Published: 09 April 2021
By Suzanne Evans, Director, Political Insight
The European Commission is backing a call from U.S. Treasury Secretary Janet Yellen for a global minimum corporate tax, but said its rate should be decided in talks in the Organisation for Economic Cooperation and Development (OECD). The U.S. plan envisages a 21% minimum corporate tax rate, coupled with eliminating exemptions on income from countries that do not enact a minimum tax to discourage the shifting of jobs and profits overseas. The OECD has long been working on two-pillar global taxation scheme, originally meant mainly for digital giants like Google, Amazon, Facebook or Apple, to tax companies where they make profits even if they do not have a physical presence there.
The British Retail Consortium (BRC) says retail stores have lost £30bn in foregone sales over three lockdowns, with total UK footfall decreasing by 68.7% in March 2021, compared with March 2019. However, the BRC is hopeful a spending boom by consumers will be the outcome provided non-essential shops do reopen on Monday. “Savings have been building up over lockdown, and the economic recovery relies on retailers being able to unlock the pent-up demand,” said CEO Helen Dickinson.
AstraZeneca’s woes continue this morning: Australia and Spain have both announced they will be restricting use of the pharma’s COVID-19 vaccine to the over 50s and 60s respectively. The African Union's disease control body meanwhile announced it has dropped plans to secure AstraZeneca COVID-19 vaccines for its members from the Serum Institute of India, the world's biggest vaccine supplier, amid global shortfalls of the shot. AstraZeneca's $3 shot is by far the cheapest coronavirus vaccine launched so far, and the easiest to store and transport, making it well suited to developing countries. The new comes a day after European regulators confirmed they had found possible links between the AZ jab and rare cases of blood clots, and the UK’s medical regulator suggested it should not be used for the under-30s.
AstraZeneca chief executive Pascal Soriot meanwhile has come under fire from investors for failing to defend its coronavirus vaccine amid questions about safety. Investors said the Frenchman, who has been in Australia visiting his wife and children since Christmas, had not adequately communicated the benefits of AstraZeneca’s vaccine following fears it could be linked to rare brain clots. Ketan Patel, a fund manager at EdenTree Investment Management, which has a stake in AstraZeneca, said Mr Soriot’s absence from the UK “did not give the right signal or message”. “If we were grading the PR effort, they could do better,” he said. “Perhaps it is right to say, where is the chief executive in terms of articulating the healthcare benefits?”
German Covid vaccine maker CureVac is hoping emergency use approval from the European Union for its coronavirus jab will be forthcoming by June. The firm says it is close to completing the recruitment process for phase three trials and the necessary data would be available by the end of April or early May. The UK and the EU has pre-ordered 455m doses from the drug-maker.
Everyman Cinemas have posed a £19.2m loss, down from a £4.8m profit in 2019, as its business was “severely impacted by the pandemic and the resulting restrictions.” Total revenue was £24.2m, down from £65 compared to the previous year. The company had only 10 weeks of normal trading conditions in the past twelve months because of lockdowns. It was fully closed for 25 weeks of the year and experienced 17 weeks of disrupted trading. Admissions were down 63% year-on-year.
Tui, the world’s largest travel company, is raising up to €400m (£348m) by selling convertible bonds to “further improve its liquidity position as the Covid-19 crisis continues and subsequently for the repayment of existing financing instruments." The Anglo-German tour operator has been hit hard by Covid-19 restrictions which have crushed the market for foreign holidays. In January it raised €545m from shareholders as part of a €1.8bn financing package agreed with the German government, banks and its biggest shareholder.
The Co-operative Group has confirmed it will not pay back £66m in business rates relief despite pre-tax profit jumping to £127m from £24m on revenue of £11.5bn, up from £10.9bn in 2019. The group said it will repay £15.5m in furlough support. Justifying its decision, the company noted that as a community-based convenience retailer with a large store estate, it had a "disproportionate increase in costs" associated with remaining open, as compared to larger supermarket businesses. The co-op has also confirmed executives’ bonuses will be paid.
Britain's ongoing lockdown has not been enough to stop a building boom, according to new data from the IHS Markit's purchasing managers' index which showed UK construction activity hit a six-and-a-half-year high last month.
John Laing is to invest some £50m teaming up with Macquarie Capital and retirement homebuilder MCarthy & Stone to create a UK-based platform to invest in retirement accommodation. Brigid Investments Limited - the platform - in which John Laing and Macquarie Capital are each 50% shareholders, will invest in purpose-built, completed and let retirement living units developed in partnership with McCarthy Stone.
The owner of the Belfry is teeing off a sale of its historic golf courses and resort nearly four years after a previous attempt to offload it was abandoned, Sky News reports. KSL Capital Partners, an American private equity firm, has appointed the real estate advisory firm Savills to sound out potential buyers of the 550-acre site in Warwickshire. Sources said the Belfry was likely to be valued at more than £150m.
Sanne, which provides administration services to alternative asset managers, raised £79.5m in a share placing yesterday to push ahead with its acquisition strategy. The company also announced it has agreed to buy Texas-based STRAIT, a private equity and hedge fund administration business, for up to $45m. Sanne is pursuing a “disciplined acquisition strategy” and over the last 12 months has acquired six businesses, including Private Equity Administrators and Alternative Assets Accounting Software Inc.
Honda and Verizon have announced a partnership to research how 5G and mobile edge computing (MEC) could be combined to improve safety by enabling faster communication between cars, pedestrians and infrastructure. The aim is to develop software that could help drivers avoid collisions and find faster and safer routes for their journeys.
A global shortage of semiconductors is worsening, forcing auto manufacturers to extend and increase production cuts. Chips for use in cars and trucks have been harder to come by as semiconductor makers have allocated more capacity to consumer products, Bloomberg reports. The pandemic has caused a surge in orders for smartphones, TVs and computers, leaving less capacity for a stronger-than-expected rebound in vehicle demand. Recent weather-related disruptions of petrochemical supplies in the southern U.S. and a fire at a chipmaking plant in Japan have exacerbated the shutdowns. Consultant AlixPartners say the chip shortage could cost US automakers alone $61 billion in lost sales this year.
The US has blacklisted seven Chinese groups it accuses of building supercomputers to help its military in the first move by the Biden administration to make it harder for China to obtain US technology. Yesterday, three companies and four branches of China's National Supercomputing Center were added to the US blacklist which bars American companies from exporting technology to the groups without proper approval. The US commerce department said the groups were involved in building supercomputers used by Chinese "military actors" and facilitating programmes to develop weapons of mass destruction.
Nike says the art collective which made "Satan Shoes" that purportedly contain a drop of human blood in the soles has agreed to issue a voluntary recall as part of a legal settlement. The $1,018 (£740) trainers are modified Nike Air Max 97s. Only 666 pairs were made and all but one have been shipped. The collective MSCHF will offer full refunds to customers in order to remove the shoes from circulation, Nike said. The settlement resolves a trademark infringement lawsuit filed by Nike.
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