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| Cineworld confirms UK and US closures; UK car sales hit two-decade low – as it happened | |
| (32 minutes later) | |
| Rolling coverage of the latest economic and financial news | Rolling coverage of the latest economic and financial news |
| And finally, shares in Cineworld have closed down 36% tonight. | |
| The closure of sites in the UK and US has wiped a third off the company’s value. | |
| The stock ended the day down 14.2p at 25.2p, which is slightly above its record closing low set back in March (as the UK entered its national lockdown). | |
| At one stage this morning, shares had halved in value - and the bigger picture is that they’ve lost roughly 90% this year -- one of the biggest corporate casualties of the pandemic. | |
| As David Madden of CMC Markets puts it: | |
| Here are our main stories on Cineworld, and the wider crisis in the UK economy, today: | |
| That’s all for today. Back tomorrow. Thanks for following, and best of luck to all Cineworld staff and their families. GW | |
| Cineworld workers on zero-hours contracts in the UK could be left without pay beyond Thursday after the cinema chain’s chief executive said the government’s job support scheme would not save 5,500 jobs. | Cineworld workers on zero-hours contracts in the UK could be left without pay beyond Thursday after the cinema chain’s chief executive said the government’s job support scheme would not save 5,500 jobs. |
| My colleague Jasper Jolly explains: | My colleague Jasper Jolly explains: |
| Here’s the full story: | Here’s the full story: |
| Credit rating agency Fitch has downgraded Cineworld to CCC-, a very low rating which indicates the company is likely to default on its loans. | Credit rating agency Fitch has downgraded Cineworld to CCC-, a very low rating which indicates the company is likely to default on its loans. |
| In a statement, Fitch says Cineworld is approaching “a short-term liquidity crisis”, and could need new funding by the end of this year. | In a statement, Fitch says Cineworld is approaching “a short-term liquidity crisis”, and could need new funding by the end of this year. |
| The agency explains: | The agency explains: |
| Back in the UK...Amisha Chohan, equity analyst at Quilter Cheviot, warns that Cineworld will face a high price if looks for fresh financial support. | Back in the UK...Amisha Chohan, equity analyst at Quilter Cheviot, warns that Cineworld will face a high price if looks for fresh financial support. |
| She writes that investors might prefer to back a tech company such as Netflix, rather than a cinema chain: | She writes that investors might prefer to back a tech company such as Netflix, rather than a cinema chain: |
| Just in: the US services sector continued to grow solidly last month, according to two rival surveys. | Just in: the US services sector continued to grow solidly last month, according to two rival surveys. |
| Data firm IHS Markit reports there was a solid upturn in U.S. service sector business activity, led by faster rise in new business and a pick-up in overseas demand. | Data firm IHS Markit reports there was a solid upturn in U.S. service sector business activity, led by faster rise in new business and a pick-up in overseas demand. |
| This encouraged US firms to take on more staff (unlike in the UK, where headcounts fell in September). | This encouraged US firms to take on more staff (unlike in the UK, where headcounts fell in September). |
| This left Markit’s US services PMI at 54.6 in September, down slightly from 55.0 in August, but still showing a decent expansion. | This left Markit’s US services PMI at 54.6 in September, down slightly from 55.0 in August, but still showing a decent expansion. |
| The Institute of Supply Management’s services healthcheck has also been released, and it shows that growth accelerated last month. The ISM’s non-manufacturing PMI jumped to 57.8, from 56.9, well into expansion territory (over 50) as firms expanded their headcounts. | The Institute of Supply Management’s services healthcheck has also been released, and it shows that growth accelerated last month. The ISM’s non-manufacturing PMI jumped to 57.8, from 56.9, well into expansion territory (over 50) as firms expanded their headcounts. |
| Chemicals firm Dow and digger maker Caterpillar are the top risers on the Dow, up over 2.5% each, suggesting Wall Street is more optimistic about economic recovery hopes. | Chemicals firm Dow and digger maker Caterpillar are the top risers on the Dow, up over 2.5% each, suggesting Wall Street is more optimistic about economic recovery hopes. |
| However, soft drinks business Coca-Cola has dipped 0.1%, while credit card operator Visa and sportwear brand Nike are lagging behind, in a sign that consumer spending is weak (a factor behind Cineworld’s woes). | However, soft drinks business Coca-Cola has dipped 0.1%, while credit card operator Visa and sportwear brand Nike are lagging behind, in a sign that consumer spending is weak (a factor behind Cineworld’s woes). |
| Donald Trump continues to be criticised for his trip to see supporters outside Walter Reed medical center yesterday, but the appearance seems to have calmed the markets. | Donald Trump continues to be criticised for his trip to see supporters outside Walter Reed medical center yesterday, but the appearance seems to have calmed the markets. |
| Wall Street has opened higher, amid speculation that the president could be discharged soon, three days after being taken in for Covid-19 treatment. | Wall Street has opened higher, amid speculation that the president could be discharged soon, three days after being taken in for Covid-19 treatment. |
| The Dow Jones industrial average has jumped by 249 points, or 0.9%, to 27,932 points, while the tech-focused Nasdaq is up 1% in early trading. | The Dow Jones industrial average has jumped by 249 points, or 0.9%, to 27,932 points, while the tech-focused Nasdaq is up 1% in early trading. |
| Trump’s precise medical condition remains unclear, with the White House’s medical team saying it “has continued to improve”. | Trump’s precise medical condition remains unclear, with the White House’s medical team saying it “has continued to improve”. |
| The president’s chief of staff says he’s ‘optimistic’ that Trump could be back to the White House later today. | The president’s chief of staff says he’s ‘optimistic’ that Trump could be back to the White House later today. |
| Meanwhile, the security officers who accompanied Trump on his “completely unnecessary Presidential ‘drive-by’” - as one doctor of emergency medicine put it - must now quarantine. | Meanwhile, the security officers who accompanied Trump on his “completely unnecessary Presidential ‘drive-by’” - as one doctor of emergency medicine put it - must now quarantine. |
| The CEO of the Vue cinema chain, Tim Richards, has warned that small independent picture houses might not survive the pandemic. | The CEO of the Vue cinema chain, Tim Richards, has warned that small independent picture houses might not survive the pandemic. |
| He tod Radio 4 this morning today that the absence of major new releases was a blow to the whole industry. | He tod Radio 4 this morning today that the absence of major new releases was a blow to the whole industry. |
| Richards has also warned today that Vue is looking at ‘all options’, following Cineworld’s move. | Richards has also warned today that Vue is looking at ‘all options’, following Cineworld’s move. |
| But he remains hopeful that Vue (which has 91 cinemas with over 880 screens in the UK and Ireland) would get though the crisis. | But he remains hopeful that Vue (which has 91 cinemas with over 880 screens in the UK and Ireland) would get though the crisis. |
| Nightclub operator G-A-Y has launched a legal battle against the Department of Health, in an effort to overturn the 10pm curfew on bars, pubs and restaurants. | Nightclub operator G-A-Y has launched a legal battle against the Department of Health, in an effort to overturn the 10pm curfew on bars, pubs and restaurants. |
| Amid mounting criticism of the curfew, G-A-Y, which runs the renowned Heaven club at the heart of London’s gay nightlife scene, wrote to the health secretary, Matt Hancock, advising him it was preparing to take legal action. | Amid mounting criticism of the curfew, G-A-Y, which runs the renowned Heaven club at the heart of London’s gay nightlife scene, wrote to the health secretary, Matt Hancock, advising him it was preparing to take legal action. |
| Law firm Simpson Millar, acting for G-A-Y, questioned the logic behind the “arbitrary decision” to impose a 10pm curfew, a restriction that has sent sales plunging and left many businesses fearing they won’t survive the winter. | Law firm Simpson Millar, acting for G-A-Y, questioned the logic behind the “arbitrary decision” to impose a 10pm curfew, a restriction that has sent sales plunging and left many businesses fearing they won’t survive the winter. |
| Here’s the full story: | Here’s the full story: |
| Chancellor Rishi Sunak has suggested he could be open to providing more help to the entertainment industry in future, at the “appropriate time”. | Chancellor Rishi Sunak has suggested he could be open to providing more help to the entertainment industry in future, at the “appropriate time”. |
| However, he didn’t have any last-minute help to prevent Cineworld temporarily closing its UK venues from Thursday. | However, he didn’t have any last-minute help to prevent Cineworld temporarily closing its UK venues from Thursday. |
| The Press Association has the details: | The Press Association has the details: |
| Here’s the latest on Odeon’s plans: | Here’s the latest on Odeon’s plans: |
| Time for a quick recap. | Time for a quick recap. |
| Cineworld, Britain’s largest cinema chain, has confirmed it is mothballing all its screens in the UK and the US, due the impact of Covid-19 on the industry. | Cineworld, Britain’s largest cinema chain, has confirmed it is mothballing all its screens in the UK and the US, due the impact of Covid-19 on the industry. |
| The move could mean up to 45,000 job losses, including over 5,000 in the UK. | The move could mean up to 45,000 job losses, including over 5,000 in the UK. |
| The company told the City this morning that: | The company told the City this morning that: |
| News of the closures broke on Sunday morning, upsetting and angering staff who hadn’t been informed by the company at that stage. | News of the closures broke on Sunday morning, upsetting and angering staff who hadn’t been informed by the company at that stage. |
| CEO Mooky Greidinger blamed the decision on the lack of major blockbuster releases, including the delayed James Bond film. He explained: | CEO Mooky Greidinger blamed the decision on the lack of major blockbuster releases, including the delayed James Bond film. He explained: |
| Shares in Cineworld promptly halved when the London stock exchange opened at 8am, and are currently down 40% at 23p (down around 90% this year). | Shares in Cineworld promptly halved when the London stock exchange opened at 8am, and are currently down 40% at 23p (down around 90% this year). |
| Cineworld also warned that it is looking at all possible ways of raising more funds, amid talks of a debt restructuring. | Cineworld also warned that it is looking at all possible ways of raising more funds, amid talks of a debt restructuring. |
| Boris Johnson has urged people to go to the cinema and help the sector, but the Prospect union has criticised the government for not providing more help. | Boris Johnson has urged people to go to the cinema and help the sector, but the Prospect union has criticised the government for not providing more help. |
| Other cinema chains are also facing the consequences of the pandemic, with Odeon deciding to close a quarter of its cinemas on weekdays. | Other cinema chains are also facing the consequences of the pandemic, with Odeon deciding to close a quarter of its cinemas on weekdays. |
| The pandemic has also hit the UK car industry, which just posted its weakest September sales figures since 1999. However, sales of more environmentally friendly cars did rise, as buyers shunned diesel and petrol models. | The pandemic has also hit the UK car industry, which just posted its weakest September sales figures since 1999. However, sales of more environmentally friendly cars did rise, as buyers shunned diesel and petrol models. |
| A survey of the UK services sector has found that firms kept cutting jobs last month, despite a rise in activity. | A survey of the UK services sector has found that firms kept cutting jobs last month, despite a rise in activity. |
| In the eurozone, service sector activity fell following the introduction of tighter curbs. Economists fear Europe could suffer a new downturn this winter, as the pandemic continues to hit growth. | In the eurozone, service sector activity fell following the introduction of tighter curbs. Economists fear Europe could suffer a new downturn this winter, as the pandemic continues to hit growth. |
| Sky News is reporting that Cineworld’s lenders are preparing for a debt restructuring, due to the imminent temporary closure of its cinemas in the UK and US. | Sky News is reporting that Cineworld’s lenders are preparing for a debt restructuring, due to the imminent temporary closure of its cinemas in the UK and US. |
| They say: | They say: |
| Odeon is to shut a quarter of its cinemas during the week as a dearth of Hollywood blockbusters and the second wave of the pandemic keeps movie-goers at home. | Odeon is to shut a quarter of its cinemas during the week as a dearth of Hollywood blockbusters and the second wave of the pandemic keeps movie-goers at home. |
| Odeon, which operates 120 cinemas in the UK and Ireland, has contacted members of its Limitless loyalty scheme to say that some of its outlets will move to a weekend-only model from this Friday. | Odeon, which operates 120 cinemas in the UK and Ireland, has contacted members of its Limitless loyalty scheme to say that some of its outlets will move to a weekend-only model from this Friday. |
| The shift to Friday through Sunday opening, which sources say was made before the announcement that the premiere of the latest James Bond film is to be delayed until next April, comes as rival Cineworld moves to temporarily shut all of its cinemas in the UK and the US. | The shift to Friday through Sunday opening, which sources say was made before the announcement that the premiere of the latest James Bond film is to be delayed until next April, comes as rival Cineworld moves to temporarily shut all of its cinemas in the UK and the US. |
| Odeon, which is owned by AMC Theaters, the world’s largest cinema chain with over 1,000 outlets, blamed the lack of almost any new films. | Odeon, which is owned by AMC Theaters, the world’s largest cinema chain with over 1,000 outlets, blamed the lack of almost any new films. |
| In an email to customers, the company said: | In an email to customers, the company said: |
| Cinema owners are stuck in a grim cycle as distributors and studios hold back the release of high profile films, from the next instalment in the Fast & The Furious franchise to Marvel’s Black Widow, amid concerns audiences won’t go and see them (as Cineworld’s CEO Mooky Greidinger explained earlier) | Cinema owners are stuck in a grim cycle as distributors and studios hold back the release of high profile films, from the next instalment in the Fast & The Furious franchise to Marvel’s Black Widow, amid concerns audiences won’t go and see them (as Cineworld’s CEO Mooky Greidinger explained earlier) |
| In the past week the top 10 films in cinemas in the UK and Ireland made less than £2m at the box office. Last year, an average week notched up £24m. | In the past week the top 10 films in cinemas in the UK and Ireland made less than £2m at the box office. Last year, an average week notched up £24m. |
| The UK retail sector suffered a drop in customers last week, as new Covid-19 restrictions and a burst of autumnal rain kept people at home. | The UK retail sector suffered a drop in customers last week, as new Covid-19 restrictions and a burst of autumnal rain kept people at home. |
| That’s according to analytics firm Springboard, which found that retail footfall dropped most sharply in the evening -- after the government brought in a 10pm closure for pubs and restaurants. | That’s according to analytics firm Springboard, which found that retail footfall dropped most sharply in the evening -- after the government brought in a 10pm closure for pubs and restaurants. |
| Springboard reports that: | Springboard reports that: |
| Footfall across all retail destinations throughout the UK declined by -3.5% last week from the week before | Footfall across all retail destinations throughout the UK declined by -3.5% last week from the week before |
| Footfall across retail destinations declined by -8.4% between 7pm and 11pm and -14.8% between 11pm and 7am | Footfall across retail destinations declined by -8.4% between 7pm and 11pm and -14.8% between 11pm and 7am |
| UK footfall fell each day between Wednesday and Saturday, averaging -7.1%, no doubt in part a consequence of the severe rain across the UK | UK footfall fell each day between Wednesday and Saturday, averaging -7.1%, no doubt in part a consequence of the severe rain across the UK |
| Footfall across all retail destinations is now 31.4% lower than 2019 | Footfall across all retail destinations is now 31.4% lower than 2019 |
| Bectu, which represents workers in broadcasting, entertainment, communications and theatre, agrees that major studios must bear the blame for Cineworld’s closures: | Bectu, which represents workers in broadcasting, entertainment, communications and theatre, agrees that major studios must bear the blame for Cineworld’s closures: |
| Philippa Childs, head of Bectu, says: | Philippa Childs, head of Bectu, says: |
| [Nolan’s Tenet is one of the few blockbusters to hit the screens in recent months]. | [Nolan’s Tenet is one of the few blockbusters to hit the screens in recent months]. |
| Childs also warns Cineworld not to treat its staff badly (many are on zero-hours contracts). | Childs also warns Cineworld not to treat its staff badly (many are on zero-hours contracts). |
| The boss of Cineworld, Mooky Greidinger, has told Sky News that there was “no alternative” to the temporary closure of sites in the UK and US. | The boss of Cineworld, Mooky Greidinger, has told Sky News that there was “no alternative” to the temporary closure of sites in the UK and US. |
| Greidinger blamed the movie studios decision to postpone several major releases, such as Black Widow, The King’s Man and Wonder Woman 1984 since the pandemic began. | Greidinger blamed the movie studios decision to postpone several major releases, such as Black Widow, The King’s Man and Wonder Woman 1984 since the pandemic began. |
| The delay to No Time To Die on Friday was the final straw, as a new Bond film is always the biggest movie release of the year in the UK, Greidinger explained. | The delay to No Time To Die on Friday was the final straw, as a new Bond film is always the biggest movie release of the year in the UK, Greidinger explained. |
| This has forced Cineworld to close for the second time this year, as it didn’t have the goods to offer customers. | This has forced Cineworld to close for the second time this year, as it didn’t have the goods to offer customers. |
| Greidinger argued that these delays are a mistake: | Greidinger argued that these delays are a mistake: |
| But he also pointed out that cinemas remain closed in New York, and parts of California, which is encouraging the studios to hold new releases back. | But he also pointed out that cinemas remain closed in New York, and parts of California, which is encouraging the studios to hold new releases back. |
| Boris Johnson has told reporters this morning that people should go out to the cinema and support the industry: | Boris Johnson has told reporters this morning that people should go out to the cinema and support the industry: |