LONDON BRIEFING: Aston Martin And Taylor Wimpey To Up Tools

(Alliance News) - UK manufacturers and housebuilders on Thursday started to reveal plans to resume production following the Covid-19 lockdown.

Aston Martin said it plans to re-open its St Athan manufacturing facility in May.

The luxury car maker said it has been working closely with suppliers to make sure supply is aligned to this timing. Gaydon's manufacturing operations are planned to resume later, "taking the learnings" from the St Athan reopening.

Taylor Wimpey said it plans to restart work on its building sites the week beginning May 4 with its own staff following new safety guidelines, while subcontractor will resume the following week.

"We took an early decision at the end of March to close our sites while we assessed in detail how to build homes without compromising on health and safety or quality. We are now confident that we have clear plans and processes in place so we can safely start back on site in a phased way beginning on 4 May," the company said, adding its sales centres will remain closed until a general lifting of the UK lockdown.

Aston Martin shares were up 7.7% early Thursday, while Taylor Wimpey was up 6.5%.

Here is what you need to know at the London market open:

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MARKETS

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FTSE 100: marginally higher at 5,772.08

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Hang Seng: up 0.5% at 24,013.71

Nikkei 225: closed up 1.5% at 19,429.44

DJIA: closed up 456.94 points, 2.0%, at 23,475.82

S&P 500: closed up 2.3% at 2,799.31

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GBP: up at USD1.2348 (USD1.2323)

EUR: down at USD1.0818 (USD1.0829)

Gold: up at USD1,715.84 per ounce (USD1,708.20)

Oil (Brent): up at USD22.21 a barrel (USD20.44)

(changes since previous London equities close)

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ECONOMICS AND GENERAL

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Thursday's Key Economic Events still to come

0930 BST UK flash purchasing managers' index for manufacturing and services

1100 BST UK CBI industrial trends survey

0930 CEST Germany flash PMI

1000 CEST EU flash PMI

0830 EDT US initial jobless claims

0945 EDT US flash manufacturing and services PMIs

1030 EDT US EIA weekly natural gas storage report

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UK borrowing in the recently ended tax year was GBP48.7 billion, the Office for National Statistics said, higher than both the fiscal watchdog's forecast and the previous year's figure. Borrowing in the month of March alone was GBP3.1 billion, the highest borrowing in March since 2016 and GBP3.9 billion more than a year ago. This brought borrowing in the full financial year, which runs April to March, to GBP48.7 billion, up GBP9.3 billion on the prior year. This was also GBP1.3 billion more than forecast by the Office for Budget Responsibility last month. The impact of Covid-19 on the latest figures is "relatively limited", the ONS said. The full effects will become clearer in the coming months, meaning some of the latest figures will be prone to larger-than-normal revisions.

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A coronavirus vaccine is unlikely to be available before the year is out despite tens of millions of pounds being poured into UK trials that start imminently. Health Secretary Matt Hancock confirmed GBP41 million of additional investment this week for vaccine research taking place at Oxford University and Imperial College London, with Oxford given the green light to start human trials on Thursday. But Chris Whitty, England's chief medical officer, poured cold water on hopes that an impending vaccine could be the way out of the UK Covid-19 lockdown. He told reporters at the daily Downing Street press briefing that some social distancing measures would need to stay in place until there was a vaccine or drug which reduced the severity of Covid-19.

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The coronavirus pandemic could mean 1.2 billion fewer airline passengers worldwide by September, the International Civil Aviation Organization said. The "most substantial reduction in passenger numbers," the UN agency said in a statement, "is expected to be in Europe, especially during its peak summer travel season, followed by the Asia-Pacific." Airline capacity could also be significantly slashed, it said, resulting in a drop in airline revenues in the first nine months of the year by as much as USD160 billion to USD253 billion.

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BROKER RATING CHANGES

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MORGAN STANLEY RAISES RYANAIR TO 'OVERWEIGHT' (EQUAL-WEIGHT) - PRICE TARGET 13 (17) EUR

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JPMORGAN RAISES FEVERTREE DRINKS PRICE TARGET TO 1260 (1050) PENCE - 'NEUTRAL'

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JEFFERIES RAISES FEVERTREE PRICE TARGET TO 1500 (1200) PENCE - 'HOLD'

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GOLDMAN SACHS CUTS FEVERTREE PRICE TARGET TO 1180 (1210) PENCE - 'SELL'

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BARCLAYS RAISES BOOHOO PRICE TARGET TO 350 (215) PENCE - 'OVERWEIGHT'

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COMPANIES - FTSE 100

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Unilever said underlying sales growth was flat in the first quarter as it withdrew its guidance due to Covid-19. The consumer goods firm reported no underlying sales growth in the first three months of 2020, with volumes up 0.2% but prices down 0.2%. Developed markets underlying sales growth was 2.8% but emerging markets sales declined 1.8%. On a reported basis, quarterly turnover was up 0.2% to EUR12.44 billion. Unilever said Covid-19 has led to "extensive changes" in the operating environment in its markets. Most major markets, outside China, saw normal sales patterns in January and February with Covid-19 hitting in March. Lockdowns have seen little out-of-home consumption of ice cream and food, the firm said, but initial household stocking of both hygiene and food products led to increased volume in some markets.

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Vodafone said it has raised EUR400 million via the placing of 41.7 million shares in Infrastrutture Wireless Italiane. The shares, representing 4.3% of the Italian mobile towers owner's share capital, were sold at EUR9.60 each. Vodafone said the proceeds will be used to reduced leverage. As a result of this transaction, Vodafone and TIM's ownership will decrease from 37.5% each to 33.2%, retaining joint control.

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Anglo American maintained its 2020 copper guidance despite seeing a drop in first quarter production, as the miner struggled to cope with the lockdowns seen across the world to combat the Covid-19 pandemic. In the three months to March 31, the miner's copper production slipped 9% year-on-year to 147,100 tonnes from 161,100 tonnes in the same period the year before. Diamond production in the first quarter from Anglo's De Beers was 1% lower at 7.8 million carats. Anglo produced 441,000 ounces of platinum in the first quarter, 7% lower year-on-year. Palladium output in the quarter fell 7% to 303,000 ounces.

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Compass said it will not be recommending an interim or final dividend for its financial year ending September due to the "exceptional circumstances" brought about by Covid-19. The contract caterer for travel and events said that around 55% of its business is currently closed due to lockdowns, and it is "working hard" to protect cash flow. Net capital expenditure in the first half was around GBP400 million, and Compass expects spending to be lower in the second half. Compass has put in place an additional revolving credit facility of GBP800 million and also said it has qualified for the Bank of England's Covid Corporate Financing Facility and drew down GBP600 million in March. The firm does not expect to pay out a dividend this year due to Covid-19.

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Meggitt said trading in the first quarter was ahead of a year ago, but in the last few weeks it has started to see a "softening" in its civil aerospace business. Revenue was up 5% on an organic basis in the first quarter, with strong growth in defence more than offsetting a weaker performance in civil aerospace and energy. To mitigate any weakening in demand due to Covid-19, Meggitt has reduced variable costs and has cut the size of its workforce by 15%. It will freeze all new hiring, cut operation costs and remove annual salary increases. The implementation of these measures will reduce cash expenditure levels by around GBP400 million to GBP450 million in 2020. Looking ahead, Meggitt said it is "too early" to give forward guidance.

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COMPANIES - FTSE 250

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Computacenter said first quarter trading was "pleasing" given current conditions, adding that its full-year expectations remain unchanged. First-quarter revenue was down slightly on a year ago, but profitability remained in line. "Current trading has been more robust than we anticipated at the start of this crisis. There has been a marked difference in need from customer to customer dependent upon which sector their business is in. There has been a surge in demand from many of our customers to enable business continuity particularly around homeworking and network resilience," the IT services firm said. In order to preserve cash, Computacenter will no longer propose a final dividend at its annual general meeting. "Given the factors on the business, mentioned above, we are confident in the short-term outlook and the board believes that the pre-tax profit performance in the first half of 2020 will be broadly in-line with, or slightly ahead of, that of the first half of 2019. The second half of the year is more difficult to predict but currently our full year expectations remain unchanged," Computacenter said.

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COMPANIES - INTERNATIONAL

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Credit Suisse reported double-digit income growth in the first quarter of 2020 despite a challenging market environment. The Zurich-headquartered lender and wealth manager said pretax income rose 13% year-on-year in the three months to the end of March to CHF1.20 billion, about USD1.24 billion. Net revenue grew by 7% to CHF5.78 billion from CHF5.39 billion a year ago. Credit Suisse highlighted that improved performance was achieved notwithstanding the Covid-19 pandemic and the resultant volatile market environment. The bank recorded net new assets of CHF5.8 billion in the first quarter, but its assets under management decreased by CHF100 billion to CHF1.4 trillion at the end of the quarter compared to the previous quarter, driven by unfavourable market and foreign exchange-related movements.

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Thursday's Shareholder Meetings

RELX

CRH

Alumasc Group (re capital reorganisation)

N4 Pharma

AFC Energy

CLS Holdings

Aggreko

Croda International

Blencowe Resources (re reverse takeover)

Meggitt

Taylor Wimpey

Tullow Oil

Alliance Trust

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By Tom Waite; thomaslwaite@alliancenews.com

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