Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
At the request of the FCA, companies are currently delaying the publication of full year accounts. One such entity is the AA [LON:AA], who have filled the gap with a trading update which highlights a solid performance over the last 12 months. Revenues are marginally higher, retention for breakdown cover stands at 80%, key B2B contracts have been maintained and profits have more than doubled. The company is managing well through the COVID-19 crisis so far, although acknowledges the uncertainty that may come off the back of this, with changes in discretionary consumer spending habits presumably a key risk.
St Mowden Properties
St Mowden Properties [LON:SMP] has published a note regarding its response to the COVID-19 situation and when it comes to public perception, it’s difficult not to see them as having done the “right thing”. One third of the company’s staff have been furloughed on the government scheme, with the business topping up the salary deficit. Directors have taken a 20% pay cut and the dividend payment due on April 3rd has been suspended.
Engineering group Smiths [LON:SMIN] were also due to publish interims this week but have instead opted for a trading update. Good growth has been seen in the first half of the year, but COVID-19 does present problems for the company both in terms of demand as well as supply. Sites accounting for 90% of manufacturing capacity are currently open, but infection control measures mean these are running below maximum output. Low oil prices are impacting capex with some customers too, but on a more optimistic note, the company has contracted with the UK government to ramp up production of its paraPAC plus™ ventilator.
Sign up for three quick facts and more with our Free Daily Digest newsletter, every weekday morning.