Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
Hotel Chocolat [LON:HOTC] has published a business update this morning, looking to reassure investors. The COVID lockdown has had a real impact on the company’s distribution model, but cashflow is being carefully managed and the pivot towards direct consumer sales appears to have been well executed. Whilst warehouse distribution capacity was constrained by social distancing requirements, in the run up to Easter, online demand outstripped supply. The note adds that one of the credit lines in place prevents the business from paying dividends so long as it remains in place.
Tate & Lyle
There’s a trading update for April which has been issued by Tate & Lyle [LON:TATE], highlighting some significant changes in demand patterns as the business responds to the ongoing COVID-19 crisis. Stockpiling by consumers saw demand for shelf stable goods spike in the early part of the month, but bulk sweetener volumes fell 26% as a result of collapsing out-of-home sales. The company notes that it’s quick action in controlling costs back in March helped bolster its financial position, and that the business has access to over $1 billion worth of cash. The share price has already recovered to levels of six months ago, with full year results due on May 21st.
Technical plastics specialists Carclo [LON:CAR] have published a full year trading statement today. The company has an interesting spread of customers given the current climate, being active in both Aerospace and Healthcare. The former is clearly looking at an uncertain future and the company has already responded with a range of initiatives here. Most sites have been kept operational through the lockdown, although the adoption of social distancing guidelines will have an impact on profitability and the company is unable to offer any guidance on its future performance.
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