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The Markets
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Proactive UK has moved.
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The Markets
by Proactive
Proactive UK has moved.
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The Markets
by Proactive
Proactive UK has moved.
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Go to Proactive UK

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Will City toast Wetherspoons after referendum?

Pub chain set to report on any impact on consumer confidence of the referendum vote

Investors will probably be keen to know how EU referendum economic uncertainty has affected JD Wetherspoon plc (LON:JDW) when the pub chain reports finals on Friday.

The market is likely to focus in particular on any outlook comments from chairman Tim Martin, who was vociferous in backing a Leave vote.

Numis Securities expects the group to report flat full-year earnings per share.

Current 2016/17 guidance is for like-for-like sales in line with inflation, a 4% rise in wages and a 1% increase in costs, which the broker said implied more margin pressure.

Analyst Tim Barrett said: “Bulls expect price increases to reverse recent negative earnings momentum but we remain cautious.”

Meanwhile, Europe is likely to come out of the immediate post-‘Brexit’ referendum period best when recruitment group SThree Plc (LON:STHR) updates on trading.

Analysts are tipping the company to report a 10% decline in UK net fees in the third quarter following the outcome of the vote on June 23.

Ironically, continental Europe is likely to be the strongest performer, turning in an estimated 10% rise in fees as the Leave result sent the pound spinning downwards.

At group level, Numis forecasts an underlying net fee decline of 1%, but with about 75% of net fees outside the UK, an FX tailwind could lead to reported fee growth of about 4%.

The broker’s Steve Woolf said: “Ultimately, we see scope for FX-led forecast earnings upgrades, but the underlying trading risk remains on the downside, in our view.

“The shares have underperformed significantly in the past three months as a consequence of the sharp post-Brexit vote reaction, but are largely in-line with the market in the past month, and look up with events for now.”

Elsewhere, model train and Scalextric maker Hornby Plc (LON:HRN) may update on its restructuring when it holds its annual general meeting.

In June, the company dropped into the red and said it was raising £8mln in a share issue, cutting its European business and reducing product lines bv 40%.

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