Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
Hoteliers IHG [LON:IHG] have issued a COVID19 update this morning. Noting that demand for accommodation is the lowest they have ever seen. Expectations are that the RevPAR – revenue per available room – figure will fall by 60% this month, although the company’s global footprint does help illustrate what lies ahead, In China last month, RevPAR fell by 90% and across the country they now have 60 hotels closed, down from a peak of 178. IHG has historically been a good dividend payer, but that’s now on hold until forward visibility has improved. With shares having lost more than 50% over the last month however, will the market have any more appetite for downside this morning?
Marks and Spencer
Marks and Spencer [LON:MKS] is also updating the market on COVID19 today. The crisis is going to be damaging for the business, but there’s confidence that some protection can be found given the company’s exposure to the food market. Whether this is sufficient to keep the company on track to hit even the bottom end of full year pre-tax profit expectations remains to be seen, but another longer term advantage the business has is the forthcoming move which will see its food distributed via Ocado from later this year. In a cash conservation move the final dividend is being suspended.
Preliminary results from JD Wetherspoons [LON:JDW] for the first half of the year, up to January 26th, have been published today. It’s been a good period, with consumer confidence at the time helping drive sales 5% higher an deliver a 20% uplift in operating profits. The impact of government guidance to avoid pubs this week is already playing out, although sales are down a modest 4.5%. The company anticipates profits for the full year being below expectations so long as the public health situation remains, although the benefit of government subsidies is likely to provide a reasonable cushion.
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