(Alliance News) - easyJet said Monday that, as a result of "unprecedented" travel restrictions imposed by governments in response to the new coronavirus pandemic and the implementation of national lockdowns across many European countries, it has fully grounded its entire fleet of aircraft.
Airlines have taken a hit as countries around the globe close their borders and ordered citizens to stay at home as much as possible to help contain the virus spread.
easyJet said that at this stage there can be no certainty of the date for restarting commercial flights and will continuously evaluate the situation based on regulations and demand.
"We continue to take every action to remove cost and non-critical expenditure from the business at every level in order to help mitigate the impact from the coronavirus. The grounding of aircraft removes significant cost," the company said.
The carrier stressed that it maintains a strong balance sheet, with no debt re-financings due until 2022.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called down 0.4% at 5,495.40
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Hang Seng: down 0.8% at 23,293.70
Nikkei 225: closed down 1.6% at 19,084.97
DJIA: closed down 915.39 points, 4.1%, at 21,636.78
S&P 500: closed down 3.4% at 2,541.47
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GBP: down at USD1.2385 (USD1.2427)
EUR: unchanged at USD1.1070 (USD1.1071)
Gold: down at USD1,616.37 per ounce (USD1,626.20)
Oil (Brent): up at USD23.50 a barrel (USD25.03)
(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 BST UK money and credit
1100 CEST EU business & consumer surveys
1400 CEST Germany provisional consumer price index
1000 EDT US pending home sales index
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Boris Johnson has 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 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. The 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. Harries said the three-week reviews on the measures to slow the disease's spread are likely to continue for six months and their success would be judged on slowing its rate. A sudden lifting, she said, could see the nation's sacrifices "wasted" with another spike in deaths, which have reached 1,228.
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Fitch Ratings on Friday downgraded the UK sovereign debt rating a notch and lowered the outlook to negative, citing the "significant weakening" of public finances and damage to the economy from the coronavirus pandemic. "The coronavirus outbreak has inflicted an unprecedented shock on financial markets and economic activity, with policymakers struggling to avert a longer-lasting downturn," Fitch said in a statement. In addition, lingering uncertainty over Brexit and the "uncertainty around the future trade relationship with the EU could constrain the strength of the post-crisis economic recovery". Fitch estimated the British economy could contract by 4% this year due to the nationwide shutdowns implemented to halt the spread of the virus, followed by a sharp recovery in 2021.
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BROKER RATING CHANGES
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BERNSTEIN CUTS SMITH & NEPHEW TO 'MARKET-PERFORM' (OUTPERFORM) - TARGET 1530 PENCE
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UBS RAISES BT GROUP TO 'NEUTRAL' (SELL) - PRICE TARGET 120 (140) PENCE
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BERENBERG RAISES CARNIVAL PLC TO 'HOLD' ('SELL') - TARGET 1180 (3200) PENCE
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COMPANIES - FTSE 100
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Smith & Nephew said it has withdrawn prior financial guidance issued in February due to the rapid expansion of the virus beyond China since then and will not issue any 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 2019 level of 22.8%. In 2018, trading margin stood at 22.9%. "Overall it is too early to determine the consequent impact of the Covid-19 pandemic on our business. In China, elective [surgical] procedures have restarted, but currently remain considerably below pre-outbreak levels. In Europe and the US a range of policy responses are now being implemented, including stopping all but the most urgent surgical procedures. It is difficult to determine how long the situation will last, the speed of normalisation thereafter, and the timing of catch-up of postponed procedures," the company said. 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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Johnson Matthey said strategic progress for the financial year, which ends on Tuesday, has been good, but was unable to provide any outlook due to the coronavirus pandemic. The platinum and speciality chemicals company said that it currently expects to take a hit of around GBP50 million on trading performance from Covid-19. This was due to a combination of reduced demand in its Clean Air business, which serves the auto industry, and around GBP20 million of delayed shipments caused by logistics challenges across other businesses, Johnson Matthey said. As a result, the company now expects to deliver group operating performance below current market expectations. In financial 2019, Johnson Matthey reported operating profit of GBP531 million. Johnson Matthey said it has a strong balance sheet and good access to liquidity with substantial cash resources and significant undrawn bank facilities. The company will report annual results on May 28.
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Anglo American said travel restrictions mean its De Beers unit will not be able to host its third sales event of 2020. The miner said travel curbs will prevent both products, and customers in South Africa, Botswana and India from travelling to the event. Anglo American added: "De Beers Group is enabling sightholders to defer 100% of their Sight 3 allocations to later in the year, and will continue to seek innovative ways to meet sightholders' rough diamond supply needs in the coming weeks." In the second De Beers rough diamond auction of the year, sales totalled USD335 million, a 28% fall from USD496 million reported for the same cycle the year before, and down 36% from USD555 million for the first cycle of 2020.
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UK lenders are seeking regulatory approval to loosen repayment rules for credit cards to help customers cope during the coronavirus crisis, the Financial Times reported. According to the newspaper, banks have asked the UK Financial Conduct Authority to waive the current regulatory requirement that customers make a minimum repayment each month. The banks are expecting to reach an arrangement to postpone credit card bills of customers by up to three months, it said. Credit card issuers will still be able to charge interest and fees during the payment holiday, and the total debt would still have to be repaid by consumers, the FT reported. The banks also plan to ensure credit ratings of customers are not affected if they miss payments.
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COMPANIES - FTSE 250
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FirstGroup said it has signed a Direct Award with the UK Department of Transport, extending its contract to run the Great Western Railway until March 31, 2023, with an option for a further one-year extension.
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Monday's Shareholder Meetings
Aston Martin Lagonda Global Holdings (re rights issue)
Smithson Investment Trust
Temple Bar Investment Trust
M&G Credit Income Investment Trust
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By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.
Smith & Nephew (SN.)
Carnival (CCL)
BT (BT.A)
easyJet (EZJ)