Maitland/AMO Morning Monitor – 4 May 2020

4th May 2020

In the news

  • Applications for Bounce Back Loans, to help small businesses navigate the coronavirus crisis, open this morning. The scheme, which offers loans via banks of up to £50,000, is 100% guaranteed by the government
  • England’s universities will be disappointed today, as the government is expected to announce a package today to shore up their finances which will fall short of the £2bn requested. Instead £2.6bn in tuition fees will be paid early and fees can be charged even if students were unable to return to lecture theatres, so long as online teaching is maintained
  • According to the Deloitte CFO Survey Executives are braced for coronavirus to knock corporate revenues by more than a fifth this year, dashing hopes of a swift economic recovery after the end of the national lockdown

Politics today

  • No scheduled activity apart from the daily 5pm press conference

Stock market moves

  • In Europe, the Eurostoxx 600 and FTSE 100 have both opened down.
  • In Asia, stocks were largely lower this morning following fresh accusations from the US blaming China for the pandemic, with the Hang Seng dropping 3.7%.
  • Oil prices also dropped on Monday as investor’s concerns mounted over a substantial supply glut. West Texas Intermediate was down 4.7%, with Brent crude down 1.2%.
  • Sterling is marginally down to both the dollar and euro.

Corporate announcements

* Maitland Client

BAE SYSTEMS PLC Completion of acquisition
  • BAE Systems has completed the acquisition of Raytheon Technologies Corporation’s Airborne Tactical Radios business, after receiving regulatory and other customary approvals.
  • The consideration of $275m has been funded from BAE Systems’ existing cash resources.
Tate & Lyle PLC Trading Update
  • The Group states that it performed well during the year with each trading division exceeding the prior year’s performance, and believes results will be slightly ahead of guidance coming into the year.
  • 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.
  • The financial impact of lower demand was partially mitigated by prompt actions taken in March to optimise cash and reduce costs as the group saw the pandemic unfolding.
  • Nick Hampton, CEO, said: “I am delighted with our performance over the last financial year and the progress we are making executing our strategy and living our purpose. Tate & Lyle is a resilient business that meets challenges head-on. I am confident that with the strength of our portfolio, people and operating capabilities we will navigate this period successfully and that our future prospects remain strong.”
Inchcape PLC Duncan Tait appointed as Group CEO of Inchcape plc
  • Duncan Tait will join the Board as Group Chief Executive Officer with effect from 1 June 2020 and will assume his full role on 1 July following a period of handover from Stefan Bomhard.
  • Duncan was most recently on the Board of Directors at Tokyo listed company Fujitsu Ltd, the global technology services giant.
  • Nigel Stein, Chairman, said: “We are delighted to welcome Duncan to Inchcape. He is an exceptional Chief Executive and I am confident that Duncan’s style and approach will be a good fit with Inchcape’s culture and values, and his substantial technology-focused background will help the acceleration of our Ignite strategy. Duncan has worked with numerous industries and governments around the world and also brings with him experience of the automotive industry having been Fujitsu’s executive sponsor for Ford Motor Company. He was accountable for programmes with VW, Daimler and BMW, including work on autonomous vehicle and mobility projects. His almost ten-year experience of Japanese business and culture will also be valuable to our business.”
IG Group Holdings PLC New CFO Appointment
  • The group has appointed Charlie Rozes as Chief Financial Officer of the Company. This follows the announcement made on 21 January 2020 of Paul Mainwaring’s intention to retire.
  • June Felix, CEO, said: “I am thrilled that Charlie is joining the executive team of IG. He brings extensive international experience of leading and working with UK and overseas operations and has successfully driven a number of substantial growth programmes throughout his career. Charlie’s UK PLC and executive director experience will further support IG as it continues to grow its sustainable and diversified global business and in achieving its strategic growth ambitions. I would also like to thank Paul for his tremendous contribution to the Company and look forward to continuing to work with him over the next few months as we orchestrate an orderly transition of his responsibilities to Charlie.”
  • Mike McTighe, Chairman, said: “Following a rigorous process, I am delighted that Charlie is joining the Board bringing with him his extensive financial services knowledge and experience and a proven track record of leading high-performing businesses.”
Pendragon PLC Statement re Press Comment
  • The Board of Pendragon plc notes recent media coverage regarding a potential merger between the Company and Lookers plc, and confirms that it held outline discussions with Lookers suggesting they might explore the potential benefits of a combination of the two businesses and how this could be attractive to both sets of shareholders.
  • While Pendragon believed that such an exploration would have proved beneficial, these early discussions have now ceased.