Trustnet Magazine 62 May 2020 | Page 5

Cover story
8 / 9
times ahead for income investors as
more companies cut their dividends,
while others will struggle for survival.
“Companies that are consumerfacing
and highly leveraged will go
bust, because governments around
the world aren’t going to save
everybody,” says Chillingworth.
Phoenix from the ashes
But some winners will undoubtedly
emerge once the dust settles. The latest
figures from the Office for National
Statistics show that online retail hit
a record 22.3 per cent of total sales
in March as customers in lockdown
switched to internet shopping.
Consumer staples companies and
those that can successfully adapt
their business to ecommerce could
TRUSTNET
Consumer staples
companies and those that
can successfully adapt their
business to ecommerce
could be the phoenix that
rises from the ashes
be the phoenix that rises from the
ashes. Investors who have done their
homework and chosen companies
with strong fundamentals should rest
easier in the knowledge that the best
businesses will eventually return to
form, says Samantha Owen, director at
Beckett Asset Management.
“As far as investments go, it seems that
established trends are being accelerated
by the current crisis,” she notes.
“Even before Covid-19, high
street shops were already under
pressure from ecommerce, while oil
companies were fighting a losing
battle against the long-term decline
in hydrocarbon consumption.”
Energy companies are facing unique
challenges – in April, the oil price
turned negative for the first time,
while the UK’s largest income-payer
Shell slashed its dividend for the first
time since the Second World War.
“A lot of companies are cutting
dividends to help them get through,
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