Dixons Carphone puts divi on ice, Capco suspends buybacks
The FTSE 100 is expected to open 133 points lower on Thursday, having closed up 4.45% at 5,688.20 on Wednesday.
Stocks to watch
Electrical retailer Dixons Carphone reported a 24% fall in like-for-like sales growth in the UK in the three weeks to March 21 as it pulled guidance and placed its final dividend on review as the coronavirus pandemic hit trading. With stores now shut as a result of a government imposed lockdown, Dixons was looking to online operations to mitigate the costs, but “overall the loss of sales will adversely impact our full year profitability and cash position, therefore we will not achieve our previous guidance for current year adjusted profit before tax of £210m or for net debt to be lower year-on-year”.
British Land has cancelled its dividend, waived £3m of rents from smaller tenants and halted work at big developments in response to the Covid-19 crisis.
Capital & Counties announced on Thursday that it was temporarily suspending its share buyback programme and will defer some rental payments due to the Covid-19 outbreak, as it said it is still too early to assess the full impact on rental income and property valuations. The company said the majority of retail and food and beverage units on the Covent Garden estate are shut temporarily and while government support measures will be helpful for many occupiers, disruption to income is expected during the course of this year.
Gordon Brown has urged world leaders to create a temporary form of global government to tackle the twin medical and economic crises caused by the Covid-19 pandemic. The former Labour prime minister, who was at the centre of the international efforts to tackle the impact of the near-meltdown of the banks in 2008, said there was a need for a task force involving world leaders, health experts and the heads of the international organisations that would have executive powers to coordinate the response. – Guardian
Dyson, along with a separate consortium of manufacturers led by Airbus, is expecting the government to give it the green light to start making up to 30,000 medical ventilators from next week, after finalising plans to supply thousands of devices to help the NHS fight Covid-19. The proposals differ, with the Airbus-led Ventilator Challenge UK consortium planning to scale up production of existing models and also expected to win backing from Westminster. – Guardian
Retail stalwart Primark has refused to pay its rent bill as it seeks more support from its landlords in a sign of the chaos sweeping the high street. The firm is scrambling to save cash after being forced to shut all of its stores at a cost of £650m a month in lost sales. A host of firms are thought to have refused to pay rent on Wednesday, the day when quarterly bills are due for a huge number of retail players. That Primark is among them despite being one of the most resilient names in the industry shows the huge pressure firms are under. – Telegraph
Government measures to protect workers and businesses hit by the coronavirus pandemic will save almost 900,000 jobs, assuming that there is a recession as deep as the 2008 financial crisis, a leading consultancy has claimed. Capital Economics, which has warned that the economy may shrink by an unprecedented 15 per cent in the three months to June, compared with a peak-to-trough fall of 6 per cent 11 years ago, expects about 700,000 jobs to be lost as unemployment jumps from 3.9 per cent to 6 per cent. – The Times
The government and the banking industry are being urged to revisit the terms of emergency coronavirus loans after some directors were told that they would be personally liable for bank debts underwritten by the taxpayer. The business department is to talk with lenders to discuss how this burden could be lightened after a backlash over the onerous terms being asked of the owners of small companies. – The Times
Stocks on Wall Street finished mostly higher by the close on Wednesday, with Boeing among the leading risers, after reports that lawmakers had agreed on a $2trn economic relief bill that included measures aimed specifically at the aerospace and defence engineer.
The Dow Jones Industrial Average ended the session up 2.39% at 21,200,55 and the S&P 500 added 1.15% to 2,475.56, while the Nasdaq Composite slipped 0.45% to 7,384.30.
According to Chris Beauchamp, chief market analyst at IG, with the US stimulus bill set to pass, investors could now be less pessimistic about the short-term economic outlook - but not optimistic.
“Former Fed chairman Ben Bernanke is right in that the current crisis is more like a natural disaster than the 2008 financial crisis, which might mean a faster recovery, but the flow of bad economic data will be replaced in due course by disappointing earnings figures,” Beauchamp said.
“Only some heroic assumptions on future guidance can rescue what promises to be a dark earnings season, with all the attendant downside for stocks that this implies.”