Airlines could need $200bn
Trade body estimate
The International Air Transport Association (IATA) has estimated that the worldwide airline industry will need between $150bn-$200bn in government support to make it through the coronavirus crisis. The trade body noted that it had, on 5 March, projected that industry revenues could take a hit of up to $113bn because of what it then thought would be the worst-case scenario – but it could not have foreseen the developments that have taken place in recent days, entailing major restrictions on travel being implemented.
New coronavirus test
Roche gets FDA nod
Roche (CH:RO) has secured an “emergency use authorisation” from the US Food and Drug Administration (FDA) for its coronavirus diagnostic kit. The Swiss pharma giant has developed a test that can determine whether a patient is positive for the virus in three-and-a-half hours using mouth and throat swabs. Designed to enable high-volume testing, the new kit is compatible with Roche’s existing ‘cobas’ analysis machines, which are widely used in laboratories and hospitals in the US and around the world. The group says it is “committed to delivering as many tests as possible and is going to the limits of our production capacity”.
Shoe Zone scraps dividend
Coronavirus victim
Shoe Zone (SHOE) has elected to defer the payment of its 8p final dividend in light of a reduction in footfall at its stores, which has been driven by the coronavirus outbreak. “Whilst the full extent of the coronavirus on the short and medium term retail environment is not yet clear,” the company said, “it is becoming ever more apparent that it will create significant disruption to people's lives and shopping habits in the coming months”. Shoe Zone intends to convene a May general meeting where shareholders will vote on cancelling the dividend.
Finablr faces possible insolvency
Shares suspended
Finablr (FIN) – owner of Travelex – is preparing for a potential insolvency. It has engaged an accounting firm “to undertake rapid contingency planning”. Finablr’s shares have been suspended. The group said on 12 March that various factors were placing major constraints on its access to daily liquidity. Those constraints have since become worse, materially impacting on its operations. Moreover, the board has been informed of the presence of cheques (written by group companies and pre-dating Finablr’s IPO) which may have been used as security for financing arrangements for the benefit of third parties. These cheques could amount to $100m.
Bill Gates steps back
Microsoft co-founder departs board
Bill Gates has announced that he is stepping down from the boards of Microsoft (US:MSFT) and Berkshire Hathaway (US:BRK.A) to dedicate more time to his philanthropic endeavours. On top of his well-established commitment to improving global health and education, Mr Gates says he is increasingly engaging with how to tackle climate change. However, he is not completely disappearing from the software giant he co-founded. Continuing in his role as technology adviser to chief executive Satya Nadella, Mr Gates is promising to “help shape the vision and achieve the company’s ambitious goals”. As he heads into quasi-retirement, almost $18bn has been wiped off his total net worth so far this year due to the coronavirus sell-off.
Centrica changes top order
Conn era ends early
Centrica’s (CNA) chief executive Iain Conn was already on his way out of the door, but his departure has been accelerated. He is stepping down with immediate effect and current chief financial officer Chris O’Shea has been promoted as an interim replacement. Under Mr Conn’s tenure, the group’s shares lost more than 80 per cent of their value and shareholders were handed a dividend cut. Centrica has been battling the UK’s energy price cap, customer switching and low natural gas prices. Adding to the changes, chairman Charles Berry has tendered his resignation, having been on medical leave since early February. He is succeeded by non-executive director Scott Wheway.
Listing rarity
Ninety One
In what is likely to prove a rare occurrence over the coming months, Investec successfully listed its asset management arm Ninety One (N91) on Monday, floating the division on the London Stock Exchange's main market. The stock – which Investec had originally hoped to sell at a price between 190p and 235p – opened at 135p, but held on to its price amid extreme volatility. Quest analyst Graham Simpson said that while the company’s dividend was too low, its ability to “generate high cash flow returns and prodigious cash flows historically is undisputable”.
The cinema industry is suffering amid the coronavirus crisis. Weekend box-office sales declined significantly over the 13-15 March weekend, and are now set to dry up completely.
Following the UK government’s advice to citizens to avoid public and crowded venues, Cineworld (CINE) and other operators have closed their sites. Cineworld said it looked forward to welcoming its customers back as soon as possible.
The group had previously warned within its full-year results that – in a worst-case, hypothetical scenario – it could be at risk of losing two-to-three months’ worth of revenues and breaching its financial covenants.
