Home Business News20 UK listed companies attempt to quantify financial impact of coronavirus for investors

20 UK listed companies attempt to quantify financial impact of coronavirus for investors

by LLB Editor
20th Mar 20 6:52 am

Twenty UK listed companies have now issued profit warnings that attempt to quantify the financial impact that the Coronavirus outbreak will have on their business, says UHY Hacker Young, the national accountancy group.

However, these 20 companies represent only 1% of the 2,000 UK companies listed on the Main Market and AIM so the number of companies quantifying the impact is likely to rise further in the coming weeks as Coronavirus spreads further.

A total of 350 UK listed companies have made statements warning that the Coronavirus could affect their business this year โ€“ but very few have been able to actually quantify the financial impact.

UHY Hacker Young says that listed companies have an unenviable task in trying to pin down the financial impact of Coronavirus in such a rapidly changing situation.

Martin Jones, Partner at UHY Hacker Young says: โ€œObviously the numbers that businesses publish are going to change dramatically as the outbreak carries on. However, that shouldnโ€™t put companies off from doing their best to provide numbers to investors.โ€

โ€œEvery time companies do provide numbers to shareholders it adds another piece to the puzzle that allows the stock market to know what is going on.โ€

โ€œThese numbers are going to be imperfect but they will improve visibility of earnings.โ€

Five of the 20 companies issuing statements quantifying the financial impact of Coronavirus on their business are in the entertainment sector and four in the transport sector. Both of these sectors have been hit particularly hard by new social distancing measures, along with the retail and hospitality industries.

Some examples of listed companies stating the financial impact of coronavirus are shown in the table below.

Examples of listed companies quantifying the impact of Coronavirus

 

Compass Group PLC โ€œWe are implementing significant mitigation plans to manage our costs, and at this stage expect the drop-through impact of the lost revenue to be between 25%-30% across the business.ย  As a result, our operating profit for Half Year 2020 will be ยฃ125 million – ยฃ225 million lower than expected.โ€
Flutter Entertainment โ€œIn order to assist in the quantification of the impact on the Group at this point, we estimate that in a scenario where restrictions remain in place until the end of August (including full suspension of Australian sports and the cancellation of Euro 2020), EBITDA for the Group would be reduced by approximately ยฃ90-110m.โ€
WH SMITH PLC โ€œWhile the Group is currently not seeing a significant impact on its High Street business, it recognises that Covid-19 could result in reduce high street footfall. As a result, the Group currently estimates an adverse impact in the financial year ending 31 August 2020 of between ยฃ100m and ยฃ130m on the Groupโ€™s revenue and between ยฃ30m and ยฃ40m on underlying Group profit before tax.โ€
Diageo PLC โ€œโ€ฆ.we estimate the negative impact in fiscal 2020, on the group’s organic net sales and organic operating profit, to be in a range of

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