Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
There’s a trading update out from UK motor retailer and service venues Lookers [LON:LOOK] this morning, following the reopening of car dealerships at the start of the week. Although the COVID-19 shut down hit the business hard, by mid-May new protocols had been established that allowed for contactless sales of vehicles. This meant that in the last two weeks, the company took orders for 2,865 cars, which is an impressive 51% of the number sold in the same period a year ago. The company continues to streamline its operations and will be making 1,500 staff redundant, generating a £50m payroll saving. There’s too much uncertainty for the business to provide any guidance but again this is a sector where it seems inevitable that some wholesale change will be needed.
There’s a trading update out from Adnams [NEX:ADB] this morning, but this gives little away. The licensed trade has typically been hit hard by COVID-19 and this seems like no exception. 90% of staff have been furloughed and even though sales on the internet and to supermarkets have been many times above historic levels, the company notes that this won’t offset the downside from on-sales. There’s optimism over the future, but at the same time an acceptance that half year results will show a substantial loss.
Pennon [LON:PNN], the owners of South West Water and – for now anyway – Viridor – have published full year results this morning. The steady revenues streams from the water business provide certainty for shareholders, who are on course to receive a 43.77p per share dividend. Impacts from the COVID-19 crisis have been limited, shifting some demand from corporate to retail customers and expectations of bad debts are limited with a £9m provision being made. With the company sitting on £1.6billion worth of liquidity, this isn’t a cause for concern and last night, shares surged to within a few pence of their February, pre-COVID highs.
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