting from the business rates 100% retail discount scheme, extended for estate and lettings agents for 2020;

• Working capital: in line with many others in the property services industry, we are moving mostly to monthly rent payments, and carefully balancing our payment obligations between smaller and larger suppliers to manage the working capital cycle. The majority of our landlords have been supportive of the change to monthly payments.

Financial position and liquidity – The Group meets its working capital and funding requirements through a Revolving Credit Facility of £125 million that matures in September 2022. The Group benefits from a supportive lender group of six lenders ("Lenders") most of whom have provided borrowing facilities since March 2013. In April 2020, the Lenders agreed to provide an additional £20 million facility for an 18-month period, with £10 million available from 1 May 2020 and £10 million available from April 2021. In view of the uncertainty arising as a result of Covid-19, the Lenders also agreed to waive the Group's debt covenants for the March 2020 covenant tests and to amend the covenants going forward in the short-term to be based on liquidity.

As at 29 April 2020, the Group has available cash resources of approximately £30 million and from 1 May 2020, the available liquidity will be £40 million.

The Group has run a series of stress tests and, whilst it is impossible to assess the impact of Covid-19 on the UK housing market, the method we have used to stress test the liquidity of the Group is to factor in known revenue and cash streams that continue to flow during Covid-19, aligned with the mitigating actions on cost and cash flow referred to above.

On the income side, we modelled a 73% reduction in income in Q2, before overlaying: the benefit of the existing pipeline in March 2020 of agreed estate agency sales; written mortgages; the active conveyancing pipeline; conservative assumptions on the collections of March receivables in Lambert Smith Hampton; the benefits of recurring income and cash flow from the lettings business of managed properties and the continuing benefits we are seeing from the delivery of desktop based valuations in our surveying business.

On the cost side, we have factored in a reduced run rate of costs and cash flows actions for the duration of the lockdown period. For the remainder of the financial year to 31 December 2020, we have looked at a number of scenarios to assess how quickly the market might return and how quickly the closing March pipeline completes and converts to cash flow, as well as scenarios for the phasing of our return and therefore the associated costs to match the customer demand.

In the event of a prolonged lockdown beyond three months, or a slower recovery, the reasonable worst case scenario also assumes the ability to further defer tax liabilities due for the period July to September 2020 into the calendar year 2021.”

 Inland Homes – “As referred to previously, the Covid-19 pandemic has impacted the Group's interim results, with five significant transactions, three of which were to major listed housebuilders, being aborted in March 2020. The total sales value of these transactions was £46.2m. Had these transactions completed as expected, the Company would have achieved the significant reduction of debt planned by management for the first 6 months of the year.

As reported on 30 March 2020 the Board acted quickly in response to the Covid-19 pandemic taking a number of immediate measures to reduce the Group's cost base and to conserve cash. These measures include:

• The Executive Directors and the Operational Board taking a voluntary salary cut of 50% per annum for the foreseeable future. In addition, the Executive Directors have deferred taking their annual bonus for the 15 month period ended 30 September 2019;

• The Non-Executive directors have taken a temporary voluntary reduction in their fees of 25% per annum;

• All staff working remotely earning more than £40,000 per annum have taken a voluntary salary reduction ranging from 9% to 40% per annum;

• Over 70 members of staff have been furloughed under the Coronavirus Job Retention Scheme;

• Temporary closure of some sites;

• Discretionary overhead expenditure reduced to minimum levels;

• No capital expenditure unless absolutely necessary; and

• Cancelling the second interim dividend of 2.25p per share, which was due to be paid on 12 June 2020, providing a cash saving of £4.6million.

The impact and extent of Covid-19 is clearly uncertain at this stage as are its ramifications on our financial results for the year ending 30 September 2020. We are assuming that all planned sales of our homes are delayed by at least two months and that the majority of our land sales will be delayed by between two and six months. This includes the major land sales that were expected to be achieved for the half year ended 31 March 2020. These delays will result in revenues, gross and operating profit in the period being impacted significantly. The Partnership Housing revenues are expected to continue in line with our expectations as work on these sites are continuing at present.

 Kingspan – “The first quarter, for the most part, reflected solid activity globally both in terms of sales and order intake. Group Sales of €1.03bn for the three-month period to 31 March were 3% behind prior year (-7% pre-acquisitions). The current lockdown did not significantly affect activity for most of the first quarter although the landscape changed markedly from the middle of March onward.

By market during the first quarter, the UK saw a pickup in order intake activity and more encouraging trends generally following a tough second half in 2019. Mainland Europe was solid overall with some tentative intake improvement in Germany from the weakness seen through much of last year. The Americas had a good first quarter overall with Australasia and the Middle East both trending more positively on order intake.”

 SIG# – “On 30 March 2020 the Group announced the temporary closure of the majority of its UK operations. This included all locations across our Distribution and Roofing businesses, except for six sites in Edinburgh, Manchester, Birmingham, Bristol, Rayleigh and London. From these sites we were able to serve critical and emergency projects for the NHS, and across the energy and food sectors in the UK.

Throughout this time, the Group remained committed to preserving the safety of its employees, customers and suppliers. Where operations continued, Government guidelines were strictly observed to ensure adherence to social distancing, cleaning and hygiene standards.

In the last week, as demand started to increase across the industry, the Group has commenced re-opening selected sites across its Distribution and Roofing businesses to provide greater support to our customers and offer increased access to our products and services. 15 sites are now open across our Distribution business and 20 sites are open across our Roofing business. The Group is currently planning for the majority of its sites to be open by mid-May.

In preparation for the lifting of UK Government restrictions, we are regularly reviewing operations and considering the measures we will require to ensure the safe return of our employees and a return to fully operational businesses across the UK.

Europe update – In France, all our sites are open and trading has gradually increased during April as French Government guidelines have encouraged more of our customers to resume trade.

We have remained open in most of our other countries of operation and trading has continued on a near-to-normal basis in Germany, Holland and Poland, all within local government guidelines in each country.

In Ireland we have followed strict Government instructions and remain closed, except for a small number of sites supporting critical and emergency projects. As in the UK, we are currently planning for the majority of Irish sites to be open by mid-May.

Cost saving measures – SIG has taken decisive actions to manage its operating cost base. With the temporary closure of operations in the UK and Ireland, the Group has accessed the UK Government's Coronavirus Job Retention Scheme and furloughed approximately 2,000 employees across its sites and support functions.

It was announced on 30 March 2020 that, as a temporary measure from 1 April 2020, the Board of Directors would take a pay reduction of 50% and the Group Executive Leadership Team a pay reduction of 20%. Additionally, the majority of our UK and Ireland employees are currently temporarily taking lower pay until the UK and Irish businesses reopen.

The Group also took definitive action to eliminate discretionary spend, whilst ensuring the business adapted to new, flexible ways of working with increased remote technology measures implemented to facilitate communication with employees, customers and suppliers.

Liquidity – As a result of strengthened cash control measures, the Group has been able to preserve its liquidity position and, at the close of business on Friday 24 April 2020, it held cash of £142m. The Group remains in dialogue with its lending group in order to release additional liquidity as required.

In addition, SIG is making use of tax relief, as well as accessing other available government measures.”


 International Personal Finance – “The Group's trading performance in the first ten weeks of 2020 was in-line with our budget. Good operational performances were delivered by our European home credit and IPF Digital's established businesses, and we saw further improvements in our Mexico collections performance as we prioritised credit quality over growth. Both credit issued and collections were delivered in line with our financial plan until mid-March.

This good start to the year was, and continues to be, impacted by the rapidly changing environment caused by Covid-19. We immediately took significant steps to protect our teams, customers and the business. The vast majority of our employed colleagues (including our call centre teams) are now working remotely, and protective equipment and personal health and safety guidance has been provided to all of our operational teams. Towards the end of the quarter and into April, collections performance in our European home credit businesses were increasingly affected as tighter restrictions were imposed on freedom of movement of individuals and debt moratoria were introduced.

For the quarter as a whole, Group credit issued contracted by 15% year-on-year, largely attributable to the significant tightening of credit settings implemented across the Group in March. These tighter credit settings continue to be in place with lending now focused on our loyal customers who have strong credit quality characteristics. As a result, we expect to limit credit issued in April to around 30% of our original budget. Collections were at 95% of budget for Q1 as a whole and 87% in March as Covid-19 restrictions were implemented across Europe. Our estimate for April collections effectiveness is 76% given the swift implementation of alternative collection strategies and enabling our agents to resume home service in most European markets. Collections effectiveness is expected to be at a similar level in May with improvements anticipated thereafter.

Customers remain the priority for us through this crisis and we have implemented a comprehensive range of measures to support our retail and business customers. Across mortgages, personal and business loans, credit cards and motor financing, we have already approved 880,000 payment holidays, bringing relief at a time of financial uncertainty for so many.

For retail customers these include payment holidays on mortgages, loans, cards and motor, access to a £500 interest free overdraft, no fees for missed payments and access to fixed term accounts without charge. We have also launched a new dedicated phone line for elderly customers and developed a new process to allow a trusted person limited access to an account for customers who can't get to one of our branches and don't bank digitally, while we have also ensured that NHS staff calls are answered as a priority.

We have announced significant support for our small business and commercial customers. Small businesses and Corporates with less than £100 million annual turnover can benefit from our £2 billion Covid-19 fund which includes fee free lending for new overdrafts or overdraft limit increases and new or increased invoice discounting and finance facilities and in certain circumstances, capital repayment holidays. In addition we fully support the comprehensive range of support schemes introduced by the UK Government including the Coronavirus Business Interruption Loan Schemes and the Covid Corporate Funding facility.

We will continue to work closely with Government and our regulators throughout the current period of uncertainty to enable personal and business customers get the support they need. Providing that support under the Government schemes does mean we have extended our lending risk appetite in this area during the crisis, and despite the protection offered by Government guarantees, there will inevitably be some additional losses in due course.”

 Jarvis Securities – “Further to the announcement of 14 April 2020, in which the Company set out a more detailed update of its operations in light of Covid 19, the Company is pleased to confirm that due to the volatile equity markets the Company has continued to experience higher trade volumes than originally forecast. Additional income from the higher trade volumes is also in excess of additional marginal trading costs. Whilst other income streams and costs remain in line with forecasts.

Accordingly, the Board of Jarvis is pleased to announce that the Company is trading ahead of market expectations for the current financial year.”

 Lloyds Banking Group – “Statutory profit before tax for the three months ended 31 March 2020 was £74 million, 95 per cent lower than in the first quarter of 2019, impacted by a significantly increased impairment charge. The increased impairment charge was significantly due to changes to the Group's

IFRS 9 assumptions, given the expected deterioration in the UK economy as a result of the coronavirus pandemic. The Group's statutory return on tangible equity was 5.0 per cent.

In this challenging external environment the trading surplus for the period was solid at £1,988 million, a reduction of 19 per cent compared to the first three months of 2019, but an increase of 7 per cent on the final quarter of 2019 (decrease of 4 per cent excluding the bank levy). The year on year decrease was driven by a reduction in net income that was partially offset by lower total costs. Underlying profit was £558 million compared to £2,168 million in the first three months of 2019, impacted by the higher impairment charges in 2020. The Group's underlying return on tangible equity was 4.7 per cent.

Tangible net assets per share at 57.4 pence increased by 6.6 pence in the first three months of 2020, largely driven by an increase in the pension asset as credit spreads widened significantly in the quarter.”

 St James Place – “The speed of change to all our lives in March was incredible, with people and businesses having very little time to react and adapt to the new conditions. St. James's Place and its global outsource providers have demonstrated operational agility made possible by a strong 'can-do' culture throughout the business. We have been able to leverage our consistent investment in technology, making full use, for example, of Bluedoor to process business electronically and enable enhanced self-serve capability to Partner practices. We have also increased the pace of our digital communications, hosting regular adviser and employee-focused webinars and making extensive use of video conferencing facilities. Processes have been streamlined and simplified, all while maintaining safety, in order to facilitate remote working. As soon as the nationwide lockdown came into force, almost our entire employee base was able to continue its role effectively whilst working remotely. Our few remaining UK office-based staff are able to exercise social distancing.

Given the circumstances, we are exercising further discipline around the pace of business investment through the delay, deferral or cancellation of discretionary expenditure wherever possible.

Considering the environment in which we are operating, we consider it helpful for shareholders that we provide additional updates to the market on new business activity for each of April and May, with these announcements intended to be made on 27 May and 23 June 2020 respectively, ahead of our reporting half-year new business and financial results on 28 July 2020 as planned.

Our business is resilient, but we are not immune to how the unprecedented level of uncertainty may affect the operating environment for the business and our clients for the foreseeable future. It is therefore imperative that we have the ability and flexibility to continue providing clients with the quality of service they need through the Partnership in scenarios that have the potential to become significantly more challenging.

For this reason, and acknowledging the heightened regulatory sensitivity at this time, the Board has made a decision to withhold 11.22 pence per share, or around one-third of the proposed 2019 final dividend, until such a time when the financial and economic impacts of Covid-19 become clearer. This prudent judgement will ensure we are able to deal with such scenarios and protect clients, the long-term value of the business, and our proven ability to benefit from the growth opportunity that will undoubtedly emerge on the other side of this crisis.

In order to give effect to this withholding, the Board is therefore declaring a second 2019 interim dividend of 20.0 pence per share, equivalent to around two-thirds of the previously proposed final dividend, and withdrawing its recommendation to pay a final dividend. The second 2019 interim dividend will be paid on 27 May 2020 to shareholders on the register at the close of business on 11 May 2020. As a consequence of the above, the Board intends that Resolution 2 will not be put to the Annual General Meeting. A Dividend Reinvestment Plan (DRIP) continues to be available for shareholders, with all such elections to be made by 13 May 2020.

In addition, the Board confirms that it will be making one dividend decision relating to the 2020 financial year and this will be made in February 2021 at the time of our full year results.”

Food, Drinks & Household

 British American Tobacco – “Most of our factories are open and are currently operating at full capacity, and we have built up an average stock of around 2 months of finished goods, with further stock throughout our wholesale and retail footprint.

We are a very geographically diverse company and including the US around 75% of our global revenue is in developed markets where distribution and availability is largely unchanged.

In a small number of markets where mandated by governments, our Combustibles manufacturing facilities have faced some limited periods of shutdown.

To date, we have seen limited impact on consumer demand, pricing or consumers' ability to access products. Sales in global travel retail have been significantly impacted, although this represents less than 1% of our sales. Government restriction of the sale of cigarettes has only been seen in a few countries.

In New Categories, having reported some supply chain disruption at the retail level during our Preliminary results in February, we are pleased that:

• Our supply chain for New Categories is now operating back at full capacity, and we are starting to build contingency stocks

• Traffic to our websites is up significantly and internet sales have more than doubled as government social-distancing measures have reduced our ability to engage with consumers at the point of sale

• We continue to launch new innovations – like Glo Hyper & capsule consumables- albeit with an adapted launch model reacting to the current environment

• Glo capsules are now around a quarter of the product mix in Japan

Looking Forward – The impact from Covid-19 is difficult to predict. We are anticipating a reduction in trade and consumer stocks and some effect on industry volume and revenue growth in Q2. This, together with some delayed launches in New Categories, means we expect results to be weighted to the second half. Being prudent, we now expect the building blocks of high single figure adjusted constant currency EPS growth in FY 2020 to include:

• Constant currency adjusted revenue growth around the low end of the 3-5% range. Including expectations for global industry cigarette and THP volume decline to around c.5% (previously c.4%), while we maintain our forecast for US industry decline at around c.5%

• Continued progress towards our 2023/24 ambition of £5bn in revenue in New Categories

This will be delivered in partnership with:

• Good improvement in adjusted operating margin

• Strong operating cash flow conversion in excess of 90% of adjusted profit from operations

• Continued deleveraging of the balance sheet

• Further strengthening of our liquidity position by recent successful US Dollar and Euro bond issuances and an undrawn £6bn RCF with no financial covenants

• A dividend pay-out ratio of 65% of adjusted diluted EPS and growth in sterling terms.”

 IG Design – “The Group finished the financial year with revenues approximately 10% up year on year, including four weeks of trading from CSS Industries Inc. ('CSS'), following the completion of the acquisition on 3 March 2020. The Directors believe the revenues of the Group for the financial year ended 30 March 2020 were impacted by at least £7 million as a result of Covid-19.

As at 31 March 2020 the Group had net cash of £42 million supported by effective cash management during March and good cash generation from CSS since acquisition. The Group expects to report average leverage for FY 2020 below 1x Adjusted EBITDA. The Company's banking facilities remain in excess of £220 million.

The Group expects to report a significant increase in exceptional costs in the year ended 31 March 2020. This is as a result of the impact of Covid-19 (primarily in relation to year-end inventory and account receivable provisions), alongside the CSS acquisition related costs, and the previously announced integration, restructuring and related costs in our US businesses, following the acquisition of Impact in 2018.

The Company is continuing to review its final dividend payment for the financial year ended March 2020 and will provide further clarification at its full year results. The Directors are committed to the payment of dividends, however, believe that the maintenance of a strong balance sheet during this period of instability is of the upmost importance.

Operational update – Despite the various restrictions in place around the world, our businesses continue to operate with stringent employee safety protocols within each location, albeit at a reduced capacity. Our regional distribution facilities continue to take and fulfil customer orders and our manufacturing sites in the US, UK, China and Europe have now recommenced production, after a short suspension in order to implement appropriate health and safety protocols. Our office-based teams are continuing to work from home where possible. The Directors are confident that the Group is well positioned to continue to meet customer demand as it increases, once restrictions globally begin to ease.

Looking ahead to FY2021 and beyond – Looking ahead, the Group has prepared detailed operational plans by region that aim to ensure that it emerges from the Coronavirus crisis strong and positioned to return to pursuing growth opportunities. In developing these plans each business unit has taken a view on a range of outcomes for FY2021 based on the impact of Coronavirus in each region. The Company continues to work with customers to understand their expectations, importantly including confirming orders where possible for the crucial Christmas trading period.

Assessing the range of outcomes above, the Directors believe that although revenues will remain ahead of FY2020 as a result of the full year effect of the CSS acquisition, there will be a material reduction in expected Group revenue for FY2021. The Group continues to forecast operating within its current banking facilities. Assuming a return to more normal sales volumes by the end of the FY2021, the Board would expect significant year on year growth in both revenues and earnings in FY2022.”

 Kerry – “During March, the restrictions on mobility significantly impacted demand in the foodservice channel, while the retail channel experienced increased demand in places. We are working on a number of actions to minimise the cost impacts of reduced volumes, including the suspension of all non-essential and discretionary expenditure and targeted short-term cost management initiatives in impacted business areas.

Consumer demands for nutrition and wellness, trusted ingredients and sustainability have continued to increase at pace over recent months. Consumers' purchasing and consumption behaviours have been significantly disrupted, leading to new challenges and opportunities across the marketplace. These consumer-driven changes are affecting the end-to-end supply chain, as retailers and customers seek to adapt quickly to address these evolving needs. Kerry's industry-leading taste and nutrition technology portfolio, co-creation model and solutions capability continue to enable customers to react at speed through this period of volatility.

Group reported revenue increased by 3.4% in the period, reflecting business volume growth of 0.2%, a pricing increase of 0.5% primarily due to higher raw material prices in the Consumer Foods division, a transaction currency impact of 0.1%, contribution from business acquisitions of 1.3% and a favourable translation currency impact of 1.3%. Group trading margin was maintained, with Taste & Nutrition's trading margin in line with last year and Consumer Foods trading margin expanding by 10bps.

Future Prospects – “Since we provided our FY 2020 guidance in February, the Covid-19 pandemic has escalated significantly and impacted businesses throughout the world. Due to the resulting global uncertainty in relation to the timeframe and business impact from the pandemic, we are withdrawing our full year guidance.

The Group is focussed on managing through the short term challenges to emerge as an even stronger customer partner. Our Taste & Nutrition business continues to have strong growth prospects, while navigating the short-term challenges with agility. The foodservice channel will continue to be impacted while restrictions in movement are in place. We are focussed on opportunities in more resilient areas of the foodservice channel and planning with customers on menu developments for later in the year. The retail channel continues to deliver good growth, as Kerry's co-creation model and leading solutions offering are enabling customers to react at speed through this period of volatility. We have a good innovation pipeline to drive growth once we emerge from this current unprecedented situation. Our Consumer Foods business continues to see changes in consumer purchasing behaviour during the period of restrictions, which is driving significant volatility across categories. We will continue to invest for growth and pursue M&A opportunities aligned to our strategic growth priorities.”

 Sainsbury’s – “We do not know how long Covid-19 will continue to directly impact our business and consumer behaviour or the impact that a changed economy will have on consumers over the remainder of the year. We have modelled a number of different scenarios. Our base case assumes that lockdown restrictions will have eased gradually by the end of the first quarter of our financial year (end June), but that the business continues to be disrupted until the end of the first half (mid-September). We additionally assume that consumer demand, particularly for general merchandise and clothing, will be impacted by weaker economic conditions thereafter. Key assumptions on sales include:


• High single digit percentage grocery sales growth through the lockdown period

• Low single digit percentage sales growth over the remainder of H1, reflecting a greater number of meals being eaten inside the home rather than in schools, workplaces, cafes and restaurants.

• A return to normal grocery market conditions in H2

General Merchandise

• Low teens percentage sales declines at Argos whilst in lockdown, in line with more recent trends and reflecting the closure of 573 standalone Argos stores

• Low teens percentage sales declines at Argos thereafter, reflecting anticipated subdued discretionary spending

• Continued significant double digit percentage sales declines for General Merchandise in Sainsbury's stores during lockdown and continuing through the remainder of H1, moderating to mid-single digit percentage sales declines through the remainder of the year

Clothing – Significant continued sales declines while in lockdown, moderating through the remainder of the year towards low double-digit percentage declines in H2

Fuel – Significant fuel volume declines in line with current trends until the end of lockdown, easing through Q2 – A return to normal market conditions in H2

Retail outlook – costs – Operating expenses will be materially higher than budgeted, particularly in the areas of retail and logistics labour, absence and instore costs, where we assume disruption will continue for most of the first half of our financial year. In addition, we anticipate higher stock clearance in clothing and some key seasonal areas. Finally, many of our cost saving programmes will be delayed due to the disruption.

There are limited opportunities to mitigate these impacts. We have taken the decision not to take up the government's offer of furlough payments or delaying VAT payment. We are redeploying colleagues to different roles within the business wherever possible and colleagues in central roles are supporting in stores where they are able. There will be some offset from approximately £450 million of business rates relief on shops in England, Scotland and Northern Ireland.”


 ConvaTec Group – “Q1 included the impact of customers increasing their inventories to ensure supply chain resilience and a weak prior year comparator. However, Covid-19 has introduced more uncertainty into the environment in which we operate. We expect Advanced Wound Care revenue, which is more exposed to elective procedures and hospital visits, to be adversely impacted. We are aware of external risk factors, particularly in relation to the supply chain, and we are focused on proactive mitigation.

We are maintaining our 2020 guidance of 2.0% to 3.5% constant currency revenue growth and between 16% and 18% constant currency adjusted EBIT margin, but we are cautious about the increased risks.

Dividend – Notwithstanding the uncertainty due to Covid-19, the Board continues to propose that the 2019 final dividend is paid, subject to approval at the AGM on 7th May 2020. This reflects the Board's confidence in the future performance of the Group and its underlying financial strength and cash generation.”

 Hikma Pharmaceuticals – “Hikma has made a strong start to the year despite the challenging market conditions that have arisen as a result of Covid-19. This is a complex situation which we are continually monitoring, but we have confidence in the outlook for the Group and we are pleased to reiterate our full year guidance for 2020."

Injectables – Our global Injectables business is performing well. In the US and Europe, we are seeing an increase in demand across our portfolio, driven in part by the Covid-19 outbreak. Our Injectables business in MENA is also seeing strong demand, particularly for our biosimilar products.

Hikma's Injectables product portfolio includes many of the products most in need by hospitals during the current pandemic, including anaesthetics, analgesics, sedatives, neuromuscular blocking agents and anti-infectives. Our commercial and operational teams are working closely with our customers and government agencies to ensure we are able to maintain a consistent supply of these products. We are leveraging the flexibility of our global manufacturing facilities and have been able to enhance productivity to meet the increased levels of demand.

We are pleased to announce that we have received US FDA approval for the first product from our new high containment facility in Portugal, which can now begin to supply the US market. We are on track in terms of new product launches and are making significant investments in our product pipeline.

Based on performance in the year to date, we are reiterating our guidance for global Injectables revenue growth in the low to mid-single digits for 2020, driven by demand for our broad product portfolio across all our markets and new product launches. We continue to expect core operating margin to be in the range of 35% to 37%. While we are pleased with our performance in the year to date, our guidance reflects the uncertain operating environment brought about by the Covid-19 pandemic.

Generics – Our Generics business has also had a good start to the year, building upon the strong performance of this segment in 2019. We have seen good demand across our portfolio, particularly for our nasal sprays, and a better than expected contribution from new products, including the first-to-market generic launch of everolimus tablets (a generic version of Zortress®). We have also seen some additional demand related to Covid-19.

We have made good progress in strengthening our R&D pipeline since the beginning of the year. At the end of March, we successfully invalidated six US patents as asserted by Amarin for their Vascepa® capsules and continue to work to bring this product to market. In addition, we continue to advance our nasal spray portfolio, leveraging the strong technical capabilities at our Columbus facility to progress our naloxone nasal spray submission.

For the full year, we continue to expect Generics revenue in the range of $700 million to $750 million. Our guidance assumes that we will launch generic Advair Diskus® in the second half of the year and we have included revenue of $20 million to $40 million from generic Advair Diskus® in this range. We expect our core operating margin for the Generics business to be between 16% and 18% or, including the launch of generic Advair Diskus®, around 20%.

Branded – Our Branded business is also performing well. We have seen good demand across most of our markets, and particularly in our Tier 1 markets of Egypt and Saudi Arabia as well as in Algeria, where we have seen a strong recovery reflecting a more benign market environment. In some of our markets we have also seen an increase in demand related to Covid-19.

While the pandemic has impacted our promotional activities, our teams have responded quickly to the challenges posed by distancing restrictions and have found new ways to reach health care providers across the region, including detailing doctors online and hosting virtual conferences. Some of our manufacturing facilities across the region have experienced slight disruptions but our teams have managed this well and production across our facilities is normalising.

We remain confident in the outlook for the Branded business and continue to expect revenue growth in constant currency to be in the mid-single digits for the full year in 2020.

Strong balance sheet and final dividend – Subject to approval at today's Annual General Meeting, we will be paying a final dividend of 30 cents per share (approximately 23 pence per share) bringing the total dividend for the full year to 44 cents per share (approximately 34 pence per share), an increase of 16% on 2018. In the current environment, this demonstrates the strength of our balance sheet and our confidence in our ability to maintain strong cash generation and low leverage.”

 Reckitt Benckiser – “After an encouraging start to the year we now expect our performance to be better than our original expectations. The outlook for the balance of 2020 remains uncertain, with significant Covid-19 challenges across our markets. We expect to incur higher operating costs, particularly in our supply chain, as we keep our people safe, mitigate disruptions and serve the needs of our consumers.

We continue to make progress on the implementation of our new strategy. We are investing in capacity to meet growing demand. We are also investing to capitalise on new growth opportunities as they emerge. However, we will need to adapt and rephase some of our initiatives into the second half and we'll be in a better position at mid-year to refine expectations and update our transformation plans.

Looking to the medium term, our outlook for sustained mid-single digit organic revenue growth and mid 20's margin by 2025 remains unchanged.

Strong category growth driven by exceptional conditions created by Covid-19

Net revenue £1,355m in the quarter, with LFL growth of +12.8%, comprising +13% volume and +0% price/mix; strong volume growth led by increased underlying consumption and pantry loading due to 'stay at home' conditions in key markets

Underlying performance remained strong, sustaining progress made in 2019, with broad-based growth; market share3 performance continued its positive trajectory with accelerated progress in around 60% of focus CMUs

North America LFL revenue up 20% in the quarter; Lysol exceptionally strong, up over 50%, largely reflecting an exceptional March, led by Covid-19 demand; Finish also grew, with Air Wick broadly unchanged

Europe/ANZ LFL revenue up 11% in the quarter; strong growth from Finish, Sagrotan and Napisan, reflecting good underlying growth and Covid-19 demand; solid performance from nearly all powerbrands

Developing Markets LFL revenue up 8% in the quarter; Lysol, Finish and Vanish again strong, with solid growth from Harpic, Mortein and Veja as well; strong growth in Latin America, the Middle East and South East Asia comfortably offsetting decline in India as disruption from the March lock-down impacted local supply and demand

E-commerce – Revenue from e-commerce1 activities up strongly in the quarter, led by growth from North America consumers switching to online channels, particularly in March as 'stay at home' took hold.”


 Boeing – “The Covid-19 pandemic is affecting every aspect of our business, including airline customer demand, production continuity and supply chain stability," said Boeing President and CEO David Calhoun. "Our primary focus is the health and safety of our people and communities while we take tough but necessary action to navigate this unprecedented health crisis and adapt for a changed marketplace."

As the pandemic continues to reduce airline passenger traffic, Boeing sees significant impact on the demand for new commercial airplanes and services, with airlines delaying purchases for new jets, slowing delivery schedules and deferring elective maintenance. To align the business for the new market reality, Boeing is taking several actions that include reducing commercial airplane production rates. The company also announced a leadership and organizational restructuring to streamline roles and responsibilities, and plans to reduce overall staffing levels with a voluntary layoff program and additional workforce actions as necessary.

Boeing has also taken action to manage near-term liquidity, as it has drawn on a term loan facility; reduced operating costs and discretionary spending; extended the existing pause on share repurchases and suspended dividends until further notice; reduced or deferred research and development and capital expenditures; and eliminated CEO and Chairman pay for the year. Access to additional liquidity will be critical for Boeing and the aerospace manufacturing sector to bridge to recovery, and the company is actively exploring all of the available options. Boeing believes it will be able to obtain sufficient liquidity to fund its operations.

While Covid-19 is adding unprecedented pressure to our business, we remain confident in our long term future," said Calhoun. "We continue to support our defence customers in their critical national security missions. We are progressing toward the safe return to service of the 737 MAX, and we are driving safety, quality and operational excellence into all that we do every day. Air travel has always been resilient, our portfolio of products and technology is well positioned, and we are confident we will emerge from the crisis and thrive again as a leader of our industry.”

 Evraz – “In Q1 2020, EVRAZ' consolidated crude steel output rose by 3.2% QoQ, mainly due to completion of capital repairs at EVRAZ NTMK's converter no. 2, which took place in Q4 2019.

Total steel product sales fell by 10.4% QoQ. Sales of semi-finished products dropped by 15.3% QoQ, due to higher than usual sales volumes from Russia at Q4 2019 on the back of good export market conditions.

Sales of finished products went down by 6.1%, due to seasonal decline in demand in the first quarter of the year in Russia as well as due to the sale of Palini e Bertoli in 2019. In addition, sales of finished products were impacted by lower tubular product sales volumes due to a lack of line pipe orders and deterioration of oil country tubular goods (OCTG) market demand in North America.

Total raw coking coal production decreased by 4.8% QoQ, driven by weaker demand for coal on global markets as well as lower production at Yuzhkuzbassugol's mines following the longwall move at the Uskovskaya mine. Production at Mezhegeyugol has been suspended until favourable market conditions are restored.

External sales volumes of coking coal products surged by 30.4% QoQ due to successfully completed task to maximise product shipments as well as higher sales volumes to China.

External sales of iron ore products jumped by 30.0% QoQ as most of the Q4 2019 sales volumes were delivered in Q1 2020 due to logistical limitations on shipments to China.

Sales of vanadium products fell by 9.9% QoQ, mainly due to weaker demand for FeV in Europe as a result of reduced steel utilisation rates following lower demand in the automotive industry. Lower FeV sales to Europe was partially compensated by increased FeV and oxide sales to Asia and Russia.”

 FireAngel SaftyTech – “Covid-19 will clearly have an impact on the Company outlook in the very short term, although the medium and long-term prospects are underpinned by the market need matching our compelling and unique products. This offers the possibility of a quick rebound, and the Board has taken certain mitigating actions, further details of which are set out below, which aim to balance the clear uncertainty with maintaining capability while conserving the Group's cash and protecting its profit.

The Board expects the most significant effects of Covid-19 on revenue and profitability to be in Q2 2020. This initial view will be revised in the light of events should it be required. A reasonable, albeit much reduced, level of revenue is expected to be maintained due to regulatory requirement drivers, the ongoing market need to maintain overall safety, and the different stages which each of our markets will enter as restrictions are lifted. Installation of our products is often driven by community safety groups, construction and self-employed tradesmen, who we would expect to be highly motivated to recover lost ground following the lifting of the current restrictions.

The first half of the year typically accounts for just over 40% of the Company's annual revenue. This year, for reasons previously announced, the Company's second half revenue is expected to be at a higher margin than the first half and, therefore, the timing of the Covid-19 pandemic is expected to have a more limited impact on the Company's performance than might have been the case later in the year.

The Company continues to receive orders, develop products, work with Fire & Rescue Services across the UK and other customers, and improve its gross margin potential. FireAngel alarms are safety-critical items and remain on sale where traditional retailers that sell them remain open for business. Online sales have proved to be particularly resilient with sales impacted much less than through bricks and mortar retailers. International sales have continued to perform close to budgeted levels.

Mitigating actions taken to conserve cash and protect profit – The Board's initial response to Covid-19 includes a range of measures that are expected to reduce planned expenditure this year by approximately £0.4 million. We have placed 18 employees (representing 15% of the UK workforce) on furlough for an initial period of four weeks. A thorough review of the timing of certain R&D project deliverables has enabled further limited headcount reductions. The Board has agreed to take reductions of 10% of salary for Executive Directors and 20% of fees for Non-Executive Directors for two months. All measures will be subject to continued review as the macro and trading picture become clearer.

Re-phasing of R&D is unlikely to have a material effect on future revenues. The existing, already spent, investment in Intellectual Property provides ample support for revenue and margin growth.

The Company has also implemented a further range of cash conservation measures. These include deferral of payments, such as VAT and payroll taxes, as well as arrangements with landlords and suppliers. At all times, the Company remains in close contact with its bank, HSBC, who continue to be supportive. We are reviewing with them the possibilities of securing a Coronavirus Large Business Interruption Loan as a further measure of prudence.”


 Euromoney – “On 11 March 2020, Euromoney announced an update on the impact of covid-19 on our events businesses until the end of June 2020, given governments' restrictions on travel and attending gatherings. Our assessment of the potential financial impact of covid-19 on our events businesses in the period to June 2020 has not materially changed.

As a consequence of the continued global disruption caused by covid-19 and its impact on business activity, we have now taken the decision to postpone or cancel the majority of events originally scheduled to take place from July up to and including September (Euromoney's Q4). At this stage it is not possible to determine exactly how many events will take place in Q4 and, if events are held, what the impact of covid-19-related disruption could be on attendance and sponsorship. The financial profile of the 173 events originally scheduled in Q4 2020 is revenue of approximately £34m (£6m in July, £2m in August and £26m in September). The gross profit from these events was expected to be around £18m. The larger events have approximately £7m of committed costs already incurred, and therefore the gross profit impact of running no events in Q4 would be approximately £25m.

Actions to reduce costs and sustain our strong liquidity position – Euromoney has taken swift and decisive action to reduce costs and preserve cash, while supporting employees, serving customers and protecting the long-term health of the business. We have already taken steps to minimise non-contractual spend, postpone capital expenditure, freeze pay and limit new hires. We are exploring government support schemes to further protect jobs and prioritise liquidity. We have placed some UK employees, mainly those involved in events, on temporary furlough under the UK Government's Coronavirus Job Retention Scheme and are taking advantage of similar job retention and wage support schemes in other countries. From 1 May 2020, all Directors will take a temporary 25% reduction in their salaries or fees, except for Andrew Rashbass, CEO, who will take a 40% cut.

Additionally, the Board is adopting a prudent approach to shareholder distributions and will not declare an interim dividend payment for FY20, resulting in a cash saving of approximately £12m. The Board will consider the FY20 total dividend in November 2020, when it has better visibility on the business environment.”


 Glencore – “The Covid-19 pandemic is an unprecedented challenge for all of us, including our colleagues, families, local communities and society at large. As a responsible operator, our top priority is to protect the safety and health of our people and the communities that host our businesses.

Glencore operates more than 180 sites and offices in over 35 countries. The scale and diversity of our operations means that the impact of the virus varies by location. In addition, many of our operations are located in remote areas with limited public health care systems. Our teams are working closely with governments, health agencies and others key responders to provide effective local solutions.

We have introduced a number of precautionary measures across our offices and industrial assets in response to Covid-19. This includes the implementation of enhanced hygiene and cleaning measures, application of social distancing and identification of higher risk groups. Our goal is to operate only when we can keep our people safe and healthy, while safeguarding jobs and providing support to our local communities. A near-total restriction on non-essential travel has been implemented as well as remote working, where possible.

The majority of our industrial assets continue to operate relatively normally, accounting for the various changed practices noted above. Various operations have been temporarily suspended, where national/regional lockdowns or other circumstances have dictated such.”

Oil & Gas

 Royal Dutch Shell – “As a result of Covid-19, there is significant uncertainty in the expected macroeconomic conditions with an expected negative impact on demand for oil, gas and related products. Furthermore, recent global developments and uncertainty in oil supply have caused further volatility in commodity markets. The second quarter 2020 outlook provides ranges for operational and financial metrics based on current expectations, but these are subject to change in the light of current evolving market conditions. Due to demand or regulatory requirements and/or constraints in infrastructure, Shell may need to take measures to curtail or reduce oil and/or gas production, LNG liquefaction as well as utilisation of refining and chemicals plants and similarly sales volumes could be impacted. These measures would likely have negative impacts on Shell's operational and financial metrics.

The pace and scale of the societal impact of Covid19 and the resulting deterioration in the macroeconomic and commodity price outlook is unprecedented. The duration of these impacts remains unclear with the expectation that the weaker conditions will likely extend beyond 2020. In response, Shell has taken decisive actions to reduce our spending and position our businesses to compete in the current lower commodity price environment and uncertain demand outlook. The Board of Royal Dutch Shell has taken the decision to reset its dividend to provide financial resilience and further flexibility to manage the uncertainty. Shell is taking the steps necessary to ensure that we are well-positioned for the eventual economic recovery.”

Real Estate

 Harworth Group# – “With a number of housebuilder customers announcing reduced activity on live construction sites and new purchases, the Company is prioritising its capital expenditure on those of its major development sites that have agreed sales in place for later in the year, in line with its strategy of effectively managing cash flows to fund sustainable growth. Infrastructure works are therefore continuing on six active development sites across the portfolio. The Company and our contractors are adhering strictly to all government guidelines on social distancing and safe working practices during this period.