‘Spend, spend, spend’
PM pledge
British prime minster Boris Johnson has outlined how the government intends to reboot the economy in the aftermath of the Covid-19 crisis. With construction front and centre, Mr Johnson has promised to “build back better, build back greener, build back faster” via a £5bn injection this year into schools, roads, hospitals and other infrastructure projects. This stimulus is not brand new – rather, much of it is an acceleration of part of the £640bn of gross capital investment unveiled by chancellor Rishi Sunak within March’s budget.
Gilead pricing
$2,340 per patient
Gilead Sciences (US:GILD) has unveiled how much it will charge for its drug Remdesivir, which has been granted emergency use authorisation for certain hospitalised coronavirus patients. The group said the “degree of speculation” around pricing “is understandable” because Remdesivir “is the first antiviral to have demonstrated patient improvement in clinical trials for Covid-19 and there is no playbook for how to price a new medicine in a pandemic”. It will ask governments of developed countries for $390 per vial. Most patients are expected to receive a five-day treatment course using six vials, costing $2,340 altogether.
Petropavlovsk board coup
Voted out
Gold miner Petropavlovsk’s (POG) board has been voted out by new major shareholder UGC. Chief executive Pavel Maslovskiy and chairman Sir Roderic Lyne will be ousted, they have said, as the annual meeting had low enough voting levels due to Covid-19 arrangements for 22 per cent shareholder UGC, combined 12 per cent shareholders Everest Alliance and Slevin and another 4.6 per cent holder to move in their own people. Finance chief Danila Kotlyarov and incoming chairman Fiona Paulus were also removed from the board. However, Petropavlovsk was able to appoint four interim board members.
Rent woes
Q3 collections
Commercial landlords collected less than a fifth of the rent due for the third quarter, with office landlords suffering the largest decline since the March collection date. Just over 18 per cent of rent was received on 24 June, according to data compiled by commercial property management platform Re-Leased – down from 25 per cent three months earlier. The data, which is based on more than 10,000 commercial properties, showed that retail landlords collected the lowest proportion of rent due at just 14 per cent.
In-tu administration
Shares suspended
Administrators have been appointed at Intu (INTU) and shares in the shopping centre landlord have been suspended, after it failed to secure a standstill agreement with lenders. The group had amassed significant debt, and reduced rent income and plummeting asset valuations had left it in danger of breaching its covenants. Management had been attempting to garner support for a rights issue at the start of the year, but failed to gain sufficient investor interest. It had also been targeting disposals in an effort to pay down some debt, but was hindered by a lack of buyer appetite.
Mirror, mirror
$0.5bn deal
US-listed sportswear retailer Lululemon (US:LULU) is to acquire Mirror – an at-home fitness company, which makes wall-mounted interactive mirrors – for $500m (£403m). Mirror provides weekly live classes as well as on-demand workouts. The transaction follows on from an initial investment in Mirror by Lululemon midway through last year. Lululemon said the deal would further expand the content creation partnership between the two brands, while helping both businesses “reach new guests” (read: customers). ‘The Mirror’ costs $1,495. Users pay an extra $39 per month for a subscription to all of the company’s classes.
Sainsbury’s soars online
But Covid-19 profit impact
Supermarket group J Sainsbury (SBRY) saw first-quarter digital sales more than double against the same period last year. In the four weeks to 14 June, UK online grocery sales rose by 91 per cent with nearly one-in-five British households going digital, according to data from research house Kantar. But Sainsbury’s warned that the benefits of its stronger grocery sales, and the government’s business rates relief, would be offset by a £500m hit to underlying pre-tax profits driven by the coronavirus pandemic.
UK house prices were down 0.1 per cent on the previous year in June, according to the Nationwide House Price Index, the first annual fall in eight years.
The decline is yet another sign of the impact weaker consumer confidence and reduced mortgage availability has had on slowing the housing market following the pandemic.
On a quarterly basis, sales prices grew 2 per cent, led by the north-west at 4.8 per cent higher than in the same quarter in the prior year and the north at the bottom with no change.
