Coronavirus - The end of the beginning

The list of countries lifting states of lockdown is growing as more countries see the positive impact of measures put in place to reduce the spread of the disease.

However, these first moves do not signal an end to the crisis. Most exit strategies published so far last for months, indicating that the next phase will be much longer, even assuming that there is no upsurge in outbreaks. Many businesses will face materially reduced demand and costs are likely to be higher in the second phase. The hard work for many companies is about to begin.


• EU leaders aim to raise €7.5bn for a Covid-19 vaccine.
• Japan extends state of emergency.
• Philippines bans international flights.
• Russia reports 10,000+ cases for the second day.
• London’s Nightingale hospital is to be placed on standby.

Company news 

Food, Drinks & Household

 Tate & Lyle – “While trading in March showed limited impact from the Covid-19 pandemic, the lockdowns in place in many countries across the world throughout April, most notably in our largest markets of the US and Europe, have led to some significant changes in demand patterns for our products. This statement provides an update on trading in April based on the information currently available and the actions we are taking.

Our priorities continue to be the health, safety and wellbeing of our colleagues, their families and the local communities where we operate, and to serve our customers in these difficult times. Strict hygiene and protective measures are in place across our business, we are working closely with our customers to respond quickly to their changing needs and all our manufacturing facilities have remained fully operational during the pandemic.

Trading in April 2020 – Food & Beverage Solutions and Sucralose continued to perform well with volume for Food & Beverage Solutions in line with the comparative period and Sucralose 18% higher due to phasing of customer orders. Earlier in the month, demand was strong for ingredients used in packaged and shelf-stable foods as consumers in North America and Europe filled their pantries for consumption at home. As the month progressed, this was offset by lower demand for products consumed out-of-home, such as in the food service sector in North America.

Primary Products volume was significantly impacted by the first full month of lockdown in the US. Bulk sweetener volume was 26% lower from reduced out-of-home consumption as bars, cinemas, restaurants and sporting events were either shut or cancelled. Industrial starch volume was 9% lower reflecting reduced demand for paper and packaging following the closure of schools, offices and a general decline in economic activity. Commodities were also impacted as ethanol prices decreased sharply.

The financial impact of lower demand was partially mitigated by prompt actions taken in March to optimise cash and reduce costs as we saw the pandemic unfolding. These included freezing salary increases and recruitment, stopping non-essential discretionary spend and reprioritising capital commitments.

We will provide more information when we announce our full-year results on 21 May 2020 and going forward as necessary.

Strong balance sheet – We continue to have a strong financial position and balance sheet. Our leverage is low with net debt / EBITDA of 0.9x at 31 March 2020 (0.6x on a covenant basis) and strong liquidity with access to over US$1 billion through cash on hand and a revolving credit facility. We also have significant covenant headroom on borrowings (covenant: net debt / EBITDA not greater than 3.5x) and no debt maturity until 2023.”


 Beximco Pharmaceuticals – “Day provides a business update following the outbreak of Covid-19.

Bangladesh remains under lockdown, which was implemented on 25 March 2020, as the government sought to curb the spread of Covid-19. The government ordered the closure of all businesses and imposed restrictions on the movement of people and transport, except in exceptional circumstances, such as the provision of food and medicines, so the company has been able to continue its operations.

Ensuring employee safety – Beximco Pharma's priority is to ensure the health and safety of its employees. At Beximco Pharma's manufacturing sites, the company has implemented new work practices to ensure social distancing. At Beximco Pharma's office-based facilities, employees are encouraged to work remotely where possible, with the minimum number of people attending the office. At all facilities, employees are screened upon entry and disinfectants and masks have been made available.

The company has also set up an emergency response team, available 24 hours a day, comprising of qualified doctors and healthcare professionals to respond to employee concerns and to provide medical support in the event they may be exhibiting Covid-19-related symptoms.

Manufacturing and supply chain update – The company is fully committed to ensuring the supply of its medicines, whilst abiding by government actions imposed during the pandemic. Beximco Pharma's manufacturing operations are currently unaffected. However, the company is experiencing some disruption to its international distribution network and supply chain, including some delays in transportation protocols. Although Beximco Pharma does not foresee any major shortage of raw materials in the immediate term, the company continues to work closely with its supplier networks and is reviewing alternative sources as part of contingency planning to ensure supply and distribution of finished product.

Beximco Pharma has also been working hard to urgently introduce drugs with potential benefits for Covid-19 patients. Amid global shortages of active pharmaceutical ingredients (APIs), the company has manufactured hydroxychloroquine, favipiravir and ivermectin, with remdesivir in the pipeline. These drugs have been suggested as potential promising treatment options for Covid-19 and are being used in some circumstances in a number of countries around the world.

Financial performance – Beximco Pharma continues to evaluate the impact of the pandemic on its financial and business operations. Following a strong sales performance in the first three quarters of the financial year (nine months to 31 March 2020), the fourth quarter (three months to 30 June 2020) may be impacted by Bangladesh's economic slowdown and disruption to the company's international distribution network and supply chain, directly attributable to the impact of the Covid-19 pandemic. However, for the full year to 30 June 2020, Beximco Pharma still expects to report year-on-year sales growth, but at a lower level than originally anticipated. The company will report its financial results for the third quarter as soon as possible.

Given the ongoing uncertainties around the impact of Covid-19 on Beximco Pharma beyond this quarter, the company is unable to provide the market with a longer-term view until the situation becomes clearer.”


 Carclo#– “The Board is pleased to announce that trading for the continuing businesses during the second half of FY2020 reflected a continuation of the positive momentum seen in the first half of the year. Consequently, the Board expects to report, subject to audit, underlying results for the continuing businesses for FY2020 in line with its expectations.

The Technical Plastics Division performed strongly for the year as a whole, largely driven by increased volume as the business continued to secure a number of new programmes in its core medical market. The Aerospace Division also performed well, driven by increased volumes of spares orders and customers building inventory ahead of the UK's exit from the EU.

As previously announced, the Group successfully completed the exit from the loss-making businesses of the LED Division in December 2019.

The Group's net debt (including IFRS16 leases and subject to audit) at 31 March 2020 was £25.8m, (30 September 2019: £31.7m).

Impact of Covid-19 – Whilst the initial outbreak of Covid-19 had limited impact on trading in final quarter of FY2020, disruption has been more extensive in the first quarter of the current financial year. During this period, the Group's primary focus has been to ensure the wellbeing of staff and the continued safe operation of its businesses. All applicable government advice has been followed across the different countries in which the Group operates. Pleasingly, it has been possible to keep most sites operational through the lockdown period, enabling the Group to continue to serve its customers many of whom operate in essential industries, particularly the medical diagnostic sector.

Given the division's focus on the medical market, overall demand across the Technical Plastics business has remained relatively resilient, with a number of its products being used directly in Covid-19 testing applications. Notwithstanding continued demand, the implementation of governmental guidance on social distancing and some limited shutdowns have impacted efficiency and throughput across the Group, which will inevitably have a negative impact on profitability.

Demand for the Aerospace business has been significantly impacted by the downturn in the aerospace sector.

Management has already taken action to mitigate these challenges, including accessing government support programmes where available and a reduction in variable costs where appropriate. The Board has taken a 20% cut in fees and salaries for the first quarter of the new financial year. The Group remains focused on ensuring operational continuity where it can; however, it remains very difficult to predict how the ongoing crisis will affect performance going forward.

Outlook – Given the current levels of uncertainty it is not possible for the Board to provide near-term guidance on expected financial performance. As previously reported, discussions continue with the Group's lending bank and pension trustees in order to agree a long-term financing position for Carclo. Whilst these negotiations remain ongoing, there can be no certainty that a satisfactory and affordable agreement will be reached. The Group will make further announcements as appropriate.”

 Vitec Group – “Vitec disclosed on 25 March 2020 that it was seeking to expand and amend its current financing arrangements on a short-term basis to provide it with greater flexibility. The Group is pleased to announce that it has agreed revised covenants for 2020 under its £165 million Revolving Credit Facility with its existing banking group who were unanimous in their support. In addition, the Group is eligible to issue paper under the Covid Corporate Financing Facility ("CCFF") scheme and intends issuing commercial paper initially at a value of £30 million. Together, these are expected to provide the Group with greater short-term flexibility.”

 Strix Group – “Following the strong financial performance in 2019, and having reviewed the Group's overall financial position, current prospects and balance sheet requirements, the Board reconfirms its recommendation of a final dividend of 5.1p. This will bring the full year dividend to 7.7p. The final dividend will be paid on 3 June 2020 to shareholders on the register at 11 May 2020, and the shares will trade ex-dividend from 7 May 2020. As previously communicated, it is the Board's intention to continue to increase the dividend in line with future underlying earnings, from a base of 7.7p for the 2019 financial year.”


 Hotel Chocolat – “Hotel Chocolat today confirms the successful completion of an increase to its banking facilities, in the form of a new £35m revolving credit facility ('RCF') with Lloyds Bank plc, which replaces an existing £10m overdraft facility. This follows the Group's recent equity placing, announced on 20 March 2020, from which the Group raised gross proceeds of £22 million to fund growth capital investment and to provide operational headroom.

Since the start of the UK lock-down in March, the Group has undertaken a broad range of actions to manage its costs and cash flow, whilst also adapting swiftly to new and changing circumstances, supporting colleagues, and utilising the flexibility of its multi-channel business model.

The RCF is comprised of two separate tranches; £25m expires in December 2021 and is provided by Lloyds Bank under the terms of the Government CLBILS loan guarantee scheme, and a £10m facility provided on normal commercial terms expiring at the end of December 2020. For as long as the £25m facility remains in place, the Group will be restricted from paying Dividends. The Group retains the option to cancel all or part of this RCF at any time by repaying the monies drawn. The Group has modelled a scenario with business disruption continuing throughout 2020, and these facilities are intended to provide more than sufficient liquidity in this event.

Trading Update – Easter is the second largest seasonal peak for the business. As anticipated, closing all retail stores from 23 March 2020 has had a material impact on trading. However, the Group has been able to rapidly leverage its direct-to-consumer multi-channel model to redirect demand to online, and to modify the working methods of its distribution warehouse to operate safely, with a temporarily reduced product range. Whilst not fully mitigating the total retail sales loss in the key three-week Easter period, the Group is encouraged by the agility and resilience of the business model and continues to explore further avenues for online growth whilst working safely.”

Support Services

 Hargreaves Services – “On 26 March 2020, the Board reported that trading was in line with our expectations, with no meaningful impact to date on the Group's trading activities as a result of Covid-19. Now that we have experienced a further month of trading under Covid-19, we can confirm that all business areas are continuing to trade in line with expectations with the exception of our Property business.

As a result of our contractors ceasing infrastructure work on the development site at Blindwells, near Edinburgh, due to Covid-19, the planned residential land sales to Bellway Homes and Cruden Homes, which were previously expected to complete in May 2020, will not take place in the current financial year. Until work on site is restarted, it is not possible to put any definitive timescale on this deferral.”

 Manolete Partners– “As the Covid-19 crisis develops, Manolete continues to perform well.

Case Enquiries






Year 2020






Year 2019












The table above illustrates that the number of case enquiries as the pandemic arose in March and April were in line with the levels of enquiries pre-Covid-19 and were significantly ahead of comparable 2019 enquiry levels.

The January 2020 enquiry level was particularly high reflecting the inclusion of an unusually large block of 21 cases from a single Insolvency Practitioner.

New signed cases






Year 2020






Year 2019












The table above illustrates that the number of new signed cases were in line with pre-Covid-19 numbers and were significantly ahead of the comparable 2019 statistics.

Four cases were completed in April 2020 which compares with 54 cases for the whole of the last financial year ended 31 March 2020 (8 cases completed in March 2020).

Steven Cooklin, CEO of Manolete Partners, commented: "Manolete has adapted well to the unprecedented challenges presented by the current crisis. As many have predicted, this crisis is likely to lead to widespread global economic disruption. We expect that there will be an unavoidable knock-on effect for the UK economy and we would expect that this will lead to an increase in case referrals to Manolete in the months to come. As market leader in the UK insolvency litigation financing sector, Manolete has the balance sheet to support the important work of the Turnaround Restructuring and Insolvency Professionals who are helping many companies navigate these challenges.”


 Zoo Digital – “Today provides a further update with regards to its trading for the financial year ended 31 March 2020.

The Group reiterates guidance given in its update of 23 March 2020 with revenue expected to be approximately $30m and EBITDA of not less than $2.2m. Cash collection has been much stronger than forecast and cash at the year-end was $0.7m.

Trading in the first weeks of the 2021 financial year has been encouraging and we have built a pipeline of new business. Following the temporary softening of sales experienced as customers implemented business continuity plans and halted production on new originals titles, as outlined on 23 March 2020, the Group has since experienced a reassuring resumption in demand.

This resumption is underpinned by the continued industry requirement for localisation and digital packaging, particularly in relation to back catalogues. The majority of the localisation orders to date have been for subtitling, but we are seeing increasing demand for ZOOdubs, the cloud-based platform that enables traditional dubbing services including voiceover, lip-sync and audio description. Through the use of ZOOdubs dubbing projects can continue during periods of lockdown. As a result, a number of initial trial projects from a range of clients, both existing and new, are underway.”

Lifting restrictions

• Portugal has today begun a three-phase reopening plan, starting with the reopening of small shops, hairdressers, beauty salons, car showrooms and bookstores.

• Thailand has begun easing its lockdown across certain sectors – some businesses and public parks have been allowed to re-open as well as resuming alcohol sales.

• Jordan says it has lifted all restrictions on economic activity, allowing all businesses and industries to resume production.

• In Tunisia, half of the public administration and industry sectors are returning to work, although face masks must be worn.

• Egypt is allowing hotels to reopen for domestic tourists on condition they operate at no more than 25% capacity.

• Iran has allowed the re-opening of mosques in 132 cities that have been consistently free of the coronavirus and are considered ‘low risk’. The capital Tehran, and the Shia holy city of Mashhad, are not among them. The step is part of a phased relaxation of activities that has been under way for weeks.

• Rwanda has loosened restrictions after 45 days of lockdown, even though a nationwide night-time curfew will be enforced, and movement in and out of the capital, Kigali, is prohibited.


• Japan has extended its state of emergency until the end of May after a government meeting late on Monday. The state of emergency was due to expire on Wednesday, but will now remain in place until 31 May. It gives governors the authority to ask residents to stay at home and businesses to close. There are no penalties for non-compliance, however.

• A new drug developed by UK scientists at UK bio-tech company Synairgen to treat Covid-19 patients is being trialled at University Hospital Southampton.

• The Nightingale Hospital in London is expected to be placed on standby in the coming days.

• Over the next two weeks, the US Supreme Court, America's highest court will hear arguments over the phone for the first time in its history. Audio from the proceedings will also be live-streamed.

• European leaders have pledged to raise billions of pounds to help find a vaccine and treatments for Covid-19 as part of an “international alliance” fighting the disease. An online pledging conference due to be held on Monday will aim to raise €7.5bn (£6.6bn) in funding, to support the global response to the coronavirus pandemic.

• The Philippine government has suspended international flights into the country for a week.

• British reality TV series Love Island will not broadcast a summer series this year and will instead return in 2021. More than six million viewers watched the launch of last summer's series and it is one of TV’s most popular shows for younger adults.

• The Women's Tour has been cancelled for 2020 and will be rearranged for June 2021. The cycling stage race, which has been held in Britain every year since 2014, was due to take place from 8-13 June and was initially postponed in March.

#corporate client of Peel Hunt