TheTimes8April2020

42 2GM Wednesday April 8 2020 | the times

BusinessMarkets

news in brief

Homeserve carries on

Homeserve said that its 6,000

office workers were continuing to

work, even if that was at home,

and that the emergency

tradespeople dispatched to homes

across Europe and North

America were still completing 150

jobs an hour. Homeserve, which

sells households insurance to pay

the cost of providing plumbers

and electricians to tackle

domestic emergencies, has not

said that it will cut executive pay

or its dividend because of the

crisis. It said that its “current

decision is not to furlough or

make redundant any staff”.

Loan scheme ‘failing’

Only 1 per cent of companies

have successfully accessed the

Business Interruption Loan

Scheme and a mere 7 per cent are

receiving grants, according to the

second Business Impact Tracker

from the British Chambers of

Commerce. The lobby group’s

survey of more than 1,000

businesses also found that 57 per

cent had three months cash in

reserve, or less, while 6 per cent

had run out of cash. Many said

they did not appear to meet the

criteria for government support.

Half of rents unpaid

The largest provider of serviced

office space in London said that it

had collected only 50 per cent of

the rents it was due at the end of

March. Workspace Group, which

works with more than 3,000

businesses, said that it was having

discussions with customers on

rent deferrals on a case-by-case

basis. It added that it was in a

strong financial position

Workspace differs from other

serviced office operators, such as

Wework, because it owns the

freehold on all of its buildings.

Shoppers venture back

Warm weather over the weekend

lured shoppers back on to the

streets, despite warnings about the

importance of social distancing.

Shopper visits increased by

21.3 per cent on Sunday compared

with the previous week, according

to Springboard, as temperatures

rose to their highest this year. In

London footfall jumped by

51.4 per cent. The rise comes after

high street shopper visits tumbled

by 75.1 per cent the week after the

lockdown began and by another

81.4 per cent last week.

Commodities

ICIS pricing (London 7.30pm)

Crude Oils ($/barrel FOB)

Brent Physical 23.33 -1.01

BFOE(Jun) 31.94 -1.20

BFOE(Jul) 34.49 -0.50

WTI(Jun) 28.69 -1.29

WTI(Jul) 31.84 -0.20

Products ($/MT)

Spot CIF NW Europe (prompt delivery)

Premium Unld 264.00 265.00 +9.00

Gasoil EEC 290.00 292.00 +4.25

3.5 Fuel Oil 142.00 146.00 +0.50

Naphtha 200.00 203.00 -8.00

ICE Futures

Gas Oil

Apr 303.50-294.25 Jul 330.25-329.75

May 304.75-304.50 Aug 339.75-339.25

Jun 318.25-317.75 Volume: 647526

Brent (9.00pm)

Jun 32.51-32.50 Sep 37.54-37.51

Jul 35.02-35.00 Oct 38.24-38.10

Aug 36.56-36.52 Volume: 1777401

LIFFE

Cocoa

May 1912-1908 Jul unq

Jul 1848-1847 Sep unq

Sep 1805-1797 Dec unq

Dec 1725-1716

Mar unq

May unq Volume: 76791

RobustaCoffee

May 1208-1207 Jan 1365-1270

Jul 1235-1232 Mar unq

Sep 1250-1249

Nov 1269-1257 Volume: 19534

White Sugar (FOB)

Reuters Dec 327.40-319.10

Mar unq

May 329.40-328.80 May unq

Aug 325.10-324.60 Aug unq

Oct 317.70-317.20 Volume: 49753

PRICES

Major indices

New York
Dow Jones 22653.86 (-26.13)

Nasdaq Composite 7887.26 (-25.98)
S&P 500 2659.41 (-4.27)

Tokyo
Nikkei 225 18950.18 (+373.88)

Hong Kong
Hang Seng 24253.29 (+504.17)

Amsterdam

AEX Index 499.85 (+10.03)

Sydney
AO 5301.30 (-22.30)

Frankfurt
DAX 10356.70 (+281.53)

Singapore

Straits 2571.89 (+101.30)

Brussels

BEL20 3033.57 (+63.78)

Paris
CAC-40 4438.27 (+92.14)

Zurich

SMI Index 9514.60 (+52.26)

DJ EURO Stoxx 50 2857.67 (+61.70)

London

FTSE 100 5704.45 (+122.06)

FTSE 250 15568.96 (+756.60)

FTSE 350 3181.01 (+82.31)

FTSE Eurotop 100 2494.69 (+31.99)

FTSE All-Shares 3141.28 (+82.43)

FTSE Non Financials 3798.87 (+81.38)

techMARK 100 4641.64 (+120.60)

Bargains n/a

US$ 1.2338 (+0.0101)

Euro 1.1317 (-0.0012)

£:SDR 0.98 (+0.00)

Exchange Index 77.70 (+0.03)

Bank of England official close (4pm)

CPI 108.63 Feb (2015 = 100)

RPI 292.00 Feb (Jan 1987 = 100)

RPIX 292.60 Feb (Jan 1987 = 100)

Morningstar Long Commodity 427.49 (+3.09)

Morningstar Long/Short Commod 3951.37 (-1.34)

London Financial Futures

Period Open High Low Sett Vol Open Int

Long Gilt Jun 20 136.13 136.52 135.53 135.80 213735 417204

Sep 20 134.88

3-Mth Sterling Jun 20 99.530 99.535 99.450 99.470 80245 561116

Sep 20 99.655 99.660 99.605 99.620 46786 484722

Dec 20 99.665 99.670 99.620 99.635 30821 455727

Mar 21

Jun 21

3-Mth Euribor Jun 20 100.30 100.30 100.23 100.24 196276 512550

Sep 20 100.35 100.35 100.30 100.31 128303 406742

Dec 20 100.38 100.38 100.34 100.35 123889 369236

Mar 21

Jun 21

3-Mth Euroswiss Jun 20 100.65 100.65 100.61 100.63 5463 41475

Sep 20 100.69 100.69 100.66 100.67 3517 42386

Dec 20 100.71 100.71 100.67 100.68 3752 33731

Mar 21

FTSE100 Jun 20 5665.5 5772.0 5561.0 5677.0 120852 697715

Sep 20 5641.0 5734.5 5641.0 5663.0 648 2263

FTSEurofirst 80 Jun 20 3878.5

Sep 20 3873.5

© 2019 Tradeweb Markets LLC. All rights reserved.

The Tradeweb FTSE Gilt Closing Prices information contained

herein is proprietary to Tradeweb; may not be copied or

re-distributed; is not warranted to be accurate, complete or timely; and does not constitute

investment advice. Tradeweb is not responsible for any loss or damage that might result

from the use of this information.

London in 2017. It is based in France,

but the majority of its operations are

in Camberley, Surrey. Novacyt had

been reporting higher orders at its

Lab21 unit, which specialises in using

antibodies to detect diseases in blood

or serum.

Until it negotiated a loan facility

and sold off assets last year, it had a

shortage of working capital, which

left it unable to fulfil some orders

and as a result 2019’s annual profits

before tax and other items will be

lower than the previous year’s

€600,000. Formal annual results are

due this month. Its Covid-19 test is

not only establishing Novacyt’s

reputation, it is also going to provide

it with the capital it needs to expand

March had orders totalling more

than £17.8 million. The test has had

fast-track approval in countries

including the United Stattes,

Argentina and France and Novacyt

is supplying more than 20 hospitals

in the UK. The Anglo-French group

is struggling to keep up with orders

and has agreed production deals,

including with companies in Britain

and Germany.

Novacyt was founded in France in

2006 by a medical pathologist who

developed diagnostics tools for use in

cancer screening and oncology. After

acquisitions, including of

Primerdesign — a company spun out

of the University of Southampton —

it was listed in France in 2012 and in

P

unters have ploughed into

Novacyt in the hope that its

tests for coronavirus will mean

that the business takes off. Shares in

the biotechnology company, which is

listed on Aim in London and on the

Paris division of the Euronext

exchange, are up by nearly 1,270 per

cent since January, when it first

started to talk about its test.

Initially available only for research

purposes, the group is now selling its

high-speed diagnostics kit to more

than 80 countries and as of late

Miles Costello Tempus

Buy, sell or hold: today’s best share tips

Offering some defence to uncertainty

T

he onset of the coronavirus

pandemic has concentrated

minds in the healthcare

and pharmaceuticals sector,

where the race is on to

develop quick and accurate tests and,

all importantly, a vaccine. This, in

turn, has turned the spotlight on to

the world’s four big vaccine

developers: Merck and Pfizer, of the

United States, Sanofi, in France, and

the London-listed Glaxosmithkline.

Between them, they account for

about 85 per cent of a worldwide

vaccines market worth $35 billion,

according to analysts at Bernstein.

Glaxo is the biggest of them all,

based on the percentage of its

revenues, at 21 per cent, that come

from such treatments— and it might

be tempting to conclude that Glaxo’s

vaccines business is looking a little

more valuable from an investment

perspective right now (it was rapidly

growing even before the group began

to undertake its initiatives relating to

Covid-19). However, healthcare

groups have made clear that they do

not see finding a vaccine for the virus

as a profit-making opportunity.

In fact, this has become one of

those rare, if striking, examples of

companies in a fiercely competitive

sector coming together to form

partnerships and to work with

governments, as well as, in this case,

funding procedures being developed

by some of the world’s smaller

players.

Glaxosmithkline traces its history

back to 1715 and an apothecary in

London, but it was created in its

present form in 2000 with the

merger of Glaxo Wellcome and

Smithkline Beecham. It operates in

more than 150 countries, employs

over 100,000 people and its annual

sales last year were just under

£35.8 billion. The group is divided

into three businesses: the biggest by

turnover is pharmaceuticals,

followed by consumer healthcare

and vaccines. Finding successful

vaccine treatments is by far the most

profitable.

Glaxo is planning to split itself into

two. After a deal two years ago with

Pfizer, it will create one consumer

healthcare business, with brands

including Nicorette, Panadol and

Sensodyne, and one

biopharmaceuticals company,

concentrating on immunology and

genetics, with a heavy emphasis on

research and development to bring

new drugs to the market. As things

Recovery play

Source: Refinitiv

Turnover Operating profits

Share price

2019 2020

1,300

1,400

1,500

1,600

1,700

1,800

1,900p

Q3Q2 Q4 Q1

Performance breakdown

Turnover

£33.8bn

Group

Pre-tax profits

£6.2n

£17.6bn

£4.6bn

Divisions

£7.2bn

£3bn

Vaccines

£9bn

£1.9bn

Consumer healthcare

stand, Covid-19 hasn’t interrupted

this process, which will take about

two years to complete and, although

expensive, will considerably reduce

the indebtedness of the pharma

company. Much of the borrowings,

which have concerned analysts

previously, will be transferred to the

far more cash-generative consumer

business.

Nor has it forced Glaxo to cut or

defer its dividend. In February it

declared a final payment of 23p,

making for an annual dividend of

80p a share, which it plans to repeat

this year.

The group has made several forays

into coronavirus vaccines. As well as

a technology-based collaboration

with Cepi, a vaccines partnership,

Glaxo is working with Clover

Pharmaceuticals, a Chinese

company. This week it detailed a

$250 million investment in Vir

Biotechnology, an American group,

as part of a co-operation designed to

speed up the use of antibodies in

vaccines.

Aside from the virus, Glaxo looks

very strong, with world-leading

respiratory and HIV treatments and

a healthy medicines pipeline,

including in vaccines. And, assuming

that it goes ahead, the separation

should create considerable additional

value for shareholders.

The shares, up 5½p, or 0.4 per cent,

at £15.14¾ yesterday, have held up

relatively well in recent weeks.

Trading at 16 times earnings for a

yield of about 4.5 per cent, they are

an attractive defensive move.

ADVICE Buy

WHY Top-tier player in its

chosen markets, well

positioned for health trends

and split should add value

its diagnostics business, through

further acquisitions as needs be.

Novacyt has plenty of potential

and its role in identifying Covid-19

cases is enhancing its credibility, but

with no earnings per share to speak

of and no dividend, its share price —

off 2p, or 0.9 per cent, at 215p

yesterday — is built on optimism and

not profits. This columnist is happy

to witness investors’ excitement, but

is not advising others to join in.

ADVICE Avoid

WHY Huge potential but as yet

not enough substance

glaxosmithkline

Market value

£75.9bn

PE ratio 16x

Div yield c4.5%

novacyt

Market value

£148m

Revenues €13.1m

Cash €1.8m