EasyJet Flies to Cash (seat belt signs remain on)

Monday, 6 April: We will keep it as light-hearted as possible whilst trying not to tell you anything you already haven’t heard 1,000 times today. The FTSE settled on Friday with further losses, typical given how long a weekend is in the current climate. Fortunately, late on this weekend there have been some encouraging signs in Europe that some of the worst affected countries are perhaps past their peak. Some countries have even began dialogue with the possibility of loosening restrictions if current trends continue. This gave markets a little lease of life today, with optimism shining as brightly as the sun seems to enjoy these days now we’re unable to make the most of it. Through the trading session the FTSE, along with other major indices, secured healthy gains to finish 3% higher.

Unfortunately, we know it will continue to get worse before it gets better, both in socially and in terms of business. Consumer confidence dropped at its largest rate ever recorded last month and new car registrations fell by 44% against last year, the lowest level in over two decades.

One of the latest high-profile casualties is Debenhams whom have filed for administration for the second time in a year. They had never really recovered from long-standing wounds and this move is seen by management as the most damage limiting route, with hopes they will be able to resume trading once the Government allows. Trading online will continue but nevertheless thousands of staff are left in further doubt.

It was Rolls Royce who topped the FTSE 100 index today after suspending their final dividend and scrapping guidance. A sentence that usually would never go together but if any year was one for making unlikely duos happen its 2020. With the small shoots of optimism investors sought after the shares that had been dumped in recent weeks, with the more stable shares actually losing out today like Tesco, Sainsburys, BP and Reckitt.

Elsewhere Babcock shares were lifted 7% after they secured a new deal with the government for 10,000 new ventilators. Biffa also provided the market with an update today, little of which was a shock. They have begun furloughing staff, management have taken 20% wage cuts and they have suspended FY21 bonuses. All of which are sensible measures and again, nothing investors didn’t expect more hoped would happen but shares were unable to find any reversal in fortunes and fell a further 2.5% today.

Ok, so NMC shares have had a shocker and that was before the current crisis. Since their shares have actually been suspended throughout you could argue (rather pointlessly) that they’ve not done half bad last month in relative terms. Well today they were informed that Abu Dhabi Commercial bank has asked for administrators to be appointed for the healthcare firm. A rather rare scenario seeing such a huge company fall dramatically from grace in this fashion.

Sage group have lowered guidance and cancelled buybacks in once again, fitting and sensible measures seen widely across the market at present. Shares ended +1.6% today.

EasyJet today said that this week they will have £2.3bn in cash available to them as they pursue maximum liquidity, fully utilising most options. Their owner has warned they could run out of cash in the lockdown is prolonged and seeks to cancel a €4.5bn Airbus order to ensure they avoid this. The airline’s shares jumped 16% today.

There was plenty more news-flow, most of which is almost self-explanatory for a lot of firms and simply listing it all out would be as upbeat a read as a James Milner memoir. Until tomorrow, stay safe and stop putting houses on Park Lane and Mayfair in Monopoly, have some heart.   

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