Compass Group issues coronavirus profit warning, Centrica replaces chairman

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Food services company Compass Group said interim operating profit could fall by up to £225m due to the coronavirus. “We are implementing significant mitigation plans to manage our costs, and at this stage expect the drop-through impact of the lost revenue to be between 25%-30% across the business.”

Centrica has replaced its chairman and appointed its chief financial officer as interim chief executive of the struggling energy provider. The FTSE 100 company said Charles Berry would step down as chairman immediately and be replaced by Scott Wheway, who has been acting chairman since February. Berry has been on medical leave and has quit on doctors' orders to reduce his workload. Centrica also said CFO Chris O'Shea would become CEO on an interim basis, replacing Iain Conn, who in July announced plans to leave. The company said its search for a replacement CEO was continuing.

Travelex owner Finablr said it was making rapid plans for a potential insolvency appointment after the company revealed it had issued $100m (£81m) worth of undisclosed cheques, announced a larger-than-expected financial blow from the coronavirus outbreak and its chief executive quit on Monday.

Anglo American announced the temporary withdrawal of the majority of employees and contractors from its Quellaveco copper project in Peru on Tuesday, following the government’s announcement of a 15-day national quarantine to curb the spread of the Covid-19 coronavirus. The FTSE 100 mining giant said that as a result, construction work on the project would be “significantly slowed”, with only critical areas of the project continuing as normal, until workers could safely return. At previous forecasts, the Quellaveco copper project was expected to begin production in 2022, with an expected capital cost of between $5bn (£4.08bn) and $5.3bn.

Newspaper round-up

Energy companies have started preparing emergency plans to cope with coronavirus disruption, including the possibility of operating with only a fifth of their usual staff numbers. The UK’s regional energy networks held talks last week with government ministers, senior officials and the energy regulator over plans to maintain the energy system’s power lines and gas pipes if 80% of their staff are unable to work. – Guardian

Embattled lender Metro Bank has been hit with a fresh lawsuit by a group of Iranian customers who say their accounts were unfairly suspended without notice or explanation. The group of 17 claimants, who are expected to seek at least £1.5m in damages, include dual British-Iranian citizens, Iranian citizens living in the UK and several UK-based businesses including an engineering firm and a consultancy. – Guardian

Rishi Sunak is expected to set out details of a major new bail-out scheme for businesses today as Wall Street suffered its biggest crash since the 1987 Black Monday sell-off last night. The Chancellor will front up the Government’s response to the escalating coronavirus pandemic by making clear that the Government will offer a bigger bail-out fund for companies. – Telegraph

Most of the world’s airlines will be insolvent within ten weeks and governments grappling with the impact of the coronavirus pandemic are not acting together to save the aviation industry. That is the warning from a leading aviation consultancy as it emerged that US airlines are asking for $50 billion of assistance from the American government and the UK’s flag carrier British Airways is grounding 75 percent of its fleet over the next two months. – The Times

The American economy will shrink by 5 per cent in the second quarter after flatlining in the first as the coronavirus pandemic prompts a sharp slowdown, Goldman Sachs has predicted. The bank slashed its US growth forecast as a domestic manufacturing index posted its largest month-on-month decline on record and its lowest reading since March 2009. – The Times

US close

US stocks recorded heavy losses on Monday after Wall Street trading was halted on when stocks hit "limit down" despite the Federal Reserve launching an extensive monetary stimulus campaign at the weekend aimed at curbing slower economic growth amid the fallout from the Covid-19 outbreak.

At the close, the Dow Jones Industrial Average was down 12.93% at 20,188.52, while the S&P 500 was 11.98% lower at 2,386.13 and the Nasdaq Composite saw out the session 12.32% weaker at 6,904.59.

The Dow closed 2,997.10 points lower on Monday, giving back all of Friday's gains and recording its third-worst day ever after the President said the US "may be" moving headfirst into a recession.

The SPY ETF, which tracks the S&P 500, plummeted 9% in pre-market trading, triggering a "circuit breaker" at the open which saw trading halted for 15 minutes. Dow Jones and Nasdaq ETFs were also down 8%.

The Federal Reserve cut interest rates to between 0.00% and 0.25% on Sunday as it announced the launch of a $700bn stimulus programme to help counter the impact of the coronavirus pandemic.

The Fed said in a statement: "The coronavirus outbreak has harmed communities and disrupted economic activity in many countries, including the United States.

"The effects of the coronavirus will weigh on economic activity in the near-term and pose risks to the economic outlook.

"The Committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goal."