- UK retail sales make partial recovery
- Suez Canal remains blocked
- US lawmakers grill big tech bosses again
- Kaz Minerals bid reaches £4bn
Vaccine saga rumbles on
The EU vaccine saga continued on Thursday, as European leaders discussed jab supplies at a virtual summit.
The reportedly tense talks followed on from weeks of attempts to ensure that shots from AstraZeneca (AZN) and other coronavirus vaccine suppliers are distributed to those member states most in need of supplies.
AstraZeneca has been locked in a debate with the EU over accusations that it has failed to meet its supply targets.
The UK and the EU said this week that they were committed to moving towards a “win-win situation and expand vaccine supply for all our citizens”. But questions remain about whether AstraZeneca has become a victim of vaccine nationalism.
The Anglo-Swedish group yesterday revised its Covid-19 vaccine efficacy rate to 76 per cent from 79 per cent in its US trials, following concerns that the data in its initial report at the start of this week could have been misleading.
Retail sales partially recover
Retail sales volumes only partially recovered last month, rising 2.1 per cent compared with a fall of 8.2 per cent in January. Sales remained down 3.7 per cent against the same period in 2020 – before the pandemic took hold.
Perhaps unsurprisingly, clothing retailers posted the largest fall, dropping more than a half. Automotive fuel stores also posted a decline of more than a quarter because of travel restrictions hitting sales.
One of the many upshots of the closure of retail stores globally is that higher-end luxury brands have accelerated their shift online, embracing multi-brand websites such as Net-a-Port and spurring a spate of investments in the digital luxury realm.
The coronavirus crisis has also seen mega sportswear brands Nike (NYSE:NKE) and Adidas (ETR:ADS) pick up the pace on their shifts towards web and direct-to-consumer sales, which could have implications for their distribution networks – including global partner and FTSE 100 company JD Sports (JD.).
‘Ever Given’ crisis continues
The enormous ‘Ever Given’ container ship is still wedged across the Suez Canal, with more than 200 vessels now reportedly queuing up at either end of the key transit route.
Shipping information expert Lloyd’s List Intelligence counted 63 bulk carriers, 28 crude tankers and 41 containerships, among others, among the vessels waiting to traverse the Suez as of 9am yesterday morning.
More than a tenth of global trade passes along the Canal, which links Asia with Europe. Irrespective of how quickly the grounded Ever Given is re-floated, the disaster arguably raises questions about what the other choke points could be in international supply chains.
Related: Retailers on the hook for ports logjam
Big Tech vs US Congress: Round 2
The CEOs of big tech faced the House of Representatives again last night, this time facing questions on their role in the riots on Capitol Hill and coronavirus misinformation. Both Democrats and Republicans interrogated the heads of Google (US:GOOGL), Facebook (US:FB) and Twitter (US:TWTR) in a five-hour hearing, fuelling support for tougher regulation of the tech industry.
“The power of this technology is awesome and terrifying”, said Michael Doyle, a Democratic representative from Pennsylavaina. “You can take down this content, you can reduce division, you can fix this - but you choose not to.”
Facebook head Mark Zuckerberg denied that his company was responsible for the attacks on the Capitol earlier this year, but backed reform of Section 230 - legal protections from the 90s that protect online platforms from liability of third-party content.
Social media must change if it wants to survive and keep its users safe. But what happens to engagement if you strip out controversial content?
Amazon (US:AMZN) may have escaped the hearing in Washington DC - but the e-commerce giant was arguing with the Supreme Court in Texas, saying that it is “not realistic” for it to vet all of the products sold on its platform. The court will decide whether Amazon is liable for the injury of a toddler, after she swallowed a remote control battery that was purchased on its website.
Companies news: TT Electronics boost, Kaz Minerals offer tops £4bn
TT Electronics buoyed by Covid screening update
A ‘rapid Covid-19 screening device’ for which TT Electronics (TTG) has been named exclusive manufacturing partner has received use and sale registration from the British medicines regulator. However, the financial implications for TT remain uncertain.
The announcement this morning followed an update from TT on Thursday afternoon, in which the group noted a jump in its share price and said the device – ‘Virolens’ – could be nearing a greenlight. Virolens was conceived by start-up company iAbra.
But TT couched its statements cautiously. Revenues from Virolens “are dependent on iAbra’s potential end customers in Great Britain converting expressions of interest into firm orders”. Moreover, “a high proportion of the commercial interest in Virolens to date has been outside of Great Britain”, requiring further regulatory approvals.
TT, which aims to “solve electronic challenges for a sustainable world”, believes Covid screening can complement vaccination programmes. Irrespective of the outcome for Virolens, chief executive Richard Tyson told Investors’ Chronicle earlier this month that the product “is not a bad example of what our strategy has enabled us to do”. “We’re able to bring together capabilities from across TT to help them design their screening device”.
Read more:
Kaz offer increased
With copper riding at 10 year highs, investors in Kaz Minerals (KAZ) were probably justified in holding out for a better offer. Well that has now materialised after the consortium seeking to take the company over, which already holds nearly 40 per cent of shares and is headed by chairman Oleg Novachuk, upped its offer to 869p a share in total (including a special dividend). Their initial offer, back in October, was worth 640p a share.
Smiths beats consensus
Smiths (SMI) has revealed interim figures ahead of consensus expectations, with 5 per cent growth in underlying post-tax profits achieved despite a commensurate fall in revenue. Trading has continued to improve since the 31 January cut-off, while improvements in operational efficiencies are reflected in a 33 per cent increase in the cash-conversion rate. ROCE, though predictably down on its pre-pandemic comparator, remained healthy at 11.2 per cent. And the group’s medical arm has seen strengthening performance ahead of its separation in the fourth quarter of FY2021. The board felt able to recommend an interim dividend of 11.7p a share, payable on 14 May. MR
Aviva ends disposal spree with Poland exit
Life insurer Aviva (AV.) has completed “the planned refocus” of its portfolio with the sale of its Polish arm for €2.5bn (£2.14bn) in cash, its eighth disposal in eight months.
The divestment brings total cash proceeds from chief Amanda Blanc’s strategy to £7.5bn, just shy of the entire market value assigned to the group when the shares traded at their steepest discount to book value last May.
The deal – struck at an impressive 130 per cent premium to Solvency II own funds – will also allow Aviva to concentrate solely on what Blanc sees as the group’s strongest franchises in the UK, Ireland and Canada. Debt will also be reduced and Aviva plans to make “a substantial return of capital to shareholders””.
Despite the narrower focus, the sale’s premium to carrying value translates to a 10 per cent increase in pro-forma net asset value per share, to 493p. The strategy, together with the (supportive) rise in bond yields, has been warmly received by investors, who have bid up the shares to 403p. AN
Read how Aviva's disposal programme has reshaped its debt profile.
Renew dives deeper into water sector with £29.5m acquisition
Engineering services specialist Renew Holdings (RNWH: Buy, 4 Sep 2020) says that trading for the six months to 31 March has been in line with expectations, with no material impact from the latest national lockdown.
The group has also struck an agreement to acquire water-focused engineering business J Browne for £29.5m. Operating in the South of England with a number of long-term framework agreements, the purchase is expected to immediately enhance Renew’s earnings, providing a high single digit boost to annual EPS.
Analysts have bumped up their forecasts, with Peel Hunt now anticipating EPS of 45.1p in 2021 and 52.5p in 2022, up from 43.1p and 48.2p, respectively. NK
