Covid Tornado Leaving Dust in its Wake

Posted on Apr 21, 2021. by NTI

The news from the UK is that, despite what is happening in some other parts of the world, we are starting to see the back of the Covid tornado and the dust is beginning to settle. For some, the emerging picture is not so pretty and it seems it is going to need more than a dustpan-and-brush to clear a path back to recovery.

One sector that is particularly dust-ridden is the gym industry. Its doors opened again on Monday 12 April and it desperately needs flabby Britain to return to cross-trainers and zumba classes before it can assess its own fitness. An example is Pure Gym. The chain of 240 gyms suffered losses of almost £200 million in 2020 after it was forced to close all of its sites for several months during multiple lockdowns. The gym company reported a loss of £198.4 million in 2020, compared to a loss of £39.6 million in the previous year. It must have some pretty patient bankers, who will be feeling the burn and, presumably, are being told that there is no gain without pain.

Pure Gym opened ten new sites on the re-opening and it said it welcomed tens of thousands of new members, with more than one million workouts completed in its first week back. Customer numbers have remained firmer than a lot of bellies, with just 200,000 members being lost and 1.5 million being retained, and chief executive Humphrey Cobbold (who doesn't sound like he has abs of steel) said that Pure Gym is a stronger business for having weathered the storm. That's right, Humphrey, closing down your business, having no income and no customers can really focus the mind.

One person who is still crouching closer to the eye-of-the-storm than most of us is our chubby gym-shy former prime minister, David Cameron. He has been given two weeks to pass on the details of his text messages in which he attempted to lobby the chancellor on behalf of failed finance firm Greensill. In a letter to Cameron, the chair of the Treasury select committee urged the former prime minister to release details of the messages, ahead of oral evidence which is to be given to MPs in the coming weeks. In truth, Dave, and on behalf of the nation, we really need a complete timeline of events to begin to understand the contact you had on behalf of Greensill with any Government minister.

At this stage the Cabinet Office will be able to conduct a review into Dave's role in lobbying health secretary Matt Hancock and chancellor Rishi Sunak for Greensill while he worked at the firm as a part of a wider probe. Only then we will be able to see exactly how much of 'an Ed Woodward' Dave really is (this is a term the NTI newsroom are trialling this week, in a euphemistic nod to snakelike, moral-free human beings). We get the distinct impression that the next few weeks aren't going to be very kind to David Cameron. If we were watching his life as a Netflix box-set we wouldn't be expecting a happy ending, would we?

Talking of which, another surprising figure to be seen crouching coughing amidst the post-tornado dust is that goliath of the modern digital age, Netflix. It had forecast an additional six million subscribers in the last quarter, but only achieved four million. It is also saying that it believes it will only add another one million subscribers in the next quarter. To offer you some context, 'previously on Netflix', the company has raised $15 billion in debt since 2011 to help pay for the content of its programming and it has plans to pay back its outstanding debt that matures in 2021 with its more than $8 billion of cash on hand. To achieve this it needs to keep recruiting subscribers.

The numbers are big. Netflix revenues grew by 24 per cent to $7.16 billion in the first three months of 2021, but a spokesperson for the company seems to think that growth has slowed due to Covid-19; which seems bonkers to us as, apart from staring at little lenses at the top of our laptops, we have had absolutely nothing else to do for the last 14 months. Shares in the company fell by 10 per cent to $495in after-hours trading in New York last night (Tuesday 20 April).

The April weather may be beautiful, but there are dust particles in the air all around us.

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