Level 2

Weekly review

By Josh White

Date: Thursday 09 Apr 2020

(Sharecast News) - The FTSE 100 ended the week up 427.16 points at 5,842.66.
Equity view

Paddy Power owner Flutter said its final dividend would be paid out in shares rather than cash as it sought to bolster its finances in the face of the Covid-19 pandemic.

Rail and coach travel platform Trainline announced a series of cost-cutting measures on Thursday and said its executive team will take a pay cut amid a decline in passenger numbers due to the Covid-19 outbreak.

Diageo said it would pay its interim dividend as planned but the drinks company put its ?4.5bn share buyback on hold as Covid-19 restrictions took a significant toll on its business.

Paper and packaging maker Mondi pulled its dividend and cut capital expenditure by up to €200m as plant closures forced by the coronavirus crisis hit production.

Housebuilder Redrow said on Thursday that it is eligible for access to ?300m funding from the government's Covid Corporate Financing Facility and that it has furloughed 80% of its staff due to the outbreak.

Building materials company Grafton said on Wednesday that its chief executive and chief financial officers have volunteered to take a pay cut amid the coronavirus outbreak.

Packaging maker DS Smith scrapped its interim dividend but reported strong demand from its consumer goods unit as panic buying swamped supermarkets due to the Covid-19 crisis.

Hiscox joined fellow insurers Aviva, RSA and Direct Line on Wednesday as it cancelled its final dividend due to the coronavirus outbreak.

Information group Relx withdrew full-year guidance as the coronavirus pandemic hammered its exhibitions business.

Robert Walters said it expected difficult trading after fees fell in the first quarter as the Covid-19 crisis hit recruitment in the UK and other markets.

Home repair company Homeserve said it expected to deliver profits ahead of expectations as it maintained a full workforce during the coronavirus crisis.

Inchcape updated the market on the ongoing impact of the Covid-19 coronavirus pandemic on Tuesday, confirming the cancellation of its previously-announced final dividend.

Vistry Group announced on Tuesday that its Vistry Partnerships division has exchanged contracts with the non-departmental government body Homes England on a portfolio of six developments that will provide more than 570 new homes across the country.

Victrex said on Tuesday that trading in the first has been in line with expectations but that it is too early to provide guidance for the rest of the year amid the coronavirus pandemic.

Promotional merchandise company 4imprint issued a further update on the effect of the Covid-19 coronavirus pandemic on Tuesday, cancelling its final dividend and withdrawing its guidance as order numbers fell even further.

WH Smith said on Monday that it has secured new lending facilities of ?120m that are conditional on raising new equity.

Sage Group scrapped its ?250m share buyback as the accounting software company predicted the Covid-19 crisis would hit revenue growth in the second half of the financial year.

Bodycote said on Monday that first-quarter trading has not been "significantly" impacted by the Covid-19 pandemic but that its proposed final dividend is under review given current uncertainty.

Petrofac pulled its final dividend and withdrew its guidance on Monday as it said it was cutting its personnel by 20% and furloughing staff due to the coronavirus pandemic.

Smiths Group said trading was increasingly affected by the Covid-19 crisis as the engineering company reported a 6% increase in operating profit.

Economic news

The government is expected to extend its Covid-19 lockdown beyond next week but the announcement is likely to be put on hold until after the long Easter weekend, raising concerns that warm weather could tempt people to defy restrictions.

The Bank of England has agreed to directly finance extra spending imposed on the government by the Covid-19 crisis, allowing the Treasury to raise short-term funds outside the bond market.

The UK economy shrank in February even before the full effects of the Covid-19 pandemic began to hit businesses and consumers, official figures showed.

RICS called for a stamp duty holiday to restart the UK housing market as its monthly survey showed confidence and activity plunging as a result of the Covid-19 crisis.

The Commons has opened an inquiry into potential asset-stripping of UK high-tech firms on Wednesday.

Airlines are lobbying to amend the recently agreed carbon scheme designed to bring down the aviation sector's emissions as the Covid-19 coronavirus crisis makes it harder for carriers to meet their agreed targets.

UK company earnings were in a prolonged earnings recession even before the Covid-19 crisis erupted, a survey showed.

UK Prime Minister Boris Johnson did not have pneumonia and was breathing without the assistance of a ventilator, a Downing Street spokesman confirmed on Tuesday.

Prime Minister Boris Johnson was moved to an intensive care unit after his coronavirus symptoms worsened on Monday, Downing Street said.

The UK construction sector suffered its worst contraction in March since April 2009 as the coronavirus pandemic took its toll, according to data released on Monday.

International events

The number of Americans filing for unemployment benefits last week was much higher than expected as the coronavirus pandemic continues to take its toll, according to figures released by the Labor Department on Thursday.

Italian Prime Minister Guiseppe Conte warned the European Union could fracture over tensions on how to deal with the coronavirus crisis as he said the current lockdown could be eased by the end of the month.

Living standards will fall in more than 170 countries in 2020 as the Covid-19 crisis causes the worst economic downturn since the Great Depression, the head of the International Monetary Fund warned.

Global trade could plummet by up to 32%, a level similar to the Great Depression of the 1930s, in the aftermath of the coronavirus pandemic, the World Trade Organisation said.

US President Donald Trump lashed out at the World Health Organization late on Tuesday over it's handling of the coronavirus pandemic and threatened to withhold US funding.

African budget airline Fastjet warned that its future was under threat unless it raised fresh capital or sold its Zimbabwe operations as jobs and salaries were cut in response to the coronavirus.

At least 25 million jobs could be at risk around the world from the slump in passenger traffic caused by the coronavirus pandemic, the airline industry body warned on Tuesday.

German industrial output unexpectedly rose in February before the Covid-19 crisis spread to Europe's biggest economy, official figures showed.

Oil prices fell by about 1% on European exchanges but pared back earlier losses as markets reacted to Opec's cancellation of a meeting with Russia about potential production cuts.

The Covid-19 coronavirus is severely impacting consumer and business behaviour and threatens to erase around $100bn in global full-year revenues from the automotive industry with UK car sales having already fallen 44.4% in the key month of March.

The European Union's probe into media giant Facebook will now focus on whether the social media network is distorting the classified advertising market by promoting its own Marketplace.


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