Good morning and welcome to the IC’s daily blog, rounding up the biggest business stories.
News rolled in across the Atlantic yesterday afternoon that Johnson & Johnson (US:JNJ; Buy, 11 Mar 2021) would pause the roll-out of its Covid-19 vaccine because of an “extremely rare” blood clotting disorder. The US regulators are reviewing data linked to six reported US cases out of almost 7m administered.
The hiatus follows on from the decision last week in the UK to offer under-30s an alternative jab to the Oxford university/ AstraZeneca (AZN: Buy, 11 Feb 2021) injection, amid concerns here too about the suspected, but extremely rare, side-effect of blood clotting.
Westminster still plans for every adult to be invited for a first jab by the end of July. But the vaccination saga has been far from straightforward and the wider roll-out is now racing against the reopening of the economy - and, in time, the resumption of travel. Diagnostics will therefore remain a vital component of the pandemic response. Helpfully, as we explore this week, UK shores have yielded a strong contingent of testing companies large and small.
That said, in better news for AstraZeneca this morning, its Tagrisso drug has been approved in China for the treatment of a type of early-stage lung cancer.
Meanwhile, FTSE 100 grocery retailer Tesco (TSCO) posted annual numbers this morning, with revenues broadly flat at £57.9bn and pre-tax profits down a fifth to £825m. The group expects a strong recovery in profitability and retail free cash flow this year, it said, as most of the extra pandemic costs incurred last year won’t repeat. Read our results analysis here.
Elsewhere in the supermarket world, Vesa Equity Investment - led by investors Daniel Křetínský and Patrik Tkáč - said yesterday afternoon that it had raised its stake in J Sainsbury (SBRY: ) to 9.99 per cent. The move reaffirms Vesa’s long-term interest in buying “strategic minority participations” in food retail Plcs.
As an essential business, Tesco has been better-placed than clothing and homeware companies that were forced to pull down the shutters under lockdown rules – only able to reopen on 12 April. As many experienced, the closure of physical space inspired a surge in online shopping.
But despite its high-street locations being off-limits for months, JD Sports (JD: Buy, 13 Apr 2021) raised its guidance this week, on the back of robust trading – helped by its extensive scale, international reach and strong online operation.
And in the travel world, easyJet’s (EZY) said today that it expected first half losses to be slightly better than expected, helped by a “disciplined flying programme” over the winter and significant cost savings. Last month Oliver Telling explored what the three things were stopping airline shares from taking off.
Read our take on all this morning’s stop stories in our blog below.
