UK businesses take £30bn in financial aid since pandemic start

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UK companies have claimed £30bn of lifeline cash from shareholders since mid-March, issuing equity and debt in an attempt to survive the pandemic. 

The Telegraph reported that around 150 businesses turned to stock and bond markets to raise further cash as the coronavirus crisis sqeezed their pockets, according to analysis by New Financial and BNP Paribas.

Premier Inn owner Whitbread, J D Wetherspoon and catering giant Compass were among those raising further cash from shareholders.

Meanwhile, the Treasury has continued to unveil aid for private businesses which can’t turn to the stock market for help.

However, while the help ensured businesses could stay alive, investors have missed out on dividends as shareholder payments were slashed by a significant number of businesses. Dividend cuts and deferrals during the coronavirus crisis have rocketed past £30bn, according to A J Bell.

Following a slump to its lowest level in more than eight years in March, the FTSE 100 rallied 20% as countries all over the world started responding to the crisis. 

Morning update

Premier Foods has announced it intends to redeem £80m of its £210m outstanding notes due in July 2022. 

“This partial redemption signifies further evidence of the group’s increasing momentum and is clear demonstration of its cash generating characteristics,” the company explained.

After redeming the notes, the company expects to save £4m a year in interest costs. It will then continue on its deleveraging path.

The group’s £300m senior secured fixed rate notes due in October 2023 and £176.6m committed revolving credit facility with its lending bank group are unchanged.

Just Eat Takeaway.com has issued an additional 5,840 shares pursuant to various employee share and option plans.

The delivery company now has 148.7m shares in issue.

The FTSE 100 opened up 2.1% at 6,117.21pts.

Early risers included Marks & Spencer up 5.5% at 99.74p, Associated British foods up 4.4% at 1,753p, WH Smith up 3.9% at 1,000p and SSP Group up 3.8% at 255.50p.

Fallers saw Hilton Food Group open down 2.3% at 1,260p, Hotel Chocolat down 1.7% at 290p and Marston’s down 3% at 64.05p.

This week in the City

This short week will again be a quiet one in the city, with retail businesses preparing to come out of lockdown. 

Wednesday sees the publication of Britvic’s interim results while Coca Cola European Partners holds its AGM.