A number of UK aerospace, retail and hospitality companies warned of a slump in profits Monday as they counted the cost of the country's final COVID-19 lockdown, which goes into effect this Thursday.
Under the new restrictions, restaurants, pubs, entertainment venues and non-essential businesses in England will have to close by December 2nd, despite Cabinet Secretary Michael Gove saying the restrictions could extend beyond that date.
Read: England faces a new lockdown as UK virus cases top 1 million
Chancellor Rishi Sunak has extended the government's vacation program for the duration of the lockdown, giving grants of up to £ 3,000 per month to companies forced to close their doors.
Adam Marshall, Director General of the UK Chambers of Commerce, said the new Restrictions will be a "devastating blow" to companies that have done everything in their power to adapt and operate safely.
"Business and market confidence has been severely damaged by the unclear stop-start approach by governments across the UK over the past eight months, with no end in sight," said Marshall.
Read: How the Great British Pub is tumbling under the new COVID-19 rules
"Many companies are in a much weaker position right now than they were at the start of the pandemic, making it far more difficult to weather prolonged closures or demand restraints," he added.
His comments came as Ryanair
said Monday that it was an "extremely challenging" winter as governments across Europe imposed travel restrictions to contain the spread of the virus.
Associated British Food
Apparel retailer Primark's owner said he estimated he would lose £ 375 million ($ 484 million) in sales by temporarily closing its stores in key markets due to COVID-19 restrictions.
Helen Dickinson, executive director of the British Retail Consortium, said retailers are "facing a nightmare before Christmas" as the government proposes to close thousands of retail stores under this new national lockdown and give customers access to many of their favorite stores and brands to refuse.
"It will do immeasurable damage to Main Street in the run up to Christmas, cost countless jobs and hold back economic recovery permanently, with minimal impact on virus transmission," said Dickinson.
Now GVC Holdings
The Ladbrokes Coral betting group owner warned on Monday of a £ 43 million hit for profit from its gambling businesses.
However, shares in Ocado
It rose 6% on Monday as earnings outlook improved and investors saw greater demand for online groceries due to the new lockdown measures. Gear4Music
was also in demand, rising more than 8% as sales were strong as the stuck at home turned to musical instruments to keep them busy.
"It is clear that investors are scouring the market for lockdown winners and pouring lockdown losers," said Russ Mold, investment director at AJ Bell.
“Supermarkets will be in demand again
Gossip that large queues had already formed over the weekend. Sales could
Improvement for this sector in the coming month, but probably costs too
higher as organizations are likely to reintroduce measures to keep customers safe
Crowds under control, ”he added.
A pre-tax loss of EUR 197 million ($ 253 million) was posted for the first six months to the end of September, compared to a profit of EUR 1.15 billion for the same period last year. Passenger numbers fell by 80% to 17 million from 85.7 million in 2019.
Ryanair shares traded 2.92% higher on Monday morning. Shares in the International Airlines Group
British Airways owners fell 1% while easyJet
were 0.59% lower.
Michael Hewson, chief market analyst for CMC Markets UK, said the outlook for the travel sector was already increasingly bleak without the weekend news of further tightening of restrictions in the UK.
"While politicians raised hopes of easing restrictions in early December, the reality is we could go far beyond that, and it seems that the slowdown is already beginning for such an outcome," Hewson said.
Read: Heathrow boss hopes for Thanksgiving on the London-New York Air Bridge
The entire Ryanair fleet was suspended from mid-March to the end of June due to coronavirus measures.
The airline said the second half of the year will continue to be "an enormous challenge" as it maintained its forecast of 38 million passengers this fiscal year. However, these guidelines could be revised downwards if European governments continue to "poorly manage and impose air travel" on more uncoordinated travel restrictions or bans this winter. "
Susannah Streeter, senior investment and market analyst at Hargreaves Lansdown, said Ryanair's decline into loss had shown how dramatically the COVID crisis had reversed the fate of airlines.
“The company sees a glimmer of hope through the stormy clouds for next summer and expects a sharp increase in passenger numbers, but that could still be wishful thinking. A combination of vaccine and track and trace tests could prevent a third wave in the next year. However, if this is just the start of a trend of rising infections and repeated restrictions, the company will struggle to get out of the crisis, "Streeter said.
Read: Heathrow offers quick one-hour COVID-19 tests – they're not cheap
Ryanair's revenue fell in the six months to September from EUR 5.3 billion in the previous year to EUR 1.1 billion. The airline announced that its cost base was reduced 67% in the first half to EUR 1.35 billion and it expects to receive its first Boeing
737 Max 200 aircraft in early 2021, 30 of which will be in service before the midsummer season of 2021.
At the end of September 2020, Ryanair had a cash on hand of 4.5 billion euros.
Read: Ryanair increases share placement by EUR 400 million
"If we look beyond the COVID-19 crisis and bring effective vaccines to market in early 2021, the Ryanair Group expects a lower cost base, a stronger balance sheet that will allow it to fund lower fares and add new lower-cost planes, to take advantage of the many growth opportunities that will be available in all markets across Europe, ”the airline said in a statement.