Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
WM Morrison Supermarkets
Full year results have been published by WM Morrison [LON:MRW] this morning, with like for like sales struggling to advance although this was against strong comparatives the previous year. Earnings per share also advanced and although one point which may jump out is the fact the dividend will be lower, this is a defensive move to ensure cash reserves remain strong. Whilst COVID19 is bolstering sales right now, one point that is absolutely worth applauding is that the retailer has committed to paying small suppliers immediately as they work through what will undoubtedly be a challenging time.
There’s a slew of corporate updates relating to COVID19 out this morning and insufficient time to wade through them all, but from those I have seen, Marston’s [LON:MARS] deserve credit for providing some granularity over its likely dividend outlook. Given social restrictions are likely to be in place for several months, they are cautioning that it’s unlikely an interim dividend will be recommended in May. Another factoid is the company own 93% of its pubs on a freehold basis, which again provides some valuable insurance in the uncertain times that lie ahead.
The Restaurant Group
Another organisation to be commended on its attempt to provide some detail in light of COVID19 is The Restaurant Group [LON:RTN]. They have started making assumptions over business performance for the year, looking at a 45% fall in like for like sales in the first half, a 92% decline in sales at airport concessions over the second quarter and a 10 week shut down across at least part of the business. The company notes that its approach will leave a £75m cash buffer for the remainder of the year, with each further month of shut down beyond the 10 weeks already noted costing a further £15m.
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