Admiral suspending special dividend, UK Commercial Property slashes quarterly payment

Stocks to watch

Insurance group Admiral said it would suspend a special dividend of 20.7p a share but stick with its final payout, citing a strong solvency position. Regulators last month pressed companies to pull dividends to save cash to mitigate the impact of the coronavirus pandemic.

Ashtead said it would have free cash flow under all downside scenarios during the Covid-19 crisis despite the virus having an impact on its business. The industrial equipment rental company said it had modelled various outcomes for the coming year with business much lower than so far in 2020. "Under all these scenarios the group remains free cash flow positive throughout the next financial year" and well above a minimum available liquidity of $460m under a covenant threshold. Ashtead said it expected underlying pre tax profit for the year ending 30 April to be about £1.05bn, up from £947m a year earlier.

UK Commercial Property REIT said on Monday that it had decided to still pay a quarterly dividend, but at a reduced rate of 50%, equaling 0.46p per share. The FTSE 250 real estate investment trust said that to date, it had received 68% of advance rent payments for the second quarter, which was still above industry average but placed “great emphasis” on the need to exercise prudence. It said it had a “robust, lowly geared” balance sheet, with “significant” financial resources available of £154m.

Newspaper round-up

The government must set out its lockdown exit plans to restore confidence among British businesses that have become increasingly bleak about the economy’s future, a leading employers’ group has warned. The Institute of Directors said its 28,000 members were “clamouring” for information so they could start drawing up return-to-work plans. Jon Geldart, its director general, said it was in everyone’s interests to kickstart the economy again once it is safe to do so. - Guardian

It will take the UK economy three years to fully recover from the fallout of the coronavirus pandemic, according to a leading forecasting group. As the damage for jobs and growth unfolds, the EY Item Club said it would take until 2023 for the economy to return to the level reached at the end of last year due to the depth of the crisis. – Guardian

The number of customers allowed in shops will be limited and browsers will be kept apart with markings on the floor under reopening guidelines for when the lockdown is lifted. Guidance from the British Retail Consortium (BRC) outlines measures that will be taken to keep staff and consumers safe. – Telegraph

The tottering travel industry has been plunged into a fresh crisis after ministers discussed plans for a 14-day quarantine for tourists and overseas business travellers. Hoteliers and airlines already reeling from global shutdowns and a collapse in demand could be hammered by the decision, which is likely to discourage swathes of holidaymakers from going abroad and shut out millions of tourists who would otherwise come to Britain. – Telegraph

The John Lewis Partnership is exploring whether it should bring in an outside investor to help to finance and launch a joint venture that would reduce its reliance on retailing. It is also considering never reopening some of its less viable department stores after the national lockdown ends. The steps are understood to be part of radical plans by Dame Sharon White, 52, the partnership’s chairwoman, to accelerate strategic changes in response to coronavirus. All 50 John Lewis stores have been closed since the March 23 lockdown, while its Waitrose grocery stores continue to trade. – The Times

Deloitte has sounded the alarm over an increased risk of fraud in property valuations as a dearth of transactions renders valuations “subjective”. The auditor identified property valuations as the area having the “greatest potential for fraud” in its audit of the financial accounts of Capital & Regional, the listed shopping centre owner. In the Capital & Regional annual report, Deloitte noted the “significant assumptions” used in calculating valuations and said there was a risk that they could be “subject to undue influence by management”. – The Times

US close

US stocks closed higher on Friday as oil prices continued to recover from the week's historic sell-off.

At the close, the Dow Jones Industrial Average was up 1.11% at 23,775.27, while the S&P 500 was 1.39% firmer at 2,836.74 and the Nasdaq Composite saw out the session 1.65% stronger at 8,634.52.

The Dow closed 260.01 points higher on Friday, following on from a mixed performance in a volatile session a day earlier after a report from the Financial Times, which cited documents accidentally published by the World Health Organization, said Gilead Sciences' remdesivir was not effective in treating coronavirus cases as previously reported.

Gilead later claimed the study was "terminated early due to low enrolment", meaning the results were "inconclusive", while Reuters reported that a US government-led trial of remdesivir was running ahead of schedule

However, giving sentiment a boost on Friday was day three of rising oil prices, with West Texas Intermediate crude up 2.67% at $16.94 per barrel ahead of an expected cut in US production.