Tamweel’s Covid Index for August… rises to 57
On the last trading day of August, the Covid Index stood at 57; an increase of 12% on July’s Index of 51. The chart above illustrates how the Index has performed from 31 December 2019 to the end of August 2020.
To review our analysis and commentary dive into our report below.
August’s Covid Index of 57 reflects a material rise in the average share prices of the operators in the Index. This improvement is significantly better than the performance of the broader FTSE All Share Index which increased by only 2% on the month.
Over 80,000 outlets in the UK, including many that are operated by companies in the Covid Index cohort, benefitted from the Government’s “Eat Out To Help Out” scheme in the month of August. It has been met with widespread praise, and has helped to drive an increase in sales for businesses with a strong food offering. Combined with the VAT cut on Food to 5%, this month could provide welcome respite to battered cash flows.
Adam Spencer, from Tamweel, comments: “As developed economies around the world continue to ease national restrictions, but implement harsher ones on a more local basis, operators may be facing a few rounds of whack-a-mole with their estates, juggling various closures whilst government support taps continue to be turned off. With the lease forfeiture moratorium scheduled to be pulled at the end of September and furlough ending in October, we’re holding a collective breath on operator liquidity as creditors come calling. We anticipate there may be more ‘rainy day’ equity fundraisings to follow in the Autumn, particularly if share prices continue their upward trajectories.”