Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
A trading update from PPHE Hotels [LON:PPH], the owners of brands including Park Plaza, has been published this morning. Understandably the impact of COVID-19 has hit the business hard, with the vast majority of its portfolio now closed after a good start to the year. However the company states it is well capitalised and can withstand a continued and significant decrease in business across its markets during 2020. It’s perhaps worth highlighting the impact of government support for companies of scale like this – payroll assistance including the UK furlough scheme is worth £3m a month – equal to 60% of the current reduced payroll – whilst the business rates holiday in the UK is worth £1.4m a month.
Insurer Hastings [LON:HSTG] has published its Q1 trading update today. The sharp decline in car usage during the COVID-19 crisis has resulted in a marked reduction in the frequencies of motor accidents during March and this is something that the company expects to continue so long as restrictions remain in place. However price pressures are said to be mounting, with disruption to repair networks and lack of parts seen as being a risk as the country comes out the other side of this challenge. The company has no business lines which are set to be exposed by claims against the pandemic, but does add that mid-term policy adjustments as consumers tighten belts could be a challenge.
Final results from 888 Group [LON:888], the online gambling company, covering the year to December 31st have been published. Group revenues were reported as being up by 6%, but perhaps most notable in the outlook is the company’s stance over the impact of COIVD-19 leaving a lot of customers with a lot of free time. Managing the risk of gambling related harm, rather than the potential spike in revenues, stands out in the report – and understandably so. With governments globally staging unprecedented levels of intervention to maintain livelihoods, the entire online gambling industry needs to do its bit to ensure such stimulus doesn’t look like a direct transfer of wealth from Treasuries to their shareholders.
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