Coronavirus - 19 November

• Brexit talks suspended after positive test

• Tokyo raises its Covid-19 alert to the highest level
• 14% of UK businesses have low or no confidence in surviving next three months
• Lockdowns avoidable with 95% mask use, WHO Europe
• NHS waiting list in Wales to take “years” to clear



Company news

• Headlam – “Revenue for the four months to 31 October 2020 was down only 1.2% on the same period in the prior year, with November 2020 currently ahead of last year despite the lockdown in England and other restrictions in the rest of the UK. An exceptional UK residential sector performance has compensated for a significantly weaker commercial sector across both the UK and Continental Europe, albeit there has been an improving trend across the commercial sector. On a like-for-like basis, UK residential sector revenue was up 10.5% in the four months to 31 October 2020.”

Kingfisher – “Total sales +21.5% (LFL +19.9%). B&Q sales +23.9%. LFL +24.0% reflecting strong demand in all categories, in particular outdoor. LFL sales of weather-related categories were up 45.2%. LFL sales of non-weather-related categories, including showroom, were up 18.5%. The new kitchen range continues to perform well, and installation services will be reintroduced into all UK stores by January 2021.

Screwfix sales +17.4%. LFL +12.8% reflecting stronger demand from trade customers. The business continued to strengthen its overall customer proposition, including ongoing investments in price. During Q3, 17 new outlets were successfully opened in the UK and four in the Republic of Ireland.”



Industrials

• Johnson Matthey – “Activity in autos and other key markets has improved since the beginning of the Covid-19 pandemic and we expect a materially stronger second half in comparison to the first half of this year. However, the path of recovery remains uncertain and we are not providing quantitative guidance for the group overall for the year ending 31 March 2021.”

• Mitie – “Many clients will experience a slow return to office occupation, with occupancy levels expected to remain depressed for the duration of this financial year as customers implement social distancing measures and their employees and/or customers limit the use of public transport. Aviation and transport will also have a slow recovery as confidence takes time to rebuild and for all sectors, financial pressure will limit discretionary spend. Mitie's customers are likely to seek more advanced specialised work to support their buildings as and when they re-open. Public sector spend is expected to remain resilient whilst Covid-19 persists, and Mitie will continue to develop opportunities in this sector.

Our expectation is that our variable and project work will continue to be supressed as partial or full lockdown continues. However, we expect a recovery as the country moves out of Covid-19 depending upon the state of the economy and financial strength of clients and, as we have seen in the first half of this year, Mitie will continue to win new business – particularly in the public sector.

We are anticipating a longer-term structural shift as companies move to agile working and reduce their office estates. However, it is our expectation that spend per occupied building on facilities management will increase in cleaning, remote monitoring and waste and energy optimisation as companies look to lower 'total cost of ownership' of a building.”

• Royal Mail – “In the second half, if customer behaviours remain similar to our current experience, we project continued strong growth, with revenues up 30%.

Domestic parcel revenue growth is expected to be 35% in the second half, a result of the second national lockdown, and potential subsequent localised lockdowns, but with significant uncertainty in respect to customer behaviours in Q4.

International parcels revenue growth is expected to drop to 7% in H2, with full year growth of 14%, predominantly driven by the expected impact that Brexit will have on our export parcel market in the final quarter.

A 1% change from our current projection would impact parcel revenues in the remainder of the year by c.£20 million.”

• Jet2 – “At this stage, we anticipate winter 20/21 seat capacity will be approximately 50% less than winter 19/20. And, with travel advice remaining uncertain, we expect forward bookings to continue to display a pronounced shorter lead time than in previous years.”



Other

• NHS Wales’ chief executive Andrew Goodall has said it will take “a number of years” for NHS waiting times in Wales to recover to pre-coronavirus levels. The number of people waiting more than 36 weeks for planned hospital treatments is at least five times higher than at the start of 2020.

• Between March and July, 1,033 people in England were withdrawn from apprenticeship programmes because they were made redundant. This compares to 615 for the same period in 2019, according to Education and Skills Funding Agency (ESFA) data.

• AstraZeneca and Oxford University’s potential Covid-19 vaccine produced a strong immune response in older adults, data published on Thursday showed, with researchers expecting to release late-stage trial results by Christmas.

• Researchers at the Centre for London think tank and King’s College London found there was a 170% increase in the number of people in London claiming unemployment-related benefits, compared with the same period in 2019, equal to about 300,000 new claims. The average for the country was 120%.

• Fresh lockdowns in Europe are avoidable through near-universal mask wearing, according to the head of the World Health Organization (WHO) Europe office Hans Kluge.

• 14% of UK businesses said they had low or no confidence that their business would survive the next three months. The hospitality sector is hardest hit, with 34% saying they had low or no confidence t their business would survive the next three months. Trade body UK Hospitality said the sector had lost 660,000 jobs so far this year.