Maitland/AMO Morning Monitor – Tuesday 16 June 2020

16th June 2020

In the news

  • The Institute of Race Relations think tank said it would be hard to have confidence in the government's inquiry into racial inequalities given that Munira Mirza, who is leading much of the work, has previously cast doubt on the existence of institutional racism
  • Ministers are facing increasing political pressure as Manchester United and England footballer Marcus Rashford pushes ahead with his plea to give 200,000 vulnerable children free school meals this summer
  • Listed retailers have been warned by the FCA that their reopening plans may include price-sensitive information that could have a “significant effect” on their share price and staff must guard against the risk of insider trading
  • Analysts say a dividend cut at BP is all but inevitable after the oil giant announced a write-down of $17.5bn (£14bn) on the value of its assets
  • Jaguar Land Rover has revealed plans aimed at saving £5bn over the coming months, which include cutting a further 1,100 agency worker jobs
  • America's top court has ruled that employers who fire workers for being gay or transgender are breaking the country's civil rights laws

Politics today

  • Backbenchers are expected to speak up about free school meal vouchers, following Marcus Rashford’s plea, during a parliamentary debate later today called by the Labour party
  • 10am - Security minister James Brokenshire appears before the Lords EU security and justice subcommittee
  • 3pm - Spectator Editor Fraser Nelson and New Statesman Editor Jason Cowley discuss the future of journalism before the Lords communications and digital committee discussing the future of journalism and Former Downing Street comms boss Robbie Gibb will follow at 4pm
  • Federal Reserve Chair Jerome Powell presents latest Monetary Policy Report to US Senate Banking Committee

Stock market moves

  • European markets finished lower on Monday with shares in London leading the region.
  • Asian markets are higher today as Chinese and Hong Kong shares show gains. The Shanghai Composite is up 1.31% whilst the Hang Seng is up 2.83%.
  • Global markets are rallying on Tuesday after the Federal Reserve launched measures meant to ease strain on markets and help businesses affected by the COVID-19 pandemic.

Corporate announcements

* Maitland Client

Ashtead Group PLC* Q4 2020 Results
  • FY rental revenue up 8% at £4,606m (£4,138m).
  • FY EBITDA up 5% at £2,376m (2019: £2,107).
  • Pre-tax profit of £1,061m; £1,091m excluding the impact of IFRS 16 (2019: £1,110m).
  • Proposed final dividend of 33.5p, making 40.65p for the full year (2019: 40.0p)
  • Record free cash flow of £792m.
  • Brendan Horgan, CEO, said: “While no one could have foreseen the global impact of COVID-19, our business model and capital structure are designed to withstand the cyclical nature of some of our end markets.  We took prompt actions to optimise cash flow, reducing capital expenditure and operating costs, and strengthen further our liquidity position.  In these unprecedented times, the results of our long-term strategy to mature our business through diversity and scale came through in our performance. Looking forward, I am certain these swift actions combined with the strength of our cash flow and balance sheet will serve the Group well”.
Cineworld Group PLC Cineworld Group cinemas to reopen in July
  • Cineworld will reopen cinemas across some territories during the last week of June, with all theatres expected to be open over the course of July.
  • Amidst the ongoing COVID-19 crisis, Cineworld’s main priority remains the health and well-being of both customers and colleagues.
  • Several operational changes have happened and the company has invested in new technology to ensure a safe but enjoyable cinematic experience for all visitors.
  • Mooky Greidinger, CEO, said: “We are thrilled to be back and encouraged by recent surveys that show that many people have missed going to the movie theatre.”
Telecom Plus PLC Final Results
  • Revenue up 8.9% to £875.8m.
  • Results in line with expectations.
  • On the assumption that social distancing restrictions continue to be progressively lifted (and are not subsequently retightened), and with a modest increase in bad debts, the company expects the profit outturn for FY21 to be marginally below the level just reported for FY20, in line with previous guidance.
  • Andrew Lindsay, CEO, said: “Our results this morning show record sales, earnings and dividends, clearly demonstrating the resilience and strength of our business model. “
Greggs PLC Update on shop re-opening plans
  • In recent weeks Greggs has successfully operated a small number of shops and tested various operational changes, including new workwear, equipment and social distancing measures, that will support the safety of its teams and customers when it opens shops at scale.
  • Greggs has been working to the following phased plan for the re-opening of its shops:
    • Early May – commence trial at a small number of shops to test new social distancing measures and operational processes.
    • Mid-June – a larger scale opening of selected shops with new procedures and equipment.
    • Early July – plan to re-open the rest of the shop estate.
  • In line with this plan Greggs intends to re-open around 800 shops to takeaway customers later this week, on Thursday 18th June.
  • Roger Whiteside, CEO, said: “We are confident of our ability to adapt to market conditions in the short term while continuing to invest in the long-term growth of our business.”
Wood Group (John) PLC Wood secures two major U.S. solar contracts
  • Wood has secured two solar engineering, procurement and construction (EPC) contracts from an American power and energy company worth over $200m.
  • Wood was selected following a competitive tender process and will be responsible for delivering two major solar projects in the U.S. state of Virginia with a combined output of 190MW.
  • The first project is a 120-megawatt solar facility in Pittsylvania County, expected to be operational in 2022.
  • The second project covers a 70-megawatt solar facility in Chesapeake and is expected to be operational in late 2021.
4imprint Group PLC Update on Current Trading
  • As the partial or full lifting of lockdown restrictions began in many US states in May and early June, weekly order counts have steadily increased and are now approaching 50% of the 2019 comparative.
  • Cash conservation was a clear focus for the Group early in the COVID-19 crisis. Action has been taken to control discretionary and capital spend.
  • The Group’s balance sheet and liquidity position remain strong. At the end of May 2020, the Group had cash balances of $28.1m, and no debt.