Stocks in focus: Boohoo Group Plc, Easyjet Plc and Great Portland Estates Plc

Stocks in focus: Boohoo Group Plc, Easyjet Plc and Great Portland Estates Plc

Summary

  • Boohoo Group Plc’s major shareholder sells off 66 per cent shareholding
  • Easyjet Plc is likely to use health reports as a tool for axing jobs
  • Great Portland Estates Plc was hit by lower rent receipts for the month of June

London and European markets advanced over decreased fear of rising coronavirus cases. The UK government now plans to open swimming pools, gyms, and recreational centres from 11 July 2020. Meanwhile, the British Retail Consortium reported that in June, the shopping footfall declined 63 percent year on year. However, the footfall improved by 19 per cent as compared to May 2020. The London’s broader equity benchmark index FTSE 100 closed at 6,095.41 on Friday, up by 0.46 per cent from the previous day. In this article, we would discuss stocks which recently made the headlines for some or other reason.

Boohoo Group Plc

Aberdeen Standard Investments, which happens to be one of the Boohoo’s largest shareholders sold off nearly two-third of its shares in reaction to the media reports of poor working conditions in its garment factories in Leicester, a city in England.

Boohoo factories allegedly made its employees work in the premises, despite having corona infection. According to a report by Labour Behind the Label, clothing factories, which act as suppliers to these big brands, were operational during the national lockdown, and they did not abide by the social distancing guidelines. 

According to the garment workers' rights group, sick workers were denied pay and were forced to go to work during the national lockdown. The AIM-listed retailer, Boohoo Group (LON: BOO) is likely to carry out an investigation and would not hesitate to take the required actions. The British government has extended the national lockdown beyond 4 July in Leicester, after a recent surge in the number of Covid-19 infections. 

Aberdeen Standard Investments as an investor has lobbied with the company on improving its supply chain and working conditions several times, but the standards were not met. Therefore, Aberdeen sold shares worth £80 million on Thursday.

Boohoo Group shares nosedived by nearly 30 per cent in the last week. On Friday (10 July 2020), the shares of the fashion retailer were down by 2.31 per cent to GBX 279.50. The company received a steady number of orders which translated into a 45 per cent growth in revenue during the unprecedented crisis induced by Covid-19. The garment workers' rights group claims that to serve the sustained number of orders procured by Boohoo group, the suppliers kept the garment factories operational during the lockdown. The online multi retailers Asos, Amazon and Next have removed Boohoo’s products from their respective online platforms.

Manchester based, fashion retailer, is endorsed by well-known celebrities such as Kim Kardashian. The fashion retailer is known for its cost-effective pricing, offering products which are specifically targeted for women. The Group acquired two well-established brands, Warehouse and Oasis, in the UK for £5.25 million from Hilco Capital Limited in cash. In the coming months, BOO will be integrating both the acquired brands to its platform.

Also read: FTSE Bargains: Two Beaten Down Stocks from High-Street – BOO and BRBY

 

Easyjet Plc

The low-cost airline is planning to close operations at Stansted, Southend, and Newcastle bases due to the economic impact of the novel coronavirus. Reportedly, the company also plans to cut more than 700 jobs based on their sickness records. The company plans to make around 4,500 jobs redundant across Europe.

Easyjet Plc (LON: EZJ) is expected to commence operations on European routes by August to capitalise on the holiday season. The low-cost airline has managed to secure funds of £600 million from UK’s treasury, as a support package during these unprecedented times.

The airline group has delivered a decent increase in revenue during the first half of the financial year 2020, as stated in the trading update. The company achieves operational efficiency through operating on point-to-point routes, hence charges economical fares. During the first quarter of the financial year 2020, the company had launched easyJet holidays to lure customers and propel the company towards growth. In the short term, the revenue and profitability of the company is severely impacted due to the economic impact of the novel coronavirus.  In addition, environmental issues such as transitioning to a lesser carbon future along with increased infrastructure cost due to Covid-19, and Brexit uncertainties can take a toll on the performance of European airline.

Easyjet Plc has always had a strong balance sheet. As its revenue grew from £4,669.00 million in 2016 to £6,385.00 million in 2019, recording a CAGR (compound annual growth rate) of 11 per cent, over a period of three years. On 10 July 2020, the company’s shares closed at GBX 664.00 per share, up by 1.72 per cent from previous day closing price.

Also read: Ryanair and Easyjet Planning to Scale Up Business Operations from the Next Month

Great Portland Estates Plc

London based property investment and development company was hit by lower rent receipts for the month of June. The company managed to collect 28 per cent of rent from its retail & leisure spaces, while 74 per cent of rent contributions came from office spaces. During the quarter ended 30 June 2020, the company signed £4.3 million worth of new rent. 

Due to an on-going capital expenditure development across the Group, consolidated net debt increased to £368 million as of 30 June 2020. The company has a net cash of £90 million along with an undrawn facility of £300 million by the end of the period.

The company’s pre-letting momentum remains healthy as the lockdown easing has helped the company. However, the deadly pandemic has impacted the ability of company’s existing occupiers to meet their rental payments in some cases. The company though seems to be stable despite all these challenges. On 10 July 2020, the Great Portland Estates Plc’s shares closed at GBX 605.40 per share, down by 0.59 per cent from previous day closing price.

 

 

 


Disclaimer
The website https://kalkinemedia.com/uk is a service of Kalkine Media Ltd, Company Number 12643132. The article has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine Media does not in any way endorse or recommend individuals, products or services that may be discussed on this site. Our publications are NOT a solicitation or recommendation to buy, sell or hold the stock of the company (or companies) or engage in any investment activity under discussion. We are neither licensed nor qualified to provide investment advice through this platform.

 

With Bank of England reducing the interest rates to a historic low level, the spotlight is back on diverse investment opportunities. 

Amidst this, are you getting worried about these falling interest rates and wondering where to put your money?

Well! Team Kalkine has a solution for you. You still can earn a relatively stable income by putting money in the dividend-paying stocks.

We think it is the perfect time when you should start accumulating selective dividend stocks to beat the low-interest rates, while we provide a tailored offering in view of valuable stock opportunities and any dividend cut backs to be considered amid scenarios including a prolonged market meltdown.

To know more about these dividend stocks, click here

CLICK HERE FOR YOUR FREE REPORT!
   
x
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK