Barclays Capital thinks that Wednesday’s first quarter trading update from blue chip leisure giant Whitbread plc (LON:WTB) could be a positive catalyst for the shares.
Back in April, strong growth from its core coffee and hotel brands helped Whitbread post a solid rise in full-year profit and revenue, broadly in-line with market expectations, although it remained cautious on the year ahead.
READ: Whitbread posts solid growth in profits, revenue, but stays cautious on year ahead
The group’s Premier Inn hotels chain saw full-year total sales growth of 9.0%, with like-for-like sales up 2.3%, helping underlying operating profits rise by 7.4% to £468mln..
Its Costa Coffee chain reported total sales growth of 10.7%, with UK like-for-like store sales up 2.0%, driving a 5.3% increase in underlying operating profits to £158mln.
In a preview of the latest update, BarCap forecasts 2.8% growth in the key RevPAR (revenue per available room) industry metric for Premier Inn, with its UK retail sales growth running at 1.0% in the March-April period.
The broker added, for Costa, assuming a similar outperformance as seen in the fiscal fourth-quarter of last year, it would forecast the coffee chain’s like-for-like sales increasing by 1.6%, but after more conservative industry data in May it is estimating more moderate growth of around 1.0%.
Meanwhile, allowing for a more challenging May, and based on the same underperformance as in the last quarter, BarCap is forecasting around 0.5% like-for-like sales growth for Whitbread’s pub restaurants in the first quarter.
Berkeley Group finals eyed
Aside from Whitbread, housebuilder Berkeley Group Holdings PLC (LON:BKG) will also be a focus as its posts full-year results.
Back in March, in a trading update, Berkeley said it expected its full-year profits to be at the top-end of analysts’ forecasts, and added that the housing market in London and the South East had stabilised after last June’s initial Brexit vote shock, although underlying sale reservations were lower.
READ: Berkeley sees profits at top-end as London, south-east market stabilises post-Brexit vote
But given this month’s unexpected, and uncertain general election result, and the start of negotations with the European Union over Brexit, investors will be keen to hear Berkeley’s views on the outlook now for itself and the UK housing industry.
Significant events expected on Wednesday 21 June:
Trading statements: Whitbread plc (LON:WTB)
Finals: Berkeley Group Holdings (LON:BKG); Hornby Plc(LON:HRN); Immunodiagnostic Systems Holdings PLC (LON:IDH); Sirius Real Estate Ltd (LON:SRE)
Interims: Wynnstay Group plc (LON:WYN)