Britvic defers interim dividend, British Land portfolio value falls 10pc
London open
The FTSE 100 is expected to open 34 points higher on Wednesday, having closed up 1.24% at 6,067.76 on Tuesday.
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Britvic deferred its interim dividend as it weighed the impact of the coronavirus pandemic, which it said was hitting profits at around £12m - £18m a month. The maker of Robinsons fruit juice said the largest impacts had been seen in Great Britain and Ireland due to government lockdowns, but added that stress testing of debt covenants did not indicate any potential breaches up to March next year.
Auto Trader Group announced fresh support for its customers on Wednesday, following new guidance from the UK government around vehicle retail amid the ongoing Covid-19 coronavirus crisis. The FTSE 100 company noted that on Monday, the government confirmed that vehicle retailers in England would be permitted to reopen from 1 June. It said that for those retailers in England resuming trading, it would extend its recent discount scheme, providing a 25% discount for the month of June.
The value of British Land's property portfolio fell 10% in the last financial year pushing the real estate company to a £1.1bn annual net loss as the value of its retail sites plunged. The FTSE 100 company said the value of its properties fell to £11.16bn from £12.32bn in the year to the end of March. Its IFRS loss after tax widened to £1.11bn from £320m a year earlier. The value of British Land's retail sites fell 26.1% to £3.87bn as Covid-19 factors added to existing pressures on the retail sector. The value of British Land's offices rose 2.3% to £6.77bn.
Newspaper round-up
Many retailers given the go-ahead to reopen next month will face a “fight for survival” in the coming months, as they try to restore their fortunes with tough new physical distancing and health and safety requirements, a senior retail executive has warned. Clothes shops, toy stores, electronics retailers and booksellers were on Monday given the green light to get back to business on 15 June. The date was two weeks later than most retailers had anticipated. Other high street businesses allowed to reopen on that date include indoor markets, shoe shops, tailors, auction houses and photography studios. Outdoor non-food markets and car showrooms will be allowed to open from 1 June. - Guardian
The fortunes of millions of workers are hanging in the balance as Rishi Sunak weighs up whether to axe a crucial self-employment support programme and separately prepares to block new furlough applications. A decision on whether to extend the self-employment income support scheme (SEISS) beyond May is expected to be made within days - and a sudden stop to the grant is still on the table, according to sources close to the discussions. – Telegraph
Boohoo came under attack on Tuesday from a British short-seller that claimed the online retailer had exaggerated the amount of cash flowing through its books. Shares in the online fast fashion firm fell by more than 12pc after investor Shadowfall revealed it had bet on a share price fall. The stock later staged a partial recovery, ending the day 6.8pc lower at 334.9p which valued Boohoo at £4.1bn. – Telegraph
The old debate about the government picking winners in British industry has resurfaced. Ministers responsible for industrial policy during the past decade have studiously avoided the strategy, fearful of accusations of a return to the “disastrous” state interventions of the 1970s. Yet if the governments of Harold Wilson and Ted Heath had not picked some winners, there would be no Rolls-Royce to consider bailing out in 2020, none of the legacy car factories from which Jaguar Land Rover operates and no steel industry. – The Times
President Macron has launched an €8 billion plan designed to rescue the French car industry, while turning France into Europe’s biggest producer of electric and hybrid vehicles. Motor manufacturers are reeling from the pandemic, which led to an 88 per cent fall in new car sales in France last month compared with a year earlier. – The Times
US close
US stocks recorded solid gains by the close on Tuesday, as investors returned from the long Memorial Day weekend to news that pharmaceuticals firm Novavax had begun trials on a Covid-19 vaccine in Australia.
The Dow Jones Industrial Average ended the session up 2.17% at 24,995.11, the S&P 500 added 1.23% to 2,991.77, and the Nasdaq Composite managed gains of 0.17% to 9,340.22.
At the open, the Dow was 606.86 points higher, marking a change in direction from the previous session, which ended in the red as a ratcheting up of tensions between Washington and Beijing offset optimism surrounding a potential Covid-19 vaccine from biotech group Moderna Therapeutics.
While Moderna may have been the darling of the previous week, Maryland-based firm Novavax was making all the headlines on Tuesday after announcing it had started the first human study of its experimental coronavirus vaccine and that results from the trial were expected in July.
Also in focus were heightened tensions between Washington and Beijing, which seemingly escalated over the weekend when White House National Security Advisor Robert O'Brien stated the US will most likely slap sanctions on China if it chooses to go ahead with new national security laws that would grant it greater control over autonomous Hong Kong.
China's foreign minister Wang Yi denounced a move by the US government to expand an entity list of Chinese companies restricted from doing business with American firms due to alleged human rights abuses in the Xinjiang Uighur Autonomous region.
Yi claimed that political forces in Washington were pushing the two nation's toward a "new Cold War".