Non-essential shops to open but recovery needs a vaccine – Covid-19 business news 10 June 2020.
10 June 2020.
James Salmon, Operations Director.
We look at the opening of non-essential shops, the latest on Covid-19 and the markets. The need for a vaccine for the recovery, CBILs, the furlough scheme, retail sales, energy, the housing market and more insolvencies plus a lot more.
The Covid-19 lock-down continues and we are having to make do in a new normal.
Here are CPA we want to share the business news stories we have seen that we think will affect our members and readers. Many of us are busy fighting to protect our businesses and therefore might have missed some of the news that could impact small businesses, their owners and those that sell on credit.
Covid-19 general news
A further 1,387 new cases were announced on Tuesday. However, estimates by the ONS suggest there could be nearly 6,000 cases per day in England alone – not including cases in hospitals or care homes – where people either show no symptoms or have mild symptoms and are not tested for the virus.
The number of deaths rose 286 to 40,883, however 50,107 death certificates mention Covid-19 and there have been 63,708 more deaths so far this year that would statistically have been expected.
All Non-Essential Shops along with Zoos and drive in cinemas will be allowed to reopen in England on Monday 15th, the business secretary has confirmed. Alok Sharma said “we continue to meet” the government’s five tests for lifting coronavirus lockdown restrictions. He said retailers can open as long as they follow safety guidelines, or they could face enforcement notices. But when he was asked about the possibility of reducing the 2 metre social distancing rule, Mr Sharma said “we keep these matters under review”.
The government backtracked on an earlier promise to get all children in England back into their primary schools before the end of term. Teachers had opposed the idea, arguing that it would have been impossible to maintain social distancing. Instead, schools will make their own judgments as to whether to admit more children than the few who were allowed to return last week.
AstraZeneca has secured support from the US government for the development of antibody-based COVID-19 treatments as the British drug maker adds other strings to its bow, beyond the potential vaccine it is developing with Oxford University. The company said today it had signed a second set of deals with authorities in the United states backing its development of a monoclonal antibody treatment against the coronavirus.
The UK Treasury said approximately 8.9 million workers are now covered by the government’s furlough scheme. More than a quarter of the UK workforce is now being supported and the cost so far has reached £19.6bn.
The German Government plans to extend the travel warning it has in place for more than 160 countries outside the EU until 31st August, as nations around the world continue to battle the coronavirus pandemic.
Brazil’s supreme court ordered the country’s health ministry to recommence publishing covid-19 data online. The government, which has been roundly panned for its handling of the outbreak, stopped releasing cumulative death and infection updates last week
Markets.
The FTSE 100 sold off yesterday, down 136 points or 2.1% to close at 6,335. The market was weighed down by forecast cuts from British American Tobacco, while fewer sales by builder Bellway demonstrated the effect of country-wide lockdown on the housing sector.
European stocks also fell with the German index down 1.42% and the French index down 1.55%.
The Nasdaq broke through the 10,000 level for the first time before closing at 9953 (up 0.29%) while the S&P500 closed down 0.78%. In Asia, the Nikkei in Japan closed up 0.15%, The Hong Kong Hang Seng was flat and the Chinese CSI was down 0.18%.
The oil Price dropped after data showed a rise stockpiles in the USA
The gold price extended its gains as global equity markets corrected after last weeks rally and the attention of investors turned to the Federal Reserve’s meeting this week.
Economic bounce-back requires Brexit deal and vaccine
KPMG ’s latest outlook report warns that Britain’s economic recovery could be hampered by a hard Brexit or a failure to find a vaccine for COVID-19.
The economy would shrink by 7.2% next year, before rebounding by 2.8% in 2021 provided a vaccine is available by next summer.
If this is not the case growth would be limited to 0.9%, the firm said, adding that the unemployment rate could hit 8.6% this year, and 11% in 2021.
Yael Selfin, chief economist at KPMG UK, said: “Considerable uncertainty remains around the timing of a vaccine, which will impact the timing and speed of the recovery, as well as the extent of any permanent damage to the economy.”
Bounce back loan borrowing at £24bn as CBILS approval rate hovers around 50%
The approval rate for coronavirus business interruption loans (CBILS) remains at just above 50%, as figures show British firms have borrowed nearly £35bn under the government’s three emergency coronavirus credit schemes.
Total lending under the bounce back scheme was at £23.8bn by 7 June, up from £21.3bn a week earlier, with a total of £9.6bn lent under the CBILS scheme and £1.57bn as part of the CLBILS initiative.
Giles Wilkes, senior fellow at the Institute for Government, told MPs on the Treasury committee he was worried much of the cash would not be repaid. “As time passes guarantees and subsidised lending from the state can start damaging the fabric of the economy if you simply keep alive companies that should not be kept alive or won’t be sustainable,” he said
UK government eyes stakes in start-ups to keep them afloat
The Treasury could commit up to £1bn through the government’s Future Fund, which provides loans to start-ups threatened by coronavirus that convert into equity if not repaid.
State paying wages for 11.5m Britons
New figures from the Treasury reveal that nearly 9m UK workers have been furloughed as a result of the coronavirus pandemic.
The data showed that firms have now claimed £19.6bn to cover furloughed employees’ wages.
A further 2.6m self-employed workers have submitted claims for a total of £7.5bn. Today is the deadline for employers to place new staff on furlough.
The scheme will be closed to new entrants from 30th June.
Meanwhile, a fortnightly survey of companies by the Office for National Statistics (ONS) found employers expect to lay off fewer staff than before as sentiment improves.
All non-essential shops can open on Monday but consumers remain cautious
Alok Sharma has confirmed that all non-essential shops will be allowed to reopen in England on Monday.
The business secretary said retailers can open as long as they follow safety guidelines, or they could face enforcement notices.
However, economists expect high streets are on course for a slow restart with an EY survey finding only 25% of shoppers felt comfortable visiting supermarkets and nearly two thirds expected to go shopping less frequently.
Some 67% said they expect it will take months or years before they return to a restaurant while 80% said it could be months or years before they feel comfortable visiting a cinema and 73% felt the same way about returning to pubs and bars.
WTO
European Trade Commissioner Phil Hogan has said he is considering a bid to become the director-general of the World Trade Organisation.. Hogan advocates reform at the WTO and agrees with the US & Japan that the global rules on industrial subsidies.
Retail sales
UK Retail Sales on the high street were down 5.9% year-on-year in May, the second-sharpest drop since the British Retail Consortium (BRC) industry survey started, however this wasn’t as bad as the 19.9% plunge recorded in April.
Energy
The United Kingdom will not have used coal-powered electricity for two months, the longest period of power generation without coal since the Industrial Revolution. On 8 April, the last of the UK’s four remaining coal power plants was switched off, with all electricity subsequently provided by a combination of gas and low-carbon alternatives such as solar and wind.
Japan
Japan’s government approved an emergency budget worth nearly $300 billion Wednesday, doubling the scale of measures to boost the world’s third-biggest economy after covid-19 tipped it into recession.
House sales in England rebound
Research by property website Zoopla shows house sales in England have rebounded since the government allowed estate agents to reopen last month. Zoopla said demand had improved in June, with asking prices 6% higher than a year earlier.
However, the company’s research director, Richard Donnell added: “We still believe that this spike in demand will be short-lived as the economic impacts of COVID start to feed through into market sentiment and levels of market activity in 2020 H2.”
Another CVA in the restaurant sector
The Restaurant Group said it would close around 125 of its Frankie and Benny’s restaurants and seek rent reductions on a remaining 160 sites of its leisure division. The company said it would implement a company voluntary arrangement (CVA) for its leisure division, which principally comprises the Frankie and Benny’s estate. It said the arrangements would have no impact on its Wagamama, airport concessions and pub operations.
Everest bought back by private equity owner
Double glazing firm Everest has been sold back to its private equity owner Better Capital via a “pre-pack” administration. FRP Advisory handled the sale. Partner Alistair Massey commented: “This deal secures a significant number of jobs and personal livelihoods for many affiliated roles.” Around 1,000 jobs will be preserved but the company said 188 redundancies were being made across the business.
Could a wealth tax help pay for Britain’s coronavirus spending?
Paul Falvey, a tax partner at BDO, looks at whether a wealth tax could help pay for Britain’s coronavirus spending woes in the Daily Mail.
He says a wealth tax on property would run into complex problems as there are wide regional variations in the value of property and for many their home is the main or even sole asset.
Property has also already been subject to stamp duty, council tax and inheritance tax. Overall, Falvey says introducing a wealth tax in a fair way would be overly complex and bring in only a small proportion of the UK’s tax take.
Don’t let Covid-19 bust your business!
It will if your cash flow dries up, either sooner or later.
The Credit Protection Association (CPA) has been assisting thousands of UK businesses to get paid since 1914. We have seen many financial crises, this one will be particularly deadly for suppliers for sometime to come.
CPA eases cash from tardy debtors – Efficiently, Effectively, Economically and Ethically. Above all tactfully, because maintenance of goodwill is paramount.
To meet the needs of creditors in the current crisis, we have designed a “critical care” package especially tailored for the situation.
- The annual package costs start at very low rates
- A minimum performance warranty is provided
- Several complimentary services included
Clients instruct CPA on-line via their PC or phone, completely user-friendly. Your late paying customers are told to pay you direct (not to us).
A very recent report shows a 23% increase in the number of unpaid invoices since March 11th THIS YEAR – are you getting a build-up of late payers?
Right now, overdue accounts must be a concern and CPA has a great track record of encouraging slow-payers to pay their suppliers quickly.
It takes less than 17 minutes to see how you would benefit, do you have the time now?
No face-to-face meeting required – just call Peter Uwins, CPA’s National Sales Manager, on 020 8846 0000 (business hours) or email nsm@cpa.co.uk today.
When you see your money come in, you will be so glad you used CPA.
Do you sell on credit?
With pressures on the cash flow it is essential that you stay on top of the credit limits you grant customers and watch carefully for any late payments.
Those customers will look for the easiest option to boost their cash-flow. Don’t let it be you.
You can’t just assume your customers can and will pay you eventually, no matter how big their name is.
It is essential to have credit management systems in place to monitor and check your customers credit worthiness.
It is also best practice to use a trusted third party like CPA to make sure you are paid on time by customers, no matter how good a name they have.
About CPA
The Credit Protection Association can help!
Formed in 1914, CPA has been providing credit management services to SMEs for over 100 years.
At the Credit Protection Association, we provide first class credit information that can help you avoid being over extended to customers who are at risk. Our monitoring service can flag up warning signs long before the end, giving you the chance to adjust and reduce your exposure. We provide recommended credit limits and credit scores on a traffic light system and can help you set appropriate credit policies for your customers.
We regularly publish lists of the latest insolvencies but by then it is too late. Our credit reports however predict approximately 96% of company insolvencies long before they arrive.
Companies in trouble usually have very bad cash flow and they try to deal with it by delaying payment to their suppliers, increasing your exposure to them.
If you supply on credit, help us help you identify the risks.
Why use a third party collector?
As a third party collector, we can also get your payments prioritised over those who are not as hot on collections. When your customer receives a letter from the Credit Protection Association regarding their outstanding account, they are going to want to get that resolved as a priority. Our overdue account recovery service can get your unpaid invoices to the top of their “to do” list and get your invoice paid.
Over the years we have collected billions in overdue invoices for our customers.
Our debt recovery and credit management services give our members the financial freedom needed to grow and prosper, while our new Late Payment Compensation department could unlock hidden potential and offer the compensation needed to springboard your business to success.
You might be hesitant about contacting a debt collection agency. What are they going to be like?
Can they help your particular type of business?
There is no need for concern. CPA are courteous, helpful and very probably have had direct experience of working with your type of business.
Debt collection agencies are not all alike.
Success lies in both recovering money and keeping customers happy. The Credit Protection Association was founded in 1914 and has helped tens of thousands of UK businesses to collect outstanding payments and reduce the risk of incurring bad debt. We believe that creditors deserve to be paid for the work or goods they have supplied but we fully understand the need to maintain
the best possible relationship with customers!
At The Credit Protection Association, we provide solutions, advice and back-up in all areas relating to the supply of services or goods on account. Client-members receive everything they need from a single source to reduce debtor days and write-offs.
The Credit Protection Association has helped has assisted tens of thousands of UK businesses with their credit control requirements, since the First World War.
We are polite, firm and efficient when it comes to recovering outstanding debt.
“We have used CPA for a number of years now. The website is easy to navigate around with lots of helpful reports. The staff are always at hand and very friendly. CPA has helped us reduce our debt over the years and keep track of potential issues with our customers.”
~ CPA client in Buckinghamshire
“The service from CPA has proved to be everything that you said it would be. We have already seen a huge benefit. We have had a number of overdue accounts paid promptly and directly to us. It is also a huge weight off our mind to know that once we have passed an overdue payment over to you, you take care of everything whilst keeping us informed.
~ Credit Controller client in Warrington
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections
Ready to speak to an advisor?
For help or advice on credit management, entirely without obligation.
Call us today
0330 053 9263
CPA is passionate about late payment
The Credit Protection Association has been protecting smaller firms against poor payment practices for over 100 years.
We are extremely passionate about breaking the late payment culture that holds back the UK economy and threatens many SMEs with cash flow difficulties being the single biggest killer of Britain’s small businesses.
If you were regularly paid late we can help. Those former customers used you to boost their own cashflow, regularly paying you late.
As a result you had extra costs, you had the distraction of having to chase payment, you had opportunity costs because your capital was tied up in their late invoices.
Under little used legislation, you are entitled to compensation for those late payments.
Now you can boost your own cash-flow.
CPA can help unearth the those hidden treasures.
We have the technology to reveal the compensation you are due and we have the extensive experience and expertise to then turn those claims into cash.
Yes, CPA can help you boost your business cash-flow.
Don’t let your bankers control you, contact CPA today.
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections
Do you realise you could be sitting on a fortune?
Late payments often result in a cash flow crunch and leave SMEs in need of a cash injection.
If you sold B2B on credit then there may be a hidden source of capital you can call on.
If you fancy an bit of extra cash in your business, rather than jumping through hoops with your bank, you could look to uncover the resources from an unexpected source within your own business.
Not many are aware but there could be a hidden fortune within your business, sitting there, just waiting to be uncovered and released.
We can help you uncover the pile of gold, you didn’t even know you were sitting on.
If you trade with other businesses and were often paid late then you could be entitled to significant compensation.
Under little known and under-utilised legislation your business could be due huge amounts in compensation that you didn’t even know about.
Let’s be clear – this is not a way to weaken any customer relationships you value. It is one that identifies who’s been paying late and then recover the potentially significant sums in compensation using Late Payment Legislation from businesses where the relationship has already ended.
You can pick and choose who you want us to follow up – but once we’ve agreed which companies you’d like to pursue compensation from it’s a fast process and there’s no financial outlay to you whatsoever. My team at CPA put its expertise to work to recover the compensation due and fight late payment culture.
That compensation could provide the cash boost your business needed.
But don’t delay, that compensation evaporates if not claimed within six years of the late payment.
How can CPA help?
CPA has developed a unique technology to dig into your accounting records and discover the cash injection you are due by means of compensation. The software does all the hard work. Our software interacts over the cloud with over 300 different software packages, working directly with your accounts package, just so long as it’s stored on a computer.
We recognise that most companies do not have the resources to spend time on the identification and calculation of Late Payment Compensation. Our service can produce an Analyses within just a few days with (usually) less than 30 mins of co-operation from our clients. We work directly with over 300 accounting packages but can also work with bespoke accounts packages. Indeed, speed is essential as the oldest invoices may fall foul of the 6-year time limit.
Once the Sales Ledger Analyses is made available to clients, all that is required is that management decide which commercially sensitive ex-customers to remove from the list and return it to us.
CPA then uses its years of collection experience to explain and recover the Late Payment Compensation Claims. Clients do not handle any part of the recovery process as our team will take all communications from the companies against who the claims has been made. Often, it’s simply a case of explaining the legislation, sometimes we have to go all the way and enforce the legislation through the courts.
The result is that we are realising clients’ claims worth tens and sometimes hundreds of thousands of pounds which, of course, is pure net profit. You may also be among the recipients of “hundreds of thousands of pounds” should you elect to take advantage of our services.
We do the work, you receive the cash.
If you have supplied goods and services to businesses on credit and were regularly paid late then you could be due significant sums in late payment compensation.
We are talking to companies and unearthing claims in the hundreds of thousands from former business customers who paid them late. Large business customers who abused their power to inflict unfair and sometimes illegal payment practices.
We are helping business owners who are looking to boost the returns from their business before they retire. We are helping businesses who have lost major clients after years of loyal service to get properly compensated for systematic late payment. We are helping companies that were looking to close down, who looked insolvent and finding that cash injection they need to avoid insolvency.
Those former clients who regularly paid you late can finally be made to pay.
Ready to speak to an advisor?
For help or advice on credit management, entirely without obligation.
Call us today
0330 053 9263
The Credit Protection Association is a credit management company established in 1914. If you supply goods or services on credit then we can help you!
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections
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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections