Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
Starting with a smaller company, Chapel Down [NEX:CDGP] has published a COVID-19 trading update this morning. Government restrictions have closed bars and restaurants, whilst the company has also had to shutter many of its own outlets. However off-sales and online sales are both growing and currently doing so at a rate that would eclipse the loss of on-trade sales. If these trends continue then the company notes it will generate a stronger business in the long term with an increased market share in the area they believe will hold long term growth. Use of the government employment support package and pay cuts by directors had reinforced the company’s cash position, too. It just has to be hoped that the return to some kind of normality doesn’t take too long.
Many banks this morning have issued notes regarding their suspension of dividend payments. One standout here is Barclays [LON:BARC], which was due to pay a full year dividend of 6p per share on Friday. Critically these shares are already trading ex-div, which could lead to some interesting price action in today’s early trade as values are adjusted accordingly.
An interesting note from Big Yellow [LON:BYG], who have announced news of a new financing line with Aviva this morning. It’s a 7 year debt facility for £35m, at an all-in cost of 1.96%. Interestingly, the cost reduces to 1.91% after the company installs solar panels on three of its buildings. Not only do those rates offer an indication that cheap securitised lending is still on offer, but the green incentive is also noteworthy – after all, that’s Aviva’s shareholders taking a haircut in return for Big Yellow doing a little bit to save the planet.
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