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  • Today's business and finance round up 6th May 2021

Today's business and finance round up 6th May 2021

Today's business and finance round up

6th May 2021

Good morning Today is Super Thursday, the day when up to 40 million voters go to the ballot boxes: in England for local councils and mayors, and in Scotland and Wales for their national parliaments. Granted it’s not as exciting as say Super Saturday at London 2012 but it’s important nonetheless! More details on what elections are happening in your area here.

Yesterday's market moves

FTSE 100   +1.7%  7,039FTSE 250    +0.3%     22,386

After spooking markets earlier in the week with the suggestion that interest rates could go up to tackle inflation, Janet Yellen, the US Treasury Secretary, did some serious backpedalling. She said she wasn’t recommending a rate rise and did not think there was “going to be an inflationary problem”. That helped soothe investor concerns and the FTSE100 more than recovered the losses of yesterday to close up 1.7%.  

ECOMMERCE

Woohoo for Boohoo

What's happened

Fast fashion and influencer favourite Boohoo reported a 41% increase in annual revenue to £1.7bn. With the pandemic meaning less reasons to dress up for a night out, performance was driven by the move to comfy loungewear to do all those Zoom calls. 

Why does it matter

It’s not just customers who have been on a shopping spree, Boohoo spent £250m buying Oasis, Warehouse, Debenhams, Dorothy Perkins, Burton and Wallis. The company also owns PrettyLittleThing, Coast, Karen Millen and Nasty Gal so has built quite a portfolio of high street brands.

Their strategy is to become a major ecommerce player in fashion and now with the Debenhams acquisition, beauty. They have plenty of cash in the bank (£276m) so they’re likely to continue snapping up brands. 

The Manchester based company has grown rapidly since being founded in 2006. In the last 5 years alone revenues have gone up x11 and the share price has gone up over 600%.

But it’s not all good news, Boohoo has faced a lot of backlash over reports of malpractice and poor working conditions in its supply chain factories. The company launched an investigation following these allegations and say they are working to improve their supplier standards. Despite the bumper results the share price finished the day down 2.5% at 318p with these issues cited as the main reason.

Takeaway

The demise of the high street has been a much discussed topic over the past few years and the pandemic has accelerated this. Online retailers like Boohoo have taken advantage of this to create a stable of high street brands with the aim of transforming them into digital stores.

But the fashion industry has come under heavy scrutiny on how ethical the supply chains are and how much it contributes to carbon emissions. Investors are increasingly interested in these areas so retailers will have their work cut out to address these concerns.

PHARMACEUTICALS

Vaccine huge Pfizer money maker for years to come

What's happened

US pharmaceutical giant Pfizer said their Covid-19 vaccine was the top selling product in the first three months of the year, accounting for about 25% of sales. They said they now expect the vaccine to generate $26bn in sales this year (1/3 of the total) compared to the $15bn they initially predicted. 

Why does it matter

Pfizer expects that the Covid-19 vaccine will continue to be a huge part of the business for years to come. They have already signed contracts to deliver 1.6 billion does this year and are in supply talks with governments around the world for 2022 and beyond. Experts say that with the emergence of new variants the Covid-19 vaccine could become like the flu i.e. requiring booster shots seasonally. 

But encouragingly Pfizer's strong performance is not just a story of Covid-19. Even excluding the growth provided from the shot, revenue grew 8%, which was above the company's 6% target.

Takeaway

Unlike some other vaccine makers (AstraZeneca and Johnson & Johnson) Pfizer is making profits on the vaccines and not supplying them at cost. While the US and UK have vaccinated large proportions of their populations, Covid-19 cases are still rising in other parts of the world and as the vaccine becomes more available Pfizer will undoubtedly be a big beneficiary.

Covid-19 Vaccine Update

  • In the past 24 hours 127k UK adults have had first dose and 257k have had second dose.

  • This means 66.1% of UK adults have had at least one dose of a vaccine, 30.2% of adults have had two doses.

Other stories to keep you in the loop

Stat of the day

Almost 2 out of 3 jobs lost in the UK during the pandemic were from under-25s