Ocado revenue rises amid panic buying, Auto Trader to defer client payments

Stocks to watch

Online retailer Ocado reported a rise in first quarter revenue and a massive increase in current orders as people stockpile food due to the coronavirus crisis. The company said revenue rose 10.3% to £441.2m, adding that it had been forced to temporarily shut down its online store, app and stop taking new customer registrations due to “unprecedented strain” on the business. “The impact of higher basket values and order demand, amid growing public concern over the Coronavirus, was limited in the quarter, although this has since picked up significantly and growth in the second quarter is so far double that of the first quarter. We expect the impact of forward buying, however, to unwind at some point,” the company said on Thursday.

Next said it could survive a £1bn sales decline representing 25% of annual turnover by conserving cash and without taking government help apart from the business rates holiday. Reporting annual results, Next said it was impossible to publish guidance for the current year because there was no way of predicting how bad the virus's impact would be on sales. Pretax profit for the year to January 2020 excluding the IFRS accounting measure rose 0.8% to £728.5m as sales increased 3.3% to £4.36bn.

Auto Trader Group issued an unscheduled trading update on Thursday, reporting that as a result of the Covid-19 coronavirus pandemic, the UK car retail market was facing “unprecedented levels” of uncertainty. The FTSE 100 vehicle marketplace provider said it had decided not to charge its retailer customers for their advertising packages during April, and would allow its customers to defer payment of their March advertising costs by 30 days, which would have an “immediate” financial impact on the company. It said its full-year results for the financial year ending 31 March would be broadly in line with market expectations, adding that during the current market conditions it could not provide guidance for 2021, but the actions it was taking would result in an operating loss for April of between £6m and £7m.

Newspaper round-up

Taxpayers would have to foot the bill if another tour operator followed Thomas Cook into insolvency, the National Audit Office has warned, after a tourism industry fund that paid out £481m to repatriate and refund holidaymakers hit by the collapse was left severely depleted. In a report on the shock demise of the 178-year-old tour operator last year, the NAO said the state had already borne £156m in costs, a figure it said was likely to rise in future. - Guardian

Britain’s automotive industry may never recover from the coronavirus crisis, experts have warned, after responsible for more than two-thirds of the UK’s annual vehicle production paused assembly lines. Honda, BMW and Toyota joined a rapidly lengthening list of carmakers halting European operations on Wednesday, Jaguar Land Rover, the UK’s largest auto firm, as the only one still operating UK plants. – Guardian

Boris Johnson said a temporary universal basic income was one of several measures under consideration to help workers left in dire financial situations by the coronavirus crisis. Universal basic income involves regular fixed payments by the state to everyone in a country with no strings attached, irrespective of their income. The idea remains controversial among economists and relatively untested outside of pilot programmes in countries such as Finland. – Telegraph

One of the big supermarkets has called on the government to relax competition law and other legislation to allow stores to work together to ensure food reaches the shelves. David Potts, chief executive of Wm Morrison, said that some of the “legislation around competition works well in peacetime, but not so well in wartime”. He said that supermarkets working together would benefit customers during the pandemic and that “competition law can act as a handbrake”. Businesses are turning to crowdfunding as a way to win support from loyal customers to help them and their staff deal with the Covid-19 pandemic. – The Times

Crowdfunder and Enterprise Nation, a small business network, have launched a service that allows companies to pre-sell products and services which can be redeemed once the crisis has ended or eased. The aim is to keep cash coming in when a business is forced to close temporarily or its trade is drastically reduced and to support staff. Crowdfunder said it would cover all platform and transaction fees of listing campaigns during the pandemic. – The Times

US close

The Dow Jones Industrials fell below the 20,000 point mark for the first time since 2017, dragged down by losses in stocks most impacted by the coronavirus pandemic such as civil aerospace and another outsized leg lower for crude oil futures.

Stocks did however manage to pare their losses towards the end of the session, helped by reports that lawmakers in Congress might announce a roughly $1.3trn stimulus package by the next day, on top of a more than $100bn of spending to finance free testing and paid sick leave announced earlier on Wednesday.

Markets were also reacting to news that the government might be open to taking equity stakes in private firms as part of an aid package.

There was also speculation that the Federal Reserve would soon ramp up its quantitative easing programme from $700bn in Treasuries and mortgage backed securities to $1.5trn.

By the end of trading, the Dow Jones Industrial Average was down 6.3% to 19,898.92, alongside a 5.18% fall on the S&P 500 to 2,398.10, while the Nasdaq Composite was off 4.70% to 6,989.84.

Weighing on the former were shares in aerospace giants Boeing and United Technologies, amid 'market chatter' of the possible need of a bail-out for the first of those two companies while at one point United Technologies was down by the most since the 11 September attacks.

The country's major auto manufacturers also announced plans to shutter plants at the request of the UAW, with Harley Davidson announcing similar plans.