UK sandwich and ready meal maker Greencore scraps dividend
Judith Evans reports:
Greencore, the UK’s largest sandwich maker, has scrapped its interim dividend, cut management pay and will furlough employees in its “food to go” operation after consumers on lockdown stopped buying takeaway lunches.
The company, which also makes other convenience foods such as ready meals, said: “There has been a marked reduction in demand for the group’s food to go categories in grocery retail, which has been partly offset by the sustained volume growth in the group’s other convenience categories.”
Some employees in its food to go division will be furloughed using a government scheme which pays out 80 per cent of wage costs. Greencore’s board and executive directors will take a 30 per cent cut to their base salary and fees for three months, while other members of its leadership team will take a 20 per cent cut for the same period.
The company has also suspended its financial guidance, deferred a “substantial portion of previously planned capital expenditure” and arranged a new $75m debt facility in addition to its existing £265m of cash and undrawn bank debt. Its shares dropped 7.3 per cent to £1.58 in early trading.
De Beers cancels third 'sight' event in Botswana
Henry Sanderson in London
De Beers has cancelled its diamond sales event in Botswana this week due to coronavirus-imposed travel restrictions that has grounded clients and prevented them from shipping goods.
The diamond supply chain has been hard hit by coronavirus due to its international reach. The world’s largest diamond polishing and cutting centre in Surat in India has been in lockdown, while Antwerp's diamond-buying facilities have closed.
De Beers, a unit of Anglo-American, sells most of its diamonds at 10 “sights” a year in Botswana’s capital of Gaborone to a pre-approved group of buyers known as Sightholders. The third sight was set to start on March 30.
The group, which has an online auction platform, said it would allow Sightholders to defer their allocations of diamonds to later in the year.
UK health minister says return to normal will 'take some time'
George Parker reports:
Helen Whately, health minister, said we "know this will take some time before life returns to normal" but declined to speculate on whether the social distancing measures in place across Britain would be in place for at least three months.
"There will be a review in two or three weeks time to see the effects this is having," she told the BBC's Today programme. "It's all about flattening the peak of the virus." Deputy chief medical officer Jenny Harries said on Sunday some restrictions could be in place for six months.
Ms Whately said the NHS now had "the capacity" to carry out 10,000 daily tests for Covid-19 but that 7,000 tests a day were conducted over the weekend. The aim was to reach 25,000 a day in "the next three weeks".
She declined to say when she expected millions of tests for antibodies - to establish if a person had been infected - to arrive.
Ms Whately said both Matt Hancock, health secretary, and Boris Johnson, prime minister, were continuing to work from home in spite of having contracted the virus.
Meanwhile Prof Neil Ferguson of Imperial College, whose work has informed the government's response to Covid-19, said there were some encouraging signs that draconian social distancing measures in Britain were starting to slow the spread of the disease.
"In the UK we can see some early signs of slowing in some indicators," the epidemiologist said. Prof Ferguson said that the number of deaths was a lagging indicator, but there were signs that the rate of increase in hospital admissions was starting to slow.
ABN Amro predicts first-quarter loss on rising default rates
Nicholas Megaw in London
Dutch lender ABN Amro has become one of the first major banks to confirm that it expects to report a loss for the first quarter as loan default rates soar.
The state-owned bank last week reported a $200m (€181m) hit thanks to problems at a single client in its clearing division. On Monday, however, it added that a broader increase in loan losses would push it to a loss for the first three months of the year, compared with a net profit of €478m in the first quarter of 2019.
It said the long-term impact of the pandemic on the Dutch economy and the quality of its loan performance remained “uncertain”, but predicted default rates would be “materially higher’ than previously expected.
ABN's loanbook has been under particular pressure due to its significant exposure to companies in the oil and gas industry, which has been doubly hit by a coronavirus-induced drop in global consumption and a price war between Saudi Arabia and Russia.
The bank confirmed it would respond to recent recommendations from the European Central Bank to freeze dividend payments until at least October 1 in an effort to conserve capital.
ABN stressed that it has “a strong capital position and a significant buffer above its minimum capital requirements”.
Oil price slide hits European stocks
European stocks slid along with their counterparts across Asia, as oil prices hit their lowest level in nearly two decades.
Europe's benchmark Stoxx 600 index opened 0.8 per cent lower while London's FTSE 100 slid 1.3 per cent. In Germany the Dax was down 0.4 per cent.
Oil prices have plummeted by about two-thirds this year, with a price war between Saudi Arabia and Russia compounding the impact of the pandemic. Brent crude, the international marker, fell 6.6 per cent to $23.30 a barrel.
Smiths Group to make 10,000 ventilators for UK government
by Michael Pooler
The engineering conglomerate Smiths Group is to make 10,000 medical ventilators for the UK government, as British industry steps up efforts to plug a shortage of the devices in the fight against the coronavirus.
The FTSE 100 group said it would rapidly boost production of the machines from hundreds to thousands a month, expanding its supply chain capacity with help from a number of big-name manufacturers.
It follows work by an industrial consortium including Rolls-Royce, Airbus, McLaren, Thales, BAE Systems and Ford that formed in response to prime minister Boris Johnson’s calls for British engineering companies to meet rising demand for the life-saving equipment.
Named Ventilator Challenge UK, the consortium is pursuing the increased output of two ventilators already manufactured domestically - the Smiths machine and another model made in Oxfordshire by Penlon. It has received formal orders in excess of 10,000 units.
The Smiths contract consists of 5,000 firm orders and the same number of ventilators on reservation.
Last week Dyson revealed it had separately received a government order to make 10,000 ventilators that it designed from scratch in 10 days.
UK government grants new railway contracts to Govia and First
by Jim Pickard
The UK government has ended the limbo hanging over Southeastern and Great Western railway lines by giving operators Govia and First new contracts to ensure that a skeleton train service continues on both lines for the next few years.
Ministers had been mulling decisions on both franchises with the current franchise contracts expiring on April 1. Chris Heaton-Harris, a junior rail minister, recently signalled that one of the options for Southeastern would be nationalisation by transferring control to the state’s “Operator of Last Resort”.
Another alternative would have been to run conventional franchising competitions for both lines – but time was running out to do so.
Instead the government announced at dawn on Monday that the two operators would be given “direct awards”. Firstgroup has received a three-year agreement for Great Western Railway, extendable to four years. Govia’s direct award for Southeastern will last for two years.
The entire rail industry has been upended by the coronavirus crisis, with the government stepping in last week to cover the shortfall in revenue for all operators for the duration of the pandemic to prevent their collapse.
Corporate roundup: Novacyt, Smith and Nephew, Kier
Smith and Nephew, the medical technology group, withdrew the full-year financial guidance it issued on February 20. It assumed then the impact from Covid-19 outbreak would be "normalised" early in the second quarter. The group expects underlying first-quarter revenue growth to be down about 8 per cent compared with the same period a year ago. It forecasts second-quarter revenue and its first-half trading margin to be "substantially down".
Kier said its management and staff will be taking a cut in their salaries for three months. The group that maintains UK highways and provides facilities management services to the National Health Service said trading from January 1 to now has been in line and has about 80 per cent of its sites operating. Many of its services have government support while employees in the main are deemed key workers. Its about 6,500 employees, including the executive committee, and the board will take a pay cut of between 7.5 per cent and 25 per cent for a three-month period beginning on April 1.
Novacyt, the Anglo-French coronavirus testing group, said it has sold and received orders for more than £17.8m of its research-use only Covid-19 tests. Primerdesign, the group's molecular diagnostics division, on Friday received its largest single order of £1.4m from a new customer in India.
EasyJet grounds entire fleet as pandemic impact bites
EasyJet has grounded its entire fleet of aircraft as the impact of the pandemic tightens its grip on the airline industry.
The European low-cost airline, hit by nationwide lockdowns in many European countries, has been hit by government-imposed travel restrictions. The group operated its final rescue flights on Sunday as part of its efforts to repatriate passengers, returning home more than 45,000 people in about 650 flights.
"We will continue to work with government bodies to operate additional rescue flights as requested," the group said in a statement on Monday. "The grounding of aircraft removes significant cost."
It will pay its crew 80 per cent of their average pay from April 1 through the government job retention scheme. EasyJet has no date for restarting its commercial flights.
European stock futures tick up even as oil drops
European markets were poised for a modestly upbeat start to the week, with futures pointing higher despite a renewed fall in oil prices.
Futures tracking London's FTSE 100 rose 0.8 per cent, with German Dax futures climbing 1.4 per cent and French CAC 40 futures up 1.7 per cent. Stoxx 600 futures advanced 1 per cent.
The rise in equities futures comes despite a fresh fall in the price of oil. West Texas Intermediate, the US benchmark, slid below $20 a barrel overnight, and was recently down 3.9 per cent at $20.67. Brent, the international marker, was off 5.9 per cent at $23.46.
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The Australian government has tightened its scrutiny of foreign takeovers over concerns overseas companies could buy up strategic assets on the cheap during the coronavirus crisis.
China's central bank cut its short-term lending benchmark on Monday and injected Rmb50bn ($7.1bn) into the financial system as the country grappled with the prospect of sharply slower growth due to the coronavirus pandemic.
The South Korean government plans to grant “emergency disaster relief money” to a majority of Korean households to cushion the blow from Covid-19 to Asia’s fourth-largest economy.
Health authorities in China reported 31 new confirmed coronavirus cases to the end of Sunday, 30 of which were imported cases.
United Arab Emirates introduces drive-through testing for virus
Simeon Kerr reports from Dubai
The United Arab Emirates is launching drive-through coronavirus testing centres over the next 10 days.
Sheikh Mohammed bin Zayed Al Nahyan, Abu Dhabi’s crown prince, on Monday instructed the oil-rich emirate’s health service to set up the centres across the federation of seven emirates to provide fast-paced tests for nationals and residents.
The first drive-through centre was launched in the capital on Saturday, offering a five minute, in-car test for Covid-19. Other centres are set to open in Dubai, Sharjah, which will also serve Ajman and Umm al-Quwain, Ras Al Khaimah, Fujairah, as well as Al Ain and Al Dhafra in Abu Dhabi.
The UAE on Sunday reported 102 new cases, bringing the total to 570, with three deaths. The country has extended a week-long lockdown, asking residents to stay at home as much as possible during the day and imposing a night-time curfew on everyone except key workers.
Australia announces ‘jobkeeper’ payment for workers
Jamie Smyth in Sydney
Australia has unveiled a A$130bn ($80bn) plan to subsidise the wages of workers who risk losing their jobs as a result of the coronavirus crisis.
The government said on Monday it would pay businesses A$1,500 per worker every fortnight to incentivise companies not to make staff redundant and keep them on their payroll. The payment, which is equivalent to about 70 per cent of the average wage, must be advanced to workers under the terms of the scheme.
The government’s “jobkeeper payment” will last for up to six months and will be backdated to cover employees let go since March 1. Small and medium sized companies become eligible for the payments when their revenues fall by 30 per cent or more. Companies with revenues of more than A$1bn become eligible for the payments when their revenues fall by 50 per cent or more.
Companies have stood down up to 100,000 employees over the past two weeks due to strict social distancing rules and restrictions put in place due to the coronavirus.
The jobkeeper scheme aims to persuade companies to keep staff on their books until the crisis passes, rather than make them redundant.
Scott Morrison, Australia’s prime minister, said the scheme was more generous than a similar scheme in operation in New Zealand and broader than an equivalent scheme in the UK.
“We want to keep the economy running through this crisis, it may run in idle for some time, but it must run,” said Mr Morrison.
Shadow banking contracts in China as leverage rises elsewhere
Hudson Lockett reports from Hong Kong
A fall in trust lending led a contraction of Rmb300bn ($42.3bn) for shadow banking credit in China during the first two months of the year, according to a Moody’s analysis that points to a further rise in leverage elsewhere as the world’s second-largest economy grapples with the economic impact of coronavirus.
Trust lending, a core segment of China’s shadow banking industry, fell 5 per cent year on year as core shadow credit shrank to about Rmb21.9tn, according to the quarterly shadow banking monitor from Moody’s Investors Service.
Moody’s estimates that for all of 2020 broad shadow banking assets – covering other key segments including wealth management products – fell Rmb2.3tn to Rmb59tn, while overall credit growth held at 9 per cent.
Analysts expected this pace of overall credit growth to “continue into the new year as the central bank’s easing measures amid the outbreak will likely increase leverage further while economic growth will be markedly lower in coming quarters”.
But a slew of missed payments on shadow banking products in recent weeks has raised fears of a cascade of defaults in the $8.4tn industry. And hundreds of investors are now calling for the government to nationalise one of the country’s shadow banks after it allegedly failed to repay the principal on a trust product on time.
Read the full story here.
South Korea plans cash handouts for households
Song Jung-a reports from Seoul
The South Korean government will draw up another extra budget plan to grant “emergency disaster relief money” to a majority of Korean households to cushion the blow from Covid-19 to Asia’s fourth-largest economy.
President Moon Jae-in said on Monday the government will quickly push for the second supplementary budget bill so that it can be approved by parliament soon after the April 15 legislative elections. Under the scheme, Won1m ($820) will be provided to a four-person household at the bottom 70 per cent of income bracket.
“No one can predict how deep a scar Covid-19 will leave on the global economy and how long the scar will last,” Mr Moon told an emergency economic meeting. “Things are difficult right now but the future is also uncertain. We need to take a long-term approach to revive the economy.”
Mr Moon said it was “not an easy decision” but the people deserve “compensation” for their difficulties as their daily life is upended by the intensifying social distancing campaign and other prevention measures.
He added that the government needed to reserve firepower to prepare for further economic shocks and to address the weakening job market and liquidity shortages at companies.
Mr Moon has unveiled record stimulus packages worth more than $80bn to shore up the faltering economy and parliament has already approved a Won11.7tn supplementary budget plan over the coronavirus.
China's central bank cuts short-term lending rate to boost liquidity
Hudson Lockett reports from Hong Kong
China's central bank cut its short-term lending benchmark on Monday and injected Rmb50bn ($7.1bn) into the financial system as the country grappled with the prospect of sharply slower growth due to the coronavirus pandemic.
The People's Bank of China cut the seven-day reverse repo rate used to manage short-term liquidity by 0.2 percentage points, taking it to 2.2 per cent. Lowering the rate, which sets the cost of seven-day lending from the central bank, is a far less substantial easing measure than a cut to the central bank's main policy lever — the medium-term lending facility rate.
But the move, which came alongside an injection of about $7bn through seven-day reverse repos, will pull down the cost of short-term loans and boosts interbank liquidity, providing some relief from tight funding conditions.
The PBoC last cut the short-term rate in February by 0.1 percentage points as the country's financial system returned from an extended lunar new year holiday.
South Korea lowers P2P lending cap on fears of rising delinquencies
Song Jung-a reports from Seoul
South Korea’s financial regulators have lowered the peer-to-peer lending cap from Won50m ($41m) to Won30m ($24.5m) due to concerns about a rise in delinquent and toxic loans amid the fallout from the global coronavirus pandemic.
The revised rules also allow individuals to lend up to Won10m ($8.2m) for property-related investment products, lowered from the original Won30m proposed in the P2P regulation bill approved last November, the Financial Services Commission said on Monday. The rules apply from August 27.
The revision is also aimed at protecting consumers by preventing deceptive P2P lending as the coronavirus continues to impact Asia’s fourth-largest economy.
Under P2P lending loans are often offered to individuals and businesses through social media and the internet, covering a wide range of investment products for startups and small merchants.
Outstanding P2P loans in South Korea have increased to Won2.4tn ($2bn) as of the end of February from about Won750bn ($614m) at the end of 2017, while their delinquency ratio rose from 5.5 per cent to 14.9 per cent, according to the FSC.
Mexico steps up appeals for citizens to stay at home
Jude Webber reports from Mexico City
Mexico reported 993 confirmed coronavirus cases nationally and 20 deaths as the health ministry stepped up its appeals for people to stay at home and traffic data suggested compliance to date was slow.
Mexico’s health undersecretary said on Saturday that compliance with the stay at home appeal, which the government is not enforcing, was around 30 per cent and said Mexico was facing a now or never moment to slow the spread of the virus and spare the impact on the health service.
Mexico City’s traffic congestion was down 36 per cent, compared with early March, according to data from navigator Waze, shared on social media by sustainable mobility activist Xavier Treviño Theesz. According to journey planning app Moovit, public transport use was down 50 per cent compared with mid-January.
China reports 30 new imported coronavirus cases
Health authorities in China reported 31 new confirmed coronavirus cases to the end of Sunday, 30 of which were imported cases, with the remaining infection reported in Gansu province. The number of new imported cases was down from 44 a day earlier.
Overall, mainland China has reported 81,470 coronavirus infections. However, experts have highlighted the existence of unreported cases, particularly for patients that show no symptoms.
There were four new deaths to the end of Sunday, taking the total number of fatalities to 3,304.
Australia tightens scrutiny of foreign takeovers
Jamie Smyth reports from Sydney
The Australian government has tightened its scrutiny of foreign takeovers over concerns overseas companies could buy up strategic assets on the cheap during the coronavirus crisis.
It follows warnings from two government MPs that distressed companies in the aviation and freight sectors could become vulnerable to takeovers by state-owned enterprises from authoritarian regimes, including China.
Josh Frydenberg, Australia’s Treasurer, said on Monday all foreign investment and takeover proposals would now be scrutinised by the government’s foreign investment review board to protect the national interest. However, he denied the measures were aimed specifically at China, noting Beijing was only the fifth-largest overseas investor in Australia last year while the US was the largest.
“These are extraordinary times and we have seen the value of Australian companies, indeed companies right around world, be severely diminished because of the coronavirus and we don’t want predatory behaviour that is not in the national interest occurring,” Mr Frydenberg told Australian radio.
The temporary changes to regulations will apply to existing and new investment proposals. Previously, most foreign takeovers and investments proposed by private companies were not considered by the Australian government unless they were worth more than A$1.1bn.
Richard McGregor, analyst at Lowy Institute, said the new measures were no doubt made with Beijing’s state-owned enterprises in mind, especially as conspiracy theories are swirling about how China is using the crisis as an opportunity to assert its influence.
“But vultures come in many forms, and I think this will end up applying to lots more companies than just those from China,” he said.
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Trump extends US social distancing guidelines to April 30 Donald Trump has extended the US social distancing guidelines until the end of April, amid predictions that the number of deaths there could rise to 100 times what the country has seen so far. One of his most senior medical advisers warned that the death toll could reach 200,000, up from just over 2,000 today.
Mexico López Obrador says self-isolation would play into hands of opposition Despite desperate pleas by the health ministry for people to stay at home, Mexican President Andrés Manuel López Obrador again appeared to minimise and politicise the looming Covid-19 crisis.
Ft Lauderdale mayor demands strict docking protocols for Zaandam cruise liner A stricken cruise liner with four dead, two confirmed coronavirus patients and 138 passengers and crew with flu-like symptoms aboard was on course to transit the Panama Canal on Sunday evening en route to Florida.
Nigeria orders two-week lockdown of Lagos and Abuja Nigeria's president has ordered a two-week lockdown of the commercial capital Lagos and the federal capital Abuja as Africa's most populous country nears 100 coronavirus cases. He also said all commercial and private aircraft would be grounded.
Moscow to impose full quarantine upon residents from Monday Moscow’s mayor has ordered a full quarantine of citizens from Monday, banning all residents from leaving their homes except for absolute necessities.
New York fatalities climb towards 1,000 New York recorded an additional 237 coronavirus deaths over the last 24 hours, bringing the state's total to 965.
UK could take six months or longer to get 'back to normal' It could be up to six months – and perhaps longer – before British people can return to their “normal” lives, according to the deputy chief medical officer. Speaking at the government’s daily press briefing Jenny Harries said lockdown measures would have to be gradually lessened and that dropping restrictions suddenly would be “quite dangerous”.
Oil prices slump, Asia stocks fall as coronavirus measures extended
US oil prices fell below $20 a barrel, Asia equities slipped and US stock futures moved lower as governments said social distancing measures to stem the spread of coronavirus would have to be extended.
West Texas Intermediate, the US benchmark, fell more than 7 per cent to a low of $19.92 a barrel, the lowest level in 18 years, as the hit to global economies from coronavirus dents demand. International benchmark Brent crude was down 5.7 per cent at $23.50 a barrel.
Japan’s Topix fell 2.7 per cent and the Kospi in South Korea was down 3.2 per cent in early trading. The S&P/ASX 200 in Australia was an outlier, up 0.8 per cent. S&P 500 futures slipped 1.2 per cent.
US President Donald Trump announced on Sunday night that the guidelines to avoid social contact would remain in place until April 30, following a warning from one of his most senior medical advisers that the death toll from coronavirus could reach 200,000.
The S&P 500 had ended down 3.4 per cent on Friday as investors piled into haven assets such as US Treasuries ahead of the weekend. The index had gained 10.3 per cent for the week amid relief over a $2tn emergency stimulus package.
Signs of slowdown in countries' death rates and growth of cases
Steve Bernard in London
Every day the Covid-19 virus is infecting an increasing number of people. However, the rate of growth in countries is starting to slow.
Among countries with more than 5,000 cases, this is most visible in Spain, which two weeks ago had a growth rate above 40 per cent per day on average and has seen this number fall to about 15 per cent.
The US continues to see increases above 25 per cent per day, but have fallen from recent highs of nearly 40 per cent. Iran, one of first countries to see a major outbreak outside of China, has started to see an increase again in recent days, edging back up to nearly 10 per cent.
The same also looks to be true with deaths.
Among countries with more than 100 deaths, this slowing down is most visible in Spain, which two weeks ago had a growth rate above 50 per cent per day on average, and has seen this number fall to about 20 per cent.
Global coronavirus cases exceed 700,000
Steve Bernard in London
The total number of cases worldwide has surpassed 700,000 on Sunday as an additional 44,279 people were confirmed to have contracted coronavirus.
The US has so far added 9,516 cases in the past day to about 133,000, with 21 states still to report their numbers.
https://news.google.com/__i/rss/rd/articles/CBMiP2h0dHBzOi8vd3d3LmZ0LmNvbS9jb250ZW50LzUzYjU3ZTYzLTkxMjAtMzY3Zi1iNzIzLWU2OTRmZmQyOGY1N9IBP2h0dHBzOi8vYW1wLmZ0LmNvbS9jb250ZW50LzUzYjU3ZTYzLTkxMjAtMzY3Zi1iNzIzLWU2OTRmZmQyOGY1Nw?oc=5
2020-03-30 07:49:04Z
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