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(Alliance News) - The following is a summary of top news stories Monday.
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COMPANIES
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easyJet founder and largest shareholder Stelios Haji-Ioannou warned that he will seek removal of the entire board unless the company cancels a GBP4.5 billion aircraft contract with Airbus, as the budget airliner grounded its entire fleet. In a letter addressed to easyJet's board, Haji-Ioannou said he will send notices of general meetings to remove non-executive directors of the company for dereliction of duty unless his demands are met. He owns 34.4% of the company. Haji-Ioannou is asking easyJet to cancel its aircraft order with Airbus citing "force majeure" options for companies declared by the French government and arguing that the contract is null and void because the customer is unable to use the aircraft for the purpose they were intended, namely, the carriage of fare paying passengers by air. easyJet separately said that it has grounded its entire fleet due to "unprecedented" travel restrictions imposed by governments around the world in response to the coronavirus pandemic.
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Johnson Matthey said it expects its trading performance for financial 2020 to be hurt to the tune of around GBP50 million amid the Covid-19 outbreak. The company attributed the loss of around GBP50 million to reduced demand in Clean Air, which serves the largely shut auto industry, as well as the delay of around GBP20 million worth of shipments caused by logistics challenges across its other business. Johnson Matthey added that it has decided to temporarily close most of its Clean Air plants across the world, except in China which is "ramping back up as the region starts to recover from Covid-19".
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Smith & Nephew withdrew its prior financial guidance, issued in February, due to the rapid expansion of the virus beyond China since then and said that it will not give further guidance until the situation becomes clearer. The medical devices company had said it expected its underlying revenue growth to be in the range of 3.5% to 4.5% in 2020. In addition, the company had said it expected to deliver a 2020 trading profit margin at or slightly above the 2019 level of 22.8%. In 2018, trading margin stood at 22.9%. Smith & Nephew, which reports first-quarter earnings in May, expects that underlying revenue growth for the first quarter will be around 8% lower on the first quarter of last year. It also expects that second quarter revenue and first half trading margin will be substantially down on the prior year.
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Pennon Group said it is in strong financial position to continue operations following the sale of its Viridor waste management unit. Pennon said its performance in the financial year to the end of March was in line with management expectations. Pennon said it is well positioned with strong funding and liquidity to weather the uncertainty caused by the Covid-19 health crisis. By division, the company said South West Water revenue in financial 2020 was reduced due to prolonged wet weather, compared with rainfall experienced last year. More positively, Pennon said operationally, South West Water has performed well, ensuring minimal impact to customers at times of extreme wet and stormy weather.
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The UK government has asked the VentilatorChallengeUK consortium - a group which includes some of the biggest industrial, technology and engineering businesses in the country - to produce ventilator systems to aid in the fight against Covid-19. The consortium includes London-listed firms such as Rolls-Royce Holdings, Melrose Industries's GKN Aerospace, Meggitt, Smiths Group and BAE Systems, as well as Airbus and Microsoft Corp. Companies in the consortium have now received formal orders from the government for in excess of 10,000 ventilator units. Financial terms of the order were not disclosed.
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Renault has halted all of its plants, excluding those in China and South Korea, as a result of "the impact of the Covid-19 sanitary crisis". The car maker intends to restart production "as soon as conditions permit" and plans to put measures in place so that it effectively responds to demand. US stock market futures erased earlier losses and resumed gains in a volatile session.
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MARKETS
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London shares were lower amid worries about the depth of the economic slump that will be caused by the current health crisis. easyJet shares were down 6.9%. The pound was down against the dollar on fears of a prolonged Covid-19 lockdown in the UK.
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FTSE 100: down 0.9% at 5,459.12
FTSE 250: down 3.1% at 14,307.75
AIM ALL-SHARE: down 1.5% at 654.52
GBP: down at USD1.2385 (USD1.2427)
EUR: flat at USD1.1069 (USD1.1071)
GOLD: down at USD1,620.54 per ounce (USD1,626.20)
OIL (Brent): down at USD23.01 a barrel (USD25.03)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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The global coronavirus death toll surged past 30,000 over the weekend as Europe and the US endured their darkest days of the crisis. A back-flip from US President Donald Trump on quarantining New York highlighted the panic and confusion across many parts of the world in trying to contain the pandemic, which has seen more than a third of humanity placed under unprecedented lockdowns. More than 30,800 deaths had been reported worldwide by Sunday, according to a Johns Hopkins University tally, as the virus continued to leave a devastating imprint on nearly every aspect of society: wiping out millions of jobs, overwhelming healthcare services and draining national treasuries. Europe alone accounted for more than 20,000 fatalities, where hardest-hit Italy and Spain each reported more than 800 dead in one day. Trump decided late Saturday against imposing a broad lockdown on New York and its neighbours after a strong pushback from local political leaders and warnings of the panic it could spark.
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Trump signed into law Friday the USD2 trillion rescue plan to salvage a US economy crippled by the novel coronavirus, on a day the nation's total count of Covid-19 cases surpassed 100,000. Trump's signature brings an end to a dramatic, week-long legislative saga on Capitol Hill and triggers the distribution of millions of relief checks of up to USD3,400 for an average American family of four.
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US Democratic Party front-runner Joe Biden holds a narrowing lead over Trump in a new poll looking at this year's elections, but is not sparking enthusiasm among supporters, highlighting what could be a weakness in his campaign. The latest poll from ABC and the Washington Post showed Biden ahead of Trump just 49% to 47%, a statistical dead heat, among registered voters. Trump has significantly narrowed the gap compared to February, when the former vice president was ahead of the incumbent 52 to 45.
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Boris Johnson said the UK will get through the coronavirus crisis "together" after Britons were warned restrictions on their lives may last for at least six months. The UK prime minister issued the words of encouragement, praising the 750,000 volunteers who have offered to assist the NHS, from within Downing Street where he is isolating having tested positive for Covid-19. Deputy chief medical officer for England Jenny Harries said the nation will not be in "complete lockdown" for half a year but said social distancing measures will be lifted gradually. Her warning at Sunday's coronavirus press conference came as the NHS announced the first confirmed death of a frontline hospital worker with Covid-19.
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Sentiment in the eurozone fell sharply in March, data from the European Commission showed. The economic sentiment indicator fell by 8.9 points to 94.5 in the eurozone - the fastest monthly decline in the indicator on record - and by 8.2 points to 94.8 in the wider European Union. In the single currency bloc, the sharp drop resulted from slumping confidence among consumers and in all business sectors, notably in services and retail. Amongst the largest euro area economies, the indicator in Italy plummeted by 17.6 points and in Germany by 9.8 points.
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