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(Alliance News) - The following is a summary of top news stories Thursday.
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COMPANIES
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easyJet said it expects demand for the next three years to be lower than in 2019 as it announced plans to cut the number of people it employs and the number of planes it flies. The low-cost airline confirmed its plans to resume flights on June 15, adding that booking trends on the scheduled flights have been encouraging with the demand indications for summer 2020 showing improvement, albeit from a low base. Bookings for winter are well ahead of the equivalent point last year, including customers who are rebooking coronavirus-disrupted flights for later dates. easyJet said in its financial fourth quarter to the end of September, it expects to fly around 30% of the planned capacity flown in the comparative period a year ago. In an effort to cut spending, easyJet said it plans to reduce staff numbers by up to 30%, it has around 15,000 full-time employees - including 8,000 based in the UK - meaning a maximum of 4,500 jobs are at risk. By the end of September next year it expects to have reduced its fleet size by around 51 aircraft to approximately 302. This will be achieved through measures such as deferring new aircraft arrivals.
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Cineworld Group said its lenders have agreed to waive the leverage covenant for the June testing date, as it announced plans to reopen cinemas in July. The FTSE 250-listed movie house chain said its lenders agreed to increase the leverage covenant for the December test to 9.0 times net debt to earnings before interest, tax, depreciation and amortisation. Cineworld added it agreed the terms of USD110 million of additional liquidity through an increase in its revolving credit facility. It has also secured credit committee approval to apply for an additional USD45 million through the UK Coronavirus Large Business Interruption Loan Scheme and expects shortly to start a process to access USD25 million through the US government CARES Act. Cineworld unveiled plans to reopen all its cinemas in July, in anticipation of the lifting of government-enforced restrictions everywhere it operates.
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Bodycote reported a dive in revenue for the first four months of 2020 as it announced a restructuring programme that will cut 13% of its staff. The coatings services firm said that revenue to the end of April was 12% lower year-on-year at GBP216 million, down 11% at constant currency and 13% excluding the impact of acquisitions. For April, constant currency revenue was 30% lower than the same month in 2019, or 35% lower excluding the impact of acquisitions. Bodycote said it has commenced a restructuring programme which will cut 700 staff - around 13% of headcount. It said alongside savings in infrastructure from closed plants, it expects to permanently slash around GBP45 million of annualised costs. A further temporary reduction in staff and a restriction on expenditure is expected to result in savings of around GBP7 million per month.
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Online clothing retailer boohoo Group said it has bought the remaining stake in PrettyLittleThing from the co-founder's son, a day after defending itself over the issue against a short seller. boohoo said it is buying the remaining 34% stake in PrettyLittleThing from minority shareholders Umar Kamani and Paul Papworth for an initial consideration of GBP269.8 million, potentially rising to GBP323.8 million including a potential further contingent payout of GBP54 million. The initial GBP269.8 million consideration will be settled through a combination of shares in boohoo totalling GBP107.9 million and an up-front cash payment of GBP161.9 million, funded from the GBP240.7 million of net cash that the company had on its balance sheet at February 29. The chief executive and founder of PrettyLittleThing is Umar Kamani, son of boohoo Chair & co-founder Mahmud Kamani.
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MARKETS
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London shares were extending their rally amid growing optimism over reopening economies, as investors looked past building US-China tensions for now. Stocks in the US were pointed to a mixed open ahead of the second estimate of US GDP at 1330 BST.
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FTSE 100: up 0.4% at 6,171.47
FTSE 250: up 0.7% at 17,240.61
AIM ALL-SHARE: up 1.7% at 867.96
GBP: firm at USD1.2270 (USD1.2217)
EUR: up at USD1.1011 (USD1.0977)
GOLD: up at USD1,723.15 per ounce (USD1,701.04)
OIL (Brent): soft at USD34.36 a barrel (USD34.43)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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People who come into close contact with a coronavirus sufferer will be told to self-isolate for 14 days as the UK government launches its tracing system amid mounting Tory anger over Dominic Cummings' alleged lockdown breaches, PA reports. NHS Test & Trace - seen as key to easing the restrictions - will be rolled out across England on Thursday with the help of 25,000 contact tracers, while an accompanying app is still delayed by several weeks. It comes amid a growing revolt within the Conservative Party over the prime minister's chief adviser's controversial trip to Durham - with dozens of backbench Tories criticising his actions, and at least 38 calling for him to quit or be sacked. And senior minister Penny Mordaunt admitted there were "inconsistencies" in Cummings' account - saying "there is no doubt he took risks". Boris Johnson continued to stand by his aide and insisted it was time to "move on" when he faced intense questioning over the issue in an appearance before the Commons Liaison Committee of senior MPs on Wednesday.
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The governor of the Bank of England has warned Britain's economic recovery from the coronavirus crisis will be tougher than expected, saying a fresh wave of money creation methods will be needed. Andrew Bailey has shied away from idea of cutting official interest rates to below zero for the first time in the bank's 326-year history. Instead, he says more economic support is likely to come in the form of quantitative easing - in which the bank buys government bonds from investors, pumping money into the economy in the process. Since the crisis began in March, the bank has cut official interest rates to 0.1%, announced a GBP200 billion expansion of QE, made moves to ease the financial pressure on large companies and made it easier for banks to lend. Bailey is wary, however, of going further by taking interest rates negative. "We have signalled that we stand ready to do more within the framework of policies we have used to date," he wrote in The Guardian.
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China's parliament adopted a controversial national security law for Hong Kong on Thursday, in a move expected to spur protests in the financial hub and heightened tensions with the US. The law bypasses Hong Kong's internal legislature to punish acts seen as endangering national security and subverting state power in the semi-autonomous Chinese territory. Beijing may also set up outposts of mainland agencies in Hong Kong to curb violent protests and what it describes as interference by foreign countries. The law passed at the end of the annual parliamentary session, the National People's Congress, with 2,878 votes for, one vote against and six abstentions.
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The US coronavirus death toll passed 100,000 as the pandemic tightened its grip on South America, which is outpacing Europe and the US in daily infections, AFP reports. Global cases have surged to nearly 5.7 million, with more than 354,000 deaths, and the worrying acceleration of the disease in South America has marked the continent as the new hotspot. Deaths in Brazil topped 25,000 on Wednesday, and its caseload is second only to the US, where authorities have moved to ease lockdowns and help the battered economy, despite experts recommending they remain on guard for a resurgence of the disease. Nearly 1.7 million Americans are known to have been infected with the disease, according to a Johns Hopkins University tally.
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