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April 2020

BARRATT & COOKE IS THE TRADING NAME OF BARRATT & COOKE LIMITED REGISTERED IN ENDLAND No. 5378036 REGISTERED ADDRESS: 30 FINSBURY SQUARE, LONDON EC2A 1AG

BARRATT & COOKE LIMITED IS AUTHORISED AND REGULATED BY THE FINANCIAL CONDUCT AUTHORITY Who are based at 12 ENDEAVOUR SQUARE, LONDON E20 1JN

5/4/18 1/7/18 5/10/18 1/1/19 5/4/19 1/7/19 5/10/19 1/1/20 5/4/20 FTSE 100 7200 7637 7319 6728 7447 7426 7155 7542 5416 FTSE All Share 3961 4202 4078 3675 4067 4057 3933 4196 2958 Dow Jones (US) 24505 24271 26447 23327 26425 26600 26574 28538 21053 S&P 500 (US) 2663 2718 2886 2507 2893 2942 2952 3231 2489 Nikkei 225 (Japan) 21645 22305 23784 20015 21808 21276 21410 23657 17820 PIMFA Balanced 1538 1597 1578 1484 1610 1632 1643 1679 1389

A United World at War As I start to pen this Newsletter late into the night of 6th April I am somewhat stunned to hear that Boris Johnson has been admitted to the Intensive Care Unit at St Thomas’ Hospital. Let’s hope that his resolve helps see him through his personal battle. We are praying for you ‘Bojo’. We currently face the greatest humanitarian crisis in modern times and I am conscious that client investments play ‘third fiddle’ in priority to health and, as social beings, our freedom. Frankly, this period of lockdown is at best miserable and at worst terrifying; however many of us who live in the countryside are at least fortunate enough to have gardens. Hopefully when you have finished reading this newsletter (who knows I might get some more readers due to boredom), I will have allayed your fears about your investments in order that you can focus on the more important facets of life. I have quoted her before but Dame Julian of Norwich (1342-1416) lived through the Black Death and is thought to have self-isolated during the subsequent plagues. She, having had a vision from God, is quoted as saying “All shall be well”. I don’t claim to have the strength of faith of Dame Julian but I do gain some solace from her words of optimism at a time of such despair, when one third of Norwich’s population had succumbed to the bubonic plague. Rumi, the Persian scholar who lived in the century before Julian, wrote “This too shall pass”. He has subsequently been quoted by many, most famously Abraham Lincoln, in a speech as unrest was building ahead of the US civil war. The coronavirus crisis will also “Pass” and “All shall be well” in the end; but the question is when and at what cost, primarily in terms of life but also livelihood? Markets, at a time like this, seem so irrelevant yet as investments often make up such a large proportion of a client’s wealth and importantly generate

Growth Equities

Higher Yield Equities

Mid-Cap Equities

Overseas Equities

Collective Investments

Bunzl Croda Diageo Experian Halma Intertek Smith & Nephew Spirax-Sarco

Admiral BATS BP National Grid Reckitt Benckiser Rio Tinto Severn Trent Unilever

Avast Dechra Diploma Domino’s Pizza Fevertree Hill & Smith Rotork UDG Healthcare

Adyen Amazon Becton Dickinson Church & Dwight Ecolab Novo Nordisk PepsiCo Visa

Fidelity European Values IT Henderson Smaller Companies I/T HICL Infrastructure I/T Impax Environmental Mkts IT Polar Cap Technology I/T Scottish Mortgage I/T Smithson IT Trojan Global Income Fund

BARRATT & COOKE IS THE TRADING NAME OF BARRATT & COOKE LIMITED REGISTERED IN ENGLAND No. 5378036

BARRATT & COOKE LIMITED IS AUTHORISED AND REGULATED BY THE FINANCIAL AUTHORITYwho are based at 12 ENDEAVOUR SQUARE, LONDON E20 1JN

CONDUCTREGISTERED ADDRESS: 30 FINSBURY SQUARE, LONDON EC2A 1AG

much of their income we must consider the knock on effects of this tragic disease. A disease that has penetrated all corners of the globe and means that we stand side by side with our fellow seven billion citizens on earth. Coronavirus the global spread I know that you are aware of the facts but in order to appreciate the speed at which this terrible disease has taken hold I list a timeline of events, entirely focused on COVID-19. Of course other significant events have taken place but I’m sure Sir Keir Starmer won’t mind me failing to dwell on his appointment and it is a welcome change not to discuss Brexit. 31st December 2019 – It is announced by the World Health Organisation (WHO) that a previously unknown virus has been identified which is behind a number of pneumonia cases in the city of Wuhan, central China. 1st January 2020 – Wuhan authorities ban the trade of live animals at all wet markets as it is alleged that these markets are the source of the virus and where the cross contamination to humans occurred. 7th January – The new virus is formally identified as a coronavirus, a respiratory virus similar to SARS (Severe Acute Respiratory Syndrome). 11th January – The first death from coronavirus is reported in China. 13th January – The first case of coronavirus is reported outside China in Thailand (the tourist had recently been in Wuhan). 23rd January – Wuhan, the largest city in Hubei province with a population of over eleven million, is put into lockdown. 30th January – WHO declares a “public health emergency of international concern”. 2nd February – The first coronavirus related death outside China is reported (in the Philippines). 7th February – Incredibly sadly the Chinese ‘whistle-blower’ Doctor Li Wenliang, who had sought to make his contacts aware of the existence of the virus in its early days, dies. (It remains unclear how reliable the Chinese numbers are). 11th February – WHO announced COVID-19 as the name for this new disease. 14th February – The first virus related death due in Europe is reported (France). 19th February – A large outbreak of the virus in Iran occurs, including a significant number in their parliament. 21st February – An extensive outbreak of the virus in Northern Italy is reported. 28th February – The first British citizen dies of COVID-19 (A passenger on the Diamond Princess cruise ship). 29th February – The first death in the US is reported. 3rd March – A significant outbreak of the virus in Spain makes the headlines. 9th March – Italy goes into lockdown. 11th March – WHO declares the outbreak a pandemic. 12th March onwards – The pandemic gathers momentum with New York becoming the latest epicentre and Italy and Spain the hardest hit in Europe. The contagion of the disease seems almost impossible to supress as the number of cases and deaths spiral out of control. There are considerable concerns for less developed countries where social distancing is all but impossible and access to healthcare very limited (in the UK the doctor per capita is 350 whereas in India it is 1,500 and in Africa 5,000).

Coronavirus UK spread and Governmental action 22nd January – Public Health England (PHE) moves its risk level from “very low” to “low” as Heathrow begins to screen arrivals from Wuhan. 29th January – The first two British nationals test positive for coronavirus in York whilst an aeroplane evacuating Britons from Wuhan touches down at RAF Brize Norton (remember the pictures of the bus drivers with no PPE). 6th February – The ‘super-spreader’ who contracted the virus in Singapore and stopped off in a European ski resort is reported to have caused 11 further cases in the UK. 10th February – Matt Hancock, Secretary of State for Health & Social Care, empowers doctors to quarantine individuals who are COVID-19 positive. 23rd February – British Nationals who are COVID-19 positive on the Diamond Princess cruise ship are repatriated. 26th February – Global sporting events begin to be cancelled with the Australian Grand prix and the Ireland v Italy Six Nations rugby match the first to fall. 28th February – As above the first British victim dies (on the cruise ship). 4th March – The first victim on UK soil dies as British positive cases breach 100 whilst 81 countries around the world now have the virus. 10th March – Nadine Dorries, a junior health minister, is the first MP to test positive. 11th March – The Conservative party release their first budget since the landslide election win. However, having only been in office for a few days, Rishi Sunak’s only coronavirus initiative is to announce £12bn of emergency fiscal stimulus to help the UK deal with what is now classified as a pandemic. 16th March – The first 5:00pm daily press briefing is staged. Prime Minister Boris Johnson asks everybody in the UK, where possible, to work from home and avoid pubs and restaurants to help the NHS cope. 17th March – Rishi Sunak launches Government backed loans of at least £330bn alongside £20bn of tax breaks as he pledges to deliver ‘whatever it takes’ to keep companies and households solvent (the term ‘loan’ worries me). 18th March – It is announced that schools will close on Friday (two days time). Having previously warned that 55,000 could be infected Sir Patrick Vallance, Chief Scientific Advisor to the Government, informs us that it would be a “good outcome” if the UK death toll is kept under 20,000. 20th March – Prime Minister Boris Johnson closes all pubs, restaurants and gyms. Meanwhile, in order to further support the economy, Chancellor Rishi Sunak announces a scheme known as furloughing where employers affected by COVID-19 can apply for a grant that covers 80% of employees’ usual monthly wage, capped at £2,500 per month. The lack of support for the self-employed caused confusion but was subsequently rectified. 22nd March – Downing Street states that if the Prime Minister were to become incapacitated Dominic Raab would stand in. Although he may not have the leadership qualities of Boris Johnson, I felt Dominic Raab did a reasonable job as Brexit Secretary and he does at least have a boxing blue from Oxford. How sad that just two weeks on Raab is now holding the baton as Johnson lies in intensive care.

23rd March – Lockdown begins. The Prime Minister announces that people are to stay at home for all but four reasons; essential work travel, essential purchases, medical needs and exercise (but only with members of the household). This is to be reviewed after three weeks. 24th March – We are told that the ExCel London exhibition and convention centre will be turned into a temporary critical care hospital named NHS Nightingale with plans to role this out to further venues. 25th March – The first two NHS doctors are reported to have tragically died from COVID-19. 26th March – Total UK deaths reach 500 and we witness the daily increase in excess of 100. The whole of Britain claps for our heroes, the NHS, at 8:00pm replicating scenes in Italy. 27th March – Boris Johnson and Matt Hancock test positive for COVID-19 while Chris Whitty, Chief Medical Adviser to the Government, goes into self isolation (we had seen them standing within a “2 metre Peter” (Crouch) on our televisions). 29th March – With the total number of UK deaths having reached 1,000 Dr Jenny Harries, the Deputy Chief Medical Officer, indicates that it could be six months before life returns to normal. 1st April – At last our NHS staff start to be tested but only 2,000 out of a 1,200,000 workforce. It is widely publicised that the UK is woefully short on testing, personal protection equipment (PPE) and ventilators. This is the one area that the Government did not appear to have been particularly transparent on and was probably seeking to prevent panic. 2nd April – Matt Hancock commits to a five pillar testing plan, pledging to deliver 100,000 tests a day by the end of April. 5th April – For just the fifth time (with the exception of her annual Christmas message) in a 68 year reign, Her Majesty Queen Elizabeth II addresses the nation, a poignant moment for families across the land on a Sunday evening. And yet, soon after, Boris Johnson is admitted to St Thomas’ hospital as his symptoms from COVID-19 deteriorate. Meanwhile we have seen the Great British public at their absolute best with 750,000 people signing up as the ‘volunteer army’ to support the NHS. Furthermore, companies and schools, with 3D printers, have been making everything from facemasks to ventilators. Moreover children have been painting rainbows and teaching their parents how to wash their hands. Sadly a few, however, demonstrated the absolute worst of human traits, selfishness, as supermarkets were raided and tins of food and loo roll stockpiled (no wonder they need both – very greedy indeed). I hope they have bought so much they have to eat kidney beans for the rest of their life! You may or may not feel that the Government has taken proportionate and sufficient action, hindsight can fuel us to be more critical in the knowledge of what has subsequently occurred, but the timeline demonstrates the speed with which this virus has taken control. There have been other medical dangers in recent memory, such as SARS, Ebola and Zika, which have not required UK action. It remains unclear as to whether China has presented the correct numbers but with the speed of the contagion since COVID-19 reached Italy and the Six Nations clash between Italy and Scotland was cancelled, ahead of the fixture on 7th March, Parliament, advised by the scientists and medics, perhaps could have moved more rapidly. There does appear to have been a U-turn on ‘herd immunity’, although I feel this simply wasn’t articulated particularly well in the first place. For three weeks, we have been in a period of absolute lockdown for the vulnerable and over 70’s and strict social distancing for everyone else (although most of us adhere to the practices of our seniors). I do understand the concept of not wanting to ‘lock people in their homes’ for too long but we do find ourselves in a war and the UK has a particularly high population density. However, the spectrum from boredom to, sadly, serious mental health stresses are far lesser burdens than the ultimate sacrifice. Having been in isolation for almost three weeks now, we will soon see if the scientific strategy and slogan is working:

“Stay at home – protect the NHS – save lives”.

“Stay at home – protect the NHS – save lives”.

We all understand the principal behind the flattening of the curve; well, all bar Jack Grealish, Kyle Walker and the disgraceful Catherine Calderwood, Scotland’s former Chief Medical Officer. It is unacceptable for anyone to breach the rules but when you are the face of Government adverts or ‘footballing icons’ choosing to post videos on social media pleading for people not to go out this really is hypocrisy of the highest order. We face an extended period of uncertainty and fear, waiting for the answer to the seemingly unanswerable question: when will the shackles be lifted? We tune into the television at 5:00pm every afternoon waiting for that glimmer of hope. But what is good news? A fall in the number of deaths from 800 to 600? This is still the number in a large school chapel or the stalls in a good size theatre. Bar war and terrorist atrocities, not since the Titanic have we witnessed such tragedy so quickly. It is the speed at which the virus has taken control that has been integral to the problem. No doubt in time questions will be asked about why our infrastructure, specifically ventilators and PPE, wasn’t up to the standards of others in the first place? I guess the answer is there is only so much money to go around and not long ago we were asking Parliament why soldiers were being sent to war without their equivalent of doctor’s face masks. What has been the impact on Markets? As with health, it is this speed that has been the real problem for equity markets. During 2019 ‘risk investors’ lived in the “land of milk and honey” as share prices rose to all time highs, dividends were secure, property prices were within touching distance of their peak and Brexit was finally in motion. Then, like the Titanic, the iceberg appeared from almost nowhere and the invisible killer obliterated market confidence, causing the most brutal global sell off in living memory. To put it into context, the 2008 banking crisis saw the FTSE 100 fall 3,200 points (47%) over 20 months; the coronavirus pandemic triggered a 2,440 point drop with 33% wiped off the index in just 5 weeks. In terms of the topography of the FTSE 100 chart this is the difference between climbing down the Great Pyramid (139m) and abseiling off Big Ben (96m). Such extraordinary problems require extraordinary measures and the Chancellor Rishi Sunak has promised to:

“Do whatever it takes” In a crisis we always learn a new term. In the banking crisis it was quantitative easing and this time the Exchequer, through the process of furloughing, is taking on 80% of the salary for anybody who has effectively been made temporarily redundant. This is an unprecedented level of support to households for both the employed and now the self-employed. Moreover, he is trying to prop up businesses with lifeboat funds and loans, some of which will no doubt default as not all companies will be able to turn the taps back on with success. The Chancellor is doing his utmost to ensure a normalised life now but this burden will have to be unwound eventually and therefore it is likely that higher taxes and recessionary times lie ahead. Yet on balance he is absolutely correct to prioritise health and food on the table now. The Bank of England has also tried its best to stimulate the economy with monetary policy. Sadly, having been in an ultra-low interest rate environment since the 2008/9 financial crisis, a reduction in interest rates from 0.75% to 0.1% has offered little respite. In addition to the emergency rate cuts, the Bank of England has also restarted its quantitative easing program through the buying of Gilts and certain Corporate Bonds. They plan to buy £200bn, bringing their total holding to £645bn. Gilt yields consequently reached record lows in early March, with the yield on 50 year Government Bonds falling to 0.3%.

Portfolio Performance In these newsletters we generally avoid discussing portfolio performance since, though similar, all bespoke client portfolios are different due to varying attitudes to risk and investment objectives. However, in this extraordinary time I feel it appropriate to provide some information as to how the investment team at Barratt and Cooke has performed, seeking to put your mind at rest. During the six month period since 5th October 2019, the middle 85% of discretionary client portfolios are down between -8.9% and -16.6% which compares to indices as below: Benchmark indices: 05/10/2019 05/04/2020 % Change FTSE 100 7155 5416 -24.3% FTSE All Share 3933 2958 -24.8% FTSE Gov’t All Stocks UK Gilt 193.6 195.4 +0.9% FTSE AIM All Share 863.3 659.3 -23.6% PIMFA Balanced 1643 1389 -15.5% PIMFA Conservative 1384 1233 -10.9% PIMFA Income 1495 1282 -14.2% PIMFA Growth 1699 1403 -17.4% Other indices: FTSE 250 19480 14099 -27.6% FTSE 350 3988 2997 -24.8% FTSE UK I-L Gilts All Stocks 750.6 707.4 -5.8% Dow Jones 26574 21053 -20.8% S&P 500 2952 2489 -15.7% NASDAQ Composite 7982 7373 -7.6% Nikkei 225 21410 17820 -16.8%

Looking deeper into our FTSE 100 exposure and performance during this period, we hold significant positions for clients in 13 of the 20 best performing companies and just 2 of the worst 20. In addition weightings to Gilts, Corporate Bonds, Gold, Infrastructure and Cash have provided a degree of buoyancy to portfolios. Furthermore, our Foreign Equity exposure and associated currency movements have also assisted performance on a relative basis. To provide a further generic statistic, we are fortunate that this unprecedented fall came on the back of a good 2019 and putting portfolio capital values in context they now generally sit within a few percentage points of the January 2019 value, just 15 months ago. Stock decisions Technically speaking, the current price of a share should reflect the present value of discounted future cash flows or, in simple English, share prices should reflect the current value of the company’s worth based on its future prospects. Though we always consider past performance, since one can learn from a history of good corporate governance and sensible capital allocation decisions, during a crisis it is important to reassess the merits of any individual investment ‘now’ i.e. whether we would choose to buy the holding ‘today’. It is important that we are considered in our analysis and are prepared to sell some favoured positions as the outlook changes. Below I give some illustrations: Carnival (Cruise ship operator) SOLD (small loss): We purchased this holding at a price of circa £35. It fitted in with a number of themes that we thought would help underpin growth such as a falling oil price, a business benefitting from an ageing and generally wealthy population whilst holidays are typically aspirational and therefore tend to be more robust than more general ‘discretionary spend’. We were looking forward to a long period of good performance with Carnival which additionally paid an attractive dividend.

Coronavirus changed the outlook when the Diamond Princess cruise ship was marooned with customers locked up in their rooms. One reporter referred to the boat as a “floating petri dish”. Whilst it is never desirable to sell at a loss we disposed of the holding for all discretionary clients at £27.11 which, in our view, failed to discount the material deterioration in the outlook for the company. They now stand at £6.14 per share. Compass (Food services) HELD (down 40% since January): Compass supplies the food and staff to sporting events, airlines and schools. Clearly demand has fallen due to cancellations and closures although they do also supply prisons and hospitals where demand remains robust. The Compass share price also fell sharply in the coronavirus rout. On analysing the company we felt that the valuation had slid too far to warrant sale on a future prospects basis. When social distancing is revoked we believe Compass will immediately see increased demand for their supplies. As such we felt the company was worthy of its place in portfolios in the expectation that the share price will bounce. Intercontinental Hotels (Hotel operator) SOLD (considerable profit): We purchased shares in Intercontinental Hotels over a long period of time, during which they rose and rose and rose. We had already, in certain circumstances, reduced exposure since we were becoming nervous of the impact of technology on the sector, specifically the emergence of the Airbnb offering. With COVID-19 likely to restrict the movement of people we sold the remaining holding at £46.57 for discretionary clients, which reflected a substantial premium to cost. The shares now stand at £28.41. Ecolab (Health & Hygiene services) BOUGHT: Ecolab is a global leader in water and hygiene solutions with customers including leading fast moving consumer goods companies (such as PepsiCo) and NHS Trusts and schools. This is a stock we had been monitoring for some considerable time, not least due to their market leading position and long record of shareholder returns which includes 28 consecutive years of dividend growth. Though the company may see some short term reduction in demand for their products, with the share price falling sharply we took the view that the ‘coronacrisis’ sell off provided an opportunity to initiate a position in a company we expect to hold in client portfolios for some considerable time. Further Analysis At the moment traditional fundamental analysis tools such P/E (price to earnings) ratios, price to book and enterprise value to EBITDA (earnings before interest, tax, depreciation and amortisation) have ‘gone out of the window’ as the current uncertainty means it is almost impossible to predict the earnings number with any confidence. We often talk about Barratt and Cooke portfolios being full of ‘quality’ holdings as opposed to ‘value’ (discounted perceived bargains) and it is this quality which has underpinned performance. Quality holdings – these are companies that we believe have the potential to outperform the market over time and typically display the following characteristics:

- Grow faster (either by revenues and/or profits) than the market average - Have market leading positions in structurally growing sectors - Have prodigious cash generation and low leverage/debt - Deliver high returns on capital employed and margins - Have an experienced and sensible management team - Demonstrate a strong track record of consistently growing profits

Examples: Amazon, Diageo, Estee Lauder, Colgate Palmolive, Intertek, Kimberly Clark, Unilever, RELX and Reckitt Benckiser. Value holdings – these are companies that are perceived to be trading below their intrinsic value and therefore, hopefully, provide a superior return from a valuation rerating. Value stocks tend to display the following characteristics:

- Trade at a discounted valuation compared to the market average and to historic and peer group averages

- Trade below the company’s net asset value - Are expected to generate returns from a valuation uplift, rather than reliable profit growth

- Pay dividend yields which are usually higher than the market average, however dividend cover is often much lower (putting dividends at risk)

Examples: BT Group, Centrica, ITV, Imperial Brands, Morrison (Wm) and Tesco. Observationally, while supermarket trolleys have been stacked very high, since Christmas (i.e. before the coronavirus panic hit the UK) the share prices of the supermarkets have actually fallen. This illustrates the ‘quality’ versus ‘value’ debate where the rise in volumes does not necessarily mean a rise in share price for the supermarket. Whereas Kimberly Clark (Andrex loo roll), Colgate Palmolive and Reckitt Benckiser (cleaning products e.g Harpic) all stand at a similar value to 24th December 2019 despite the negative market momentum. Anecdotally, I was delighted to hear that the major supermarket chains will be paying their staff special bonuses. Income stress The analysis above focuses on capital share price performance but clearly the state we find ourselves in is also going to have detrimental ramifications for portfolio income. I am only too aware of the hardship a loss in cashflow will cause both charities and individuals who use their income to subsidise everyday life. We take this need for cash flow incredibly seriously. Those that have income requirements will be aware that we have never been advocates of a total return mandate. We have remained steadfastly resolute in our advice that “income is income and capital is capital”, at times to the client’s frustration. This has however meant that every client has become used to an appropriate and realistic level of cash-flow. Moreover, clients have not chipped away at capital to top up ‘yields’ in the good times (an easy thing to do in a rising market but is less desirable now), which in turn means that the capital pot has continued to grow. Of course, on an ad hoc basis capital may have been used to ease a stress on cash flow or to pay for specific projects. With so many companies under operational stress (thank goodness we don’t own pub companies or restaurants chains), it is likely that portfolio income is going to fall quite considerably this year. Equity investors, are ‘risk investors’ (albeit that portfolios sit at the lower end of equity risk) i.e. clients benefit if a company in which we invest does well so as investors, when UK plc shuts down, we should not expect to receive a generous return. I’m afraid portfolios are going to feel a bit of ‘income pain’ now but to what extent is unclear. The entire banking sector (our most underweight position relative to the market) has cut dividends to 0% as ‘suggested’ by the Bank of England. Other companies have followed suit such as: DS Smith, Bunzl, Hill and Smith, Domino’s Pizza and there are plenty more reductions to come. In fact, thus far, 81 companies in the FTSE 350 have already said that they will cut income distributions. Holders of the newly launched Fund Portfolio Service are likely to see a lesser fall in income stream as many of the underlying Investment Trusts have large dividend reserves which can be used to smooth out payments in difficult times. If you would like to have a conversation with your advisor to seek a short term solution by withdrawing some capital locked in before the market slide (most accounts have a good size cash weighting) please speak to them, this might be the year (or two) to take a little capital that you have kept invested for all those years whilst you did not employ a total return mandate. Please note: The projected dividend income on valuations will not be accurate this year as this is taken from our live price feeds and we cannot change this. The yield is always calculated as last year’s dividend (a factual number) as a function of price, this is ordinarily conservative as dividends tend to grow year on year, but not this year. The ‘double whammy’ oil sector review (Will Mellor) Though before my time, many clients will remember the 1973 and 1979 oil crises which essentially emanated from the Middle East, with the global supply of oil being reduced substantially and prices rocketing. It was unthinkable that such a situation would occur again but we have perhaps just witnessed the opposite extreme with the oil price (Brent Crude) falling from $64 to $25 during Q1 2020.

With the majority of airlines now grounded and many economies in lockdown, the global demand for oil will have fallen sharply in this period, which itself puts pressure on pricing. However, a proposed deal between Saudi Arabia and Russia to cut production collapsed in early March, with Saudi Arabia responding by increasing production whilst it is commonly expected that other ‘petro-states’ (i.e. Nigeria) will also have followed suit and increased production in order to manage their public finances. In response to the significantly lower oil price environment many major oil companies are cutting their capital expenditure and focussing on existing production facilities; anecdotally BP has reduced its 2020 capital expenditure by around 25% to $12bn including the deferral of exploration and appraisal activity in an attempt to preserve liquidity. It is noticeable that in recent updates by both BP and Royal Dutch Shell there was no mention of changes to dividend policy, but should oil prices remain depressed for a prolonged period of time it would seem almost inevitable that dividends may have to be rebased in order to protect already relatively indebted balance sheets (BP due to the Gulf of Mexico; RDSB following the acquisition of BG’s gas assets). We entered 2020 with ‘underweight’ exposure to the oil sector (relative to the FTSE 100) albeit acknowledge that the significant reduction in share prices in the sector on an absolute basis has been unwelcome. However, despite the threat to dividends, as in the 1970’s there will eventually be a truce to the price war. Moreover, the reduction in capital expenditure during this downturn will create ‘supply bottlenecks’ in the future which should ensure the oil price eventually reverts to economic levels, albeit we may not have seen the bottom yet. Office Infrastructure and processes (Miles Piercy) As the operational implications of COVID-19 started to become apparent in mid-February, our focus turned towards how we could best protect our team, whilst being able to offer full continuity of service to our clients. In this regard, as many of you will know, either through our recent email update or perhaps following a conversation with us, we are pleased to confirm that we remain fully operational, in what has been a very challenging and fast-changing environment. We have retained a core team, of just eight people, split between two offices, to deal with the daily paperwork that must be administered, whilst all remaining staff (42 people) are successfully working from home. Due to this, we are able to perform all functions, and continue to be able to answer all questions and queries – our ultimate aim is that clients do not see a difference in service levels; we believe and hope, that this has been, and will continue to be, the case. Of course, we have had to change certain processes, such as the way we communicate with you, whereby we now favour e-mails, rather than paper. We would therefore like to thank all clients for their understanding and for embracing the change with us, it has been a remarkable shift in the way that we conduct our business. We have raised several operational challenges previously, but to ensure we reach as wide an audience as possible, we highlight them again below:

• Funds - Please could you send bank transfers rather than cheques (where amongst other processes one of our staff then has to physically take the cheque to the bank). Your advisor, or a dealer, can provide our bank details.

• Please be aware that at some stage certificated dealing might have to cease, temporarily.

• We would be grateful if you could liaise with your advisor by telephone or e-mail rather than

letter (e-mails are not deemed timely instructions and can occasionally get stuck in our email filters and so should not be relied upon for time sensitive instructions such as dealing). You can contact your advisor by visiting our website at: https://www.barrattandcooke.co.uk/our-team

• Whilst there are a handful of employees in the office, it is not open for meetings, dropping

off paperwork or execution-only dealing (if you would like to deal, please telephone our dealers on 01603 624236).

Be wary of financial scams (Miles Piercy) Due to the incredible challenges being faced by all of us at this time, it is no surprise that, on a national basis, attempted scams and frauds are on the increase, as it is easier to manipulate people during times of uncertainty. It is therefore vital that now, more than ever, you remain vigilant to protect yourself from such attempts. We are not simply highlighting the threat from an individual impersonating your bank, or investment manager, rather we also want you to be aware of approaches made from anyone you have dealings with. With this in mind, in addition to standard financial scams, we have also heard of people receiving emails from contacts such as their doctor, the kennels etc. asking them to review a document, or similar. Whilst these will all contain varying degrees of risk, they are all none the less attempts to commit a fraud against you. You should therefore follow these simple steps to help protect yourself:

• Treat all unexpected calls, emails and text messages with caution. Don’t assume they’re genuine, even if the person seems to know some basic information about you.

• Don’t be pressured into acting quickly. A genuine bank or financial services firm won’t mind waiting if you want time to think.

• If you are approached, do not simply return the call on the telephone number given – independently look up the correct number.

• A professional firm will not change their payment details during a transaction; if you receive notice of this, telephone the business to confirm.

We want all of our clients to remain safe at this time and hope the above helps. Final Thoughts Once the virus has passed there are serious questions to be asked of China. Viruses know no borders and international laws must be invoked to stop the grim practices both in wet markets and laboratories, otherwise I’m afraid greenhouse gases will be the least of our children’s concerns. I know this newsletter has been much longer and much drier than usual but, at such a catastrophic time for the human race, puns are hardly appropriate. We are witnessing the most uncertain time of my, or indeed my father’s, generation where gradually we are being numbed by the reported tally of daily deaths. I do feel, however, that under the guidance of our statesman leader Boris Johnson (we pray for his recovery), with the help of Matt Hancock and the excellent Rishi Sunak, we stand in good stead to continue the fight. I believe Dominic Raab will prove a better deputy than he is being given credit for and at least he does not seem to be driven by hubris. This team are of course aided by the Chief Medical Officer, the Chief Scientific Advisor and their deputies; let us be clear it is these professionals who are driving the majority of the decisions rather than the politicians themselves. The collaboration between all these people in a cohesive unit will see us through. Thank goodness we are not governed by a one man band in Donald Trump who seems to think he, himself, is a doctor with his blind and unerring advocacy of the drug Chloroquine (for Malaria), which medical experts say is unproven in the fight against COVID-19. Day by day Trump continues to be unveiled as a total fraud, simply driven by self-promotion. Conclusion Living in the middle of nowhere it seems a little strange clapping on a Thursday night as we salute our NHS hero’s but we shall not be moved from this action until the coronavirus fight is over. Whilst many have been furloughed we know at Barratt and Cooke how lucky we are to be able to continue to work in order to serve our clients. The operational changes have been extraordinary and I must extend my sincere and grateful thanks to all my fellow employees here. As Miles has said, I hope you haven’t noticed an iota of a drop in the level of service. Incidentally I’m sure CWLB (who is fit and

REGULATORY DISCLAIMER: This newsletter is provided solely to enable clients to make their own investment decisions. The information within this newsletter does not constitute advice or a personal recommendation, or take into account the particular investment objectives, financial situations, or needs of individual clients. It may therefore not be suitable for all recipients. If you have any doubts as to the suitability of this service, you should seek advice from your investment adviser. The past is not necessarily a guide to future performance. The value of investments and the income from them can fall as well as rise and investors may get back less than they originally invested. Certain Investment Trusts will permit using gearing as an investment strategy. Gearing is a strategy which involves borrowing money to increase holdings of investments or investing in warrants or derivatives. Such a strategy is likely to result in movements in the price of the relevant security being amplified significantly and may be subject to sudden and large falls in value and investors may get back nothing at all. Any tax rates and reliefs are those currently applying, are dependent on individual circumstances, and could be subject to change. All estimates and prospective figures quoted in this newsletter are forecasts and are not guaranteed. Within our advisory service we offer advice on a wide range of investments including shares, corporate bonds, gilts and managed funds. Within the RDR our advisory service is recognised by the FCA as a ‘restricted’ service as we do not offer advice on the whole of the financial planning market which includes products such as life policies and personal pension schemes. Barratt and Cooke is the trading name of Barratt & Cooke Limited. Registered in England No. 5378036. Barratt & Cooke Limited is authorised and regulated by the Financial Conduct Authority, who are based at 12 Endeavour Square, London E20 1JN.

SOURCE: Proquote and FTSE International Limited (‘FTSE’) © FTSE 2020. ‘FTSE®’ is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under licence. All rights in the FTSE indices and /or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and /or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

sends his best wishes from total isolation) and I weren’t the only two people who on hearing the term “furlough” wondered if ‘he’ was a horse who won the Derby in 1871! We have all had to make sacrifices. My personal one is insignificant, having swum the length of England in the pool over the winter it looks increasingly unlikely that my channel venture will take place but I live in hope. If that is my biggest concern, along with penning this newsletter, I will be very very lucky indeed. We need to thank our heroes in the NHS, the carers, the delivery drivers, the supermarket workers the list goes on but let’s not forget the ‘newly qualified’ home teachers who with the help of online learning materials from school have sacrificed work and everyday life in favour of mortar boards and chalk (or the modern day equivalent) to educate our children – thank you Hannah. Our Netflix viewing at home has been The Crown and therefore to see the ‘real’ Queen talk on Sunday night was quite reassuring. Obviously, she witnessed the Second World War but this is our generation’s turn to put up with significant adversity, it is our WAR but in time;

“This too shall pass” and “all will be well”. Indeed I hope you all are safe, remain strong and keep smiling. Stay well. WJB 5/04/20

REGULATORY DISCLAIMER: This newsletter is provided solely to enable clients to make their own investment decisions. The information within this newsletter does not constitute advice or a personal recommendation, or take into account the particular investment objectives, financial situations, or needs of individual clients. It may therefore not be suitable for all recipients. If you have any doubts as to the suitability of this service, you should seek advice from your investment adviser. The past is not necessarily a guide to future performance. The value of investments and the income from them can fall as well as rise and investors may get back less than they originally invested. Certain Investment Trusts will permit using gearing as an investment strategy. Gearing is a strategy which involves borrowing money to increase holdings of investments or investing in warrants or derivatives. Such a strategy is likely to result in movements in the price of the relevant security being amplified significantly and may be subject to sudden and large falls in value and investors may get back nothing at all. Any tax rates and reliefs are those currently applying, are dependent on individual circumstances, and could be subject to change. All estimates and prospective figures quoted in this newsletter are forecasts and are not guaranteed. Within our advisory service we offer advice on a wide range of investments including shares, corporate bonds, gilts and managed funds. Within the RDR our advisory service is recognised by the FCA as a ‘restricted’ service as we do not offer advice on the whole of the financial planning market which includes products such as life policies and personal pension schemes. Barratt and Cooke is the trading name of Barratt & Cooke Limited. Registered in England No. 5378036. Barratt & Cooke Limited is authorised and regulated by the Financial Conduct Authority, who are based at 25 The North Colonnade, Canary Wharf, E14 5HS.

SOURCE: Proquote and FTSE International Limited (‘FTSE’) © FTSE 2020. ‘FTSE®’ is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under licence. All rights in the FTSE indices and /or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and /or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

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Source: Proquote