Marston's unlikely to pay dividend, Micro Focus scraps distribution

Stocks to watch

Marston's said it was unlikely to pay a dividend this year as it tried to save cash and protect its balance sheet from the impact of the coronavirus and government advice for people to avoid pubs and restaurants. The company on Wednesday said it expected to reduce full year guidance, adding that for the 24 weeks to March 14 like-for-like sales in its pubs were 1% below last year. “Although recent trading has been impacted by Covid-19, this has been marginal to date and pub like-for-like sales have been broadly flat over the last two weeks. That said, we anticipate that the government's advice will result in significantly lower sales in the coming weeks,” Marston's said in a statement.

Micro Focus said it had not seen any material impact from the coronavirus outbreak but that it was scrapping its final dividend to prepare for any potential fallout. “As a minimum we believe it appropriate to be prepared for a level of disruption to our new sales activity even though the majority of our revenues are contractual and recurring in nature,” it said. “As a result, we think it is right to approach the next twelve months with a reduced risk appetite and heightened sense of caution.”

Oxford Instruments said that, given the current uncertainty from Covid-19 and the impact on trading, it was issuing its pre-close for the 2020 financial year earlier than usual. It said the “severe disruption” as a result of the Covid-19 coronavirus had impacted its customers, with a number of product shipments and installations in the final quarter of the financial year being delayed, in addition to an enforced site closure in California. While it was seeing some re-opening of customer sites in China, the situation in Europe and North America was said to be deteriorating, and as a result, it currently expected adjusted operating profit for the full year of between £47m and £50m.

Newspaper round-up

Britain’s banks have revealed how they are going to implement Rishi Sunak’s promise of “payment holidays” of up to three months. In guidance issued after the chancellor pledged mortgage support for households affected by the coronavirus, UK Finance, the trade body for the major banks, set out how households can apply. – Guardian

UK manufacturers such as Vauxhall and Airbus are planning to 3D-print parts for ventilators to treat coronavirus patients, as part of a “wartime” effort to build thousands of medical devices that will be overseen by a management consultancy. More than 60 companies began responding on Tuesday to a request from Boris Johnson, made during a conference call on Monday evening, to help produce 20,000 ventilators in as little as two weeks. – Guardian

Britain’s biggest business group has criticised Boris Johnson’s handling of the latest coronavirus containment measures after he advised the public to avoid under-pressure pubs, restaurants and theatres. The Confederation of British Industry’s chief economist said the Government’s announcement on Monday afternoon had placed “the burden of responsibility very late in the day” on small businesses. The prime minister advised the public to avoid such businesses but did not force them to close. – Telegraph

Softbank Group could back away from its planned bailout of Wework because of the regulatory investigations into the office sharing company. Investigations into Wework’s business by the US Securities and Exchange Commission and Justice Department may be a dealbreaker for the Japanese technology conglomerate, which agreed to buy $3 billion of Wework shares from existing investors last year, according to the Wall Street Journal. – The Times

US close

Wall Street stocks recorded some solid gains on Tuesday as the US looked to recover from the carnage seen in the previous session.

At the close, the Dow Jones Industrial Average was up 5.20% at 21,237.38, while the S&P 500 was 6.00% firmer at 2,529.19 and the Nasdaq Composite saw out the session 6.23% stronger at 7,334.78.

The Dow closed 1,048.86 points higher on Monday as stocks recorded some gains following its third-worst day ever in the previous session after the President said the US "may be" moving headfirst into a recession.

The upward moves came after Donald Trump tweeted: "The United States will be powerfully supporting those industries, like Airlines and others, that are particularly affected by the Chinese Virus. We will be stronger than ever before!" However, Trump also warned that the crisis could stretch as far as August, noting that the White House could potentially be looking at locking down "certain areas".

The Federal Reserve announced measures to help companies struggling to get short-term funding as a result of the outbreak, while investors also cheered plans that indicated the White House could inject $1trn into the US economy to cushion the blow of the coronavirus.