(Alliance News) - Primark-owner Associated British Foods and Ladbrokes Coral-operator GVC Holdings were among those on Monday forecasting how the latest lockdown planned to start on Thursday in England will hit business, while online grocer Ocado upped its annual earnings guidance.
AB Foods predicted a GBP375 million hit due to closures of its estate in the UK and beyond.
"As of today, all Primark stores in the Republic of Ireland, France, Belgium, Wales, Catalonia in Spain and Slovenia are temporarily closed, which represent 19% of our total retail selling space," AB Foods said.
With England braced for restrictions starting from Thursday, AB Foods added that 57% of its total selling space will be shuttered from November 5.
"Our estimated loss of sales for these stores, including the stores in England, for the announced periods of closure is GBP375 million. Trading hours are also restricted in a number of other markets. Uncertainty about further temporary store closures in the short-term remains," the company added.
The short update on Monday comes just a day before the company's annual results on Tuesday.
AB Foods shares were down 3.6% early Monday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.1% at 5,572.18
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Hang Seng: up 1.5% at 24,478.57
Nikkei 225: closed up 1.4% at 23,295.48
DJIA: closed down 157.51 points, or 0.6%, at 26,501.60
S&P 500: closed down 1.2% at 3,269.96
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GBP: down at USD1.2902 (USD1.2952)
EUR: down at USD1.630 (USD1.1649)
Gold: up at USD1,881.42 per ounce (USD1,879.42)
Oil (Brent): down at USD36.42 a barrel (USD37.68)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Monday's Key Economic Events still to come
0930 GMT UK CIPS-Markit manufacturing purchasing managers index
0955 CET Germany manufacturing PMI
1000 CET EU eurozone Manufacturing PMI
0945 EST US manufacturing PMI
1000 EST US ISM report on business manufacturing PMI
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Germany led a further tightening of coronavirus restrictions in Europe that have triggered anger and frustration across the continent, while the Covid-19 crisis in the US deepened. The virus has infected more than 46 million people worldwide, with close to 1.2 million deaths, and the acute outbreaks in Europe and America sparking further alarm about the state of the already devastated global economy. To curb the spike in Germany, Chancellor Angela Merkel has ordered a round of shutdowns from Monday until the end of the month. Germans will not be confined to their homes, but bars, cafes and restaurants must close, as well as theatres, operas and cinemas. England prepared for fresh stay-at-home orders, following in the steps of Austria, France and Ireland, with many expressing anxiety about the economic cost of the four-week shutdown due to take effect from Thursday. Tighter lockdown rules were also set to kick in Monday for Belgium, which has the most Covid-19 cases per capita in the world. Portugal, too, has ordered a partial lockdown starting Wednesday. And in France, Prime Minister Jean Castex said supermarkets would be barred from selling "non-essential" items from Tuesday to protect small shopkeepers who have been forced to close. Spain has already imposed a night-time curfew, and almost all of its regions have implemented regional border closures to prevent long-distance travel. The Italian government is expected to announce new restrictions on Monday, according to news reports, with the health minister pushing for a countrywide lockdown.
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The US presidential campaign enters its final day Monday with a last-minute scramble for votes by Donald Trump and Joe Biden, drawing to a close an extraordinary race that has put a pandemic-stricken country on edge. But while campaigning will halt and voters will have their say on Tuesday, many questions remain over how soon a result will be known due to a flood of mail-in ballots and possible legal challenges. Those factors, along with an unprecedented convergence of social justice protests, coronavirus precautions and President Trump's fear-mongering campaign, have led to apprehension over whether unrest could erupt. As proof of how much Americans have been galvanized – and perhaps frightened by the pandemic – a record of more than 93 million people have cast early ballots, including in-person and mailed votes, according to the nonpartisan US Elections Project.
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Data from IHS Markit and Caixin on Monday showed China's manufacturing activity expanded for the sixth straight month in October, reaching its highest level since January 2011. The Caixin China general manufacturing purchasing managers' index reading for last month was 53.6 points, up from 53.0 points in September. A reading above 50 signals expansion, while a reading below shows contraction. On Saturday, the official data showed a slightly less positive PMI reading of 51.4 points, slightly down from 51.5 in September, but also still showing expansion.
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Japan's manufacturing sector improved marginally in October but remained in contraction levels, data from IHS Markit revealed. IHS Markit said the au Jibun Bank manufacturing purchasing managers' index reading was 48.7 points last month, up from 47.7 points in September.
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BROKER RATING CHANGES
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LIBERUM RAISES GLAXOSMITHKLINE TO 'BUY' ('HOLD') - TARGET 1,730 (1,900) PENCE
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HSBC CUTS UNITED UTILITIES TO 'HOLD' ('BUY') - TARGET 900 (1,000) PENCE
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DEUTSCHE BANK CUTS IBSTOCK TO 'HOLD' ('BUY') - TARGET 168 (183) PENCE
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COMPANIES - FTSE 100
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High street betting shop operator GVC expects a GBP43 million hit to group earnings before interest, tax, depreciation and amortisation. "Further restrictions have now been imposed in England, in addition to those already in place across our wider UK Retail and European Retail operations," GVC said. The estimated earnings before interest, tax, depreciation and amortisation impact if all retail outlets were required to be closed for a whole month would be GBP43 million, GBP34 million down to its UK retail unit and GBP9 million from its European arm. Crucially for GVC, football fixtures in England are set to continue, despite the new restrictions. The stock was down 2.1% early Monday.
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Ocado on the flip-side, raised Ebitda guidance, as its Marks & Spencer Group joint-venture grows in strength. The online retailer expects annual Ebitda to be over GBP60 million, up from its previous forecast of GBP40 million. "Trading at Ocado Retail Ltd, a joint venture between Ocado Group and Marks & Spencer Group, has remained strong through the fourth quarter of the current financial year. Ocado continues to see high demand as consumers migrate to online grocery in record numbers. Sales are in line with the trends reported in the third quarter although growth rates reflect the seasonality of the quarter," Ocado said. The company also unveiled USD287 million worth of acquisitions. It reported the proposed acquisitions of Kindred Systems, a piece-picking robotics company, for USD262 million, and Haddington Dynamics, a robotic-arm designer and manufacturer for USD25 million.
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COMPANIES - FTSE 250
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Insurer Hiscox said its retail business has benefited from a shift to digital. Group gross written premiums are 2% higher after the nine months to September 30 at USD3.26 billion from USD3.21 billion a year earlier. "We are benefiting from the inexorable shift towards digital in our Retail businesses thanks to our on-going investment in technology, as well as the strongest pricing we have seen in the London Market and in reinsurance for more than five years," Chief Executive Officer Bronek Masojada said. Hiscox said there was no change to its Covid-19 claims and potential exposure estimate, which is USD387 million net of reinsurance. "This includes USD232 million reserved in the first half, including USD150 million for event cancellation and abandonment, with the balance across a variety of other lines. It also includes USD130 million for COVID-19 claims arising from business interruption across all divisions, with the majority coming from Hiscox UK, and USD25 million for event cancellation and abandonment, on the basis that current restrictions on travel and mass gatherings continue until the end of the year," Hiscox added.
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COMPANIES - MAIN MARKET AND AIM
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Budget carrier Ryanair posted a 78% drop in revenue in the first half ended September. Revenue came in at EUR1.18 billion from EUR5.39 billion and the airline swung to a pretax loss of EUR432.3 million from a EUR1.26 billion profit. Customer numbers were 80% lower at 17.1 million, demonstrating the hit Ryanair has taken from Covid-19 travel restrictions. "The group expects to carry approximately 38 million passengers in financial 2021, although this guidance could be further revised downwards if EU governments continue to mismanage air travel and impose more uncoordinated travel restrictions or lock downs this winter. The group expects to record higher losses in H2 than in H1," Ryanair said, looking ahead.
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Monday's Shareholder Meetings
Manchester & London Investment Trust PLC - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.
