GDP plummets on restrictions
UK gross domestic product declined by 19.8 per cent between April and June, according to revised estimates from the Office for National Statistics, the largest quarterly contraction since quarterly records began. The reduction marks the second consecutive quarterly decline after a fall of a revised 2.5 per cent during the first three months of the year. There were record falls in services, production and construction output during the period, which have been particularly prevalent in those industries that have been most exposed to government restrictions.
Card Factory folds into loss
CEO search underway
Card Factory (CARD) slipped into a half-year pre-tax loss of £22.2m, as the coronavirus pandemic almost halved the card shop’s half-year revenues. Turnover fell to £100.5m after Card Factory’s 1,018 UK and Irish stores spent a large part of the period closed, leaving the company unable to tap into typically lucrative celebrations including Easter, Mother’s and Father’s Day. Online and multichannel sales did, however, rise 64 per cent during the period. Card Factory continues to look for a chief executive to replace Karen Hubbard, who stepped away from the company in June.
Nokia in with BT
Huawei replaced
Finnish telecoms firm Nokia (FI:NOKIA) has agreed to provide BT’s (BT.A) 5G equipment, making it its largest infrastructure partner and replacing the role of Chinese company Huawei in British networks. BT’s chief executive Philip Jansen said in a statement that it was “critical” that the company made the right technology choices in a fast-moving market. In July, the UK government said that mobile network operators would not be able to buy equipment from Huawei after the end of this year. Nokia will also provide its equipment and services to BT’s radio sites across the country.
CMA sides with water companies
Hope for UK energy?
The Competition and Markets Authority (CMA) has provisionally ruled in favour of the four private water companies challenging Ofwat’s latest five-year price controls. While the regulator announced last year that allowed returns would be slashed to their lowest level since privatisation, the CMA believes the allowed return on capital should be increased from 1.96 per cent to 2.57 per cent. There would be no immediate impact on the listed players – Pennon (PNN), Severn Trent (SVT) and United Utilities (UU.) have agreed their final determinations through to 2025. But it could affect decision-making for future price controls and influence energy regulator Ofgem, which is also looking to drastically cut allowed returns.
Testing deal inked
Novacyt surges
Diagnostics is at the forefront of health authority planning these days. Novacyt (NCYT) an Aim-traded specialist in the field, saw its share price hit an all-time high on news that it has signed a second major contract with the UK Department of Health and Social Care (DHSC) for its Covid-19 testing equipment. The deal includes the initial supply of the company’s polymerase chain reaction instruments for up to six months, with a minimum contract value of £150m for the first 14 weeks, and with the possibility of another £100m over the following 10-week period. A second phase supply agreement is also in prospect, albeit at the discretion of the DHSC.
Change at Landsec
CFO to depart
Land Securities (LAND) chief financial officer Martin Greenslade informed the board of his intention to step down from the position this year. Mr Greenslade has been in the role since 2005 and will continue in his role and on the board while a successor is found. The commercial landlord announced in July that it would resume dividend payments following the release of half-year results next month, despite rent collection standing at just 60 per cent of that due. In another real estate management switch, Hammerson (HMSO) has appointed Rita-Rose Gagné as chief executive, replacing David Atkins before the end of the year.
HSBC rebounds
Ping An ups stake
HSBC's (HSBA) shares rallied 10 per cent on the day the Asia-focused lender’s largest shareholder, Ping An Asset Management, increased its stake in the bank to 8 per cent, from 7.95 per cent. The purchase came after HSBC sank to a 25-year low after being named in the so-called “FinCEN files” – leaks published by the International Consortium of Investigative Journalists, which alleged that some of the biggest names in international banking allowed criminals and fraudsters to move dirty money across the globe. Sentiment towards the shares has also taken a hit as relations between the US and UK and China remain frosty.
The average UK house price rose to a record level in September, up 0.9 per cent on the prior month, according to Nationwide’s house price index.
However, that monthly growth rate was lower than the 2 per cent rise enjoyed in August.
The stamp duty break and pent-up demand have driven the surge in house market activity but research by the lender also found that almost a fifth of people that had been considering a move before the pandemic have put their plans on hold, with more than a quarter citing concerns around the health of the property market.
