The environment for the pubs sector remains very subdued as worries over higher costs associated with a weaker pound on Brexit worries, and changes to the national living wage, have been exacerbated recently by unfavourable UK weather which has impacted on consumer sentiment.
Following recent disappointing trading news from All Bar One and Harvester pubs and restaurants owner Mitchells & Butlers PLC (LON:MAB), updates from sector peers Greene King PLC (LON:GNK) and Marston’s plc (LON:MARS) will be scrutinised closely, with both due on Thursday.
In a preview, Graham Spooner, investment research analyst at The Share Centre said there will be a considerable degree of interest in Marston’s latest figures given the recent signs of weaker consumer sentiment and some poor trading figures from peers.
He said: “The last update in October provided some reassurance for investors as it stated that sales and profits were expected to be ahead of last year with only a slight drop in the profit margin.
“The market will be focused particularly on the performance of the destination and premium pubs, the level of the dividend and any changes to the previously announced expansion plans.”
Meanwhile, George Salmon, equity analyst at Hargreaves Lansdown pointed out that the last news from Greene King – its AGM statement in September - wasn’t too encouraging.
He said: “We already knew that sales growth in the pub sector has been difficult to come by. However, with like-for-like sales falling by 1.2% in the first 18 weeks of the year, compared to a wider market decline of just 0.7%, it seems Greene King pubs are at the sharp end of this trend.”
Salmon added: “The decline is being driven by weaker food sales. If the group is to secure some much-needed momentum ahead of the all-important Christmas period, it’d be nice to see some signs of improvement here in Thursday’s half year results.”
No nasty surprises hopefully for Topps Tiles
Topps Tiles Plc (LON:TPT) has warned that its full-year profits will be at the lower end of the range of market expectations to avoid any nasty surprises ahead of the results on Tuesday.
The tile specialist in October said revenues for the year to 30 September 2017 were expected to fall to £211.6mln from £215mln last year.
Chief executive Matthew Williams blamed “tougher market conditions” for the weaker revenues and said the company was taking a “prudent view” for the year ahead.
The company has been taking steps to strengthen its position in the market through its so-called ‘Out-Specialising the Specialists’ strategy. Strategic initiatives have included improving its customer offering in online and stores, launching new tile ranges, offering a rewards loyalty scheme for traders and completing a takeover of a small commercial tile business.
Investors will be keen to hear more on the company’s strategy to overhaul the business in its full-year results.
Pennon to prove reassuring
British utility Pennon Group plc (LON:PNN) is expected to hike its interim dividend in line with its policy despite encountering a few hurdles in its waste management division Viridor.
The company, which also provides water services, plans to increase its dividend pay-out by 4 percentage points above the rate of retail price index inflation over the next 10 years.
But the main issue facing Pennon is its performance at Viridor, said George Salmon, equity analyst at Hargreaves Lansdown.
“Its PFI (private finance initiative) contract in Greater Manchester has been under pressure this year, while development of a facility in Glasgow has been disrupted by the challenges facing contractor Interserve.”
The Greater Manchester Waste Disposal Authority wants to exit its contract to recycle water and use some of it as fuel to generate electricity 17 years early. In its last update, Pennon said progress was being made on the final agreement with the authority.
“Recent updates have reassured investors, so we are hopeful of further progress towards resolutions,” said Salmon.
More details on Norwich factory closure expected in Britvic’s finals
Not too many surprises are expected from Britvic Plc’s (LON:BVIC) full-year results on Wednesday, with the drinks maker recently stating that revenue and operating profit expectations are on track.
Poor weather in the UK – which accounts for just over 40% of group revenue – might have dampened sales slightly in its home market in the final quarter.
The re-launch of Britvic’s iconic mixer range complete with new bottles has helped to boost sales of its carbonated drinks, although growth there has been offset by declining sales of its still drinks.
Analysts expect the rapid 11% like-for-like revenue growth seen in France in the third quarter to have turned negative in the final few months of the year, while trading conditions are also expected to have toughened in Brazil where it bought concentrates and juices business Bela Ischia Alimentos for £55mln earlier this year.
More details about the recent decision to close its factory in Norwich where it makes Fruit Shoots and Robinsons squash is also expected.
MailOnline to save Daily Mail once again
The MailOnline will be Daily Mail and General Trust PLC’s (LON:DMGT) saviour once again as the newspaper publisher continues to battle with a decline in print advertising and higher raw materials costs.
In a recent update for the 11 months to the end of August, DMGT said print advertising revenue for the Daily Mail and Mail on Sunday newspapers fell 11%. However, the MailOnline website saw advertising grow 22%.
Its Risk Management Solutions business, which targets the global property and casualty reinsurance industry, delivered flat revenue.
Overall, the newspapers group left full-year guidance unchanged in that statement, although it added that pre-tax profits would likely be at the lower end of market expectations.
Significant events expected:
Monday November 27:
Interims: Kainos Group PLC (LON:KNOS), Ramsdens Holdings (LON:RFX), Trakm8 Holdings (LON:TRAK)
Finals: Cerillion PLC (LON:CER), Patisserie Holdings PLC (LON:CAKE)
Economic data: US new home sales
Tuesday November 28:
Finals: Gooch & Housego PLC (LON:GHH), Greencore Group PLC (LON:GNC), ITE Group PLC (LON:ITE), Shaftesbury PLC (LON:SHB), Sanderson Group PLC (LON:SND), Treatt PLC (LON:TET), Topps Tiles Plc (LON:TPT), Urban & Civic PLC (LON:UNAC), UDG Healthcare PLC (LON:UDG)
Interims: Acal Plc (LON:ACL), BCA Marketplace PLC (LON:BCA), Cranswick plc (LON:CWK), D4t4 Solutions PLC (LON:D4T4), GB Group PLC (LON:GBG), IG Design Group PLC (LON:IGR), KCOM Group PLC (LON:KCOM), Pets at Home Group PLC (LON:PETS), Park Group PLC (LON:PKG), Scholium Group Plc (LON:SCHO), ULS Technology PLC (LON:ULS)
Economic data: Nationwide house price index; Bank of England Financial Stability report; US international trade in goods; US FHFA house price index; US Conference board consumer confidence
Wednesday November 29:
Trading updates: Eve Sleep Plc (LON:EVE), Softcat PLC (LON:SCT)
Interims: Findel PLC (LON:FDL), LondonMetric Property PLC (LON:LMP), Motorpoint Group PLC (LON:MOTR), Pennon PLC (LON:PNN), Redcentric PLC (LON:RCN), RPC Group PLC (LON:RPC), Telford Homes plc (LON:TEF), Versarien PLC (LON:VRS),
Finals: Brewin Dolphin Holdings PLC (LON:BRW), Britvic Plc (LON:BVIC), Impax Asset Management Group PLC (LON:IPX), ZPG Plc (LON:ZPG)
Economic data: UK consumer credit, mortgage approvals; US preliminary Q3 GDP; US pending home sales; US Beige Book
Thursday November 30:
Trading update: Go-Ahead Group PLC (LON:GOG)
Interims: Greene King PLC (LON:GNK), Paypoint PLC (LON:PAY), Torotrak plc (LON:TRK)
Finals: Daily Mail & General Trust PLC (LON:DMGT), Grainger PLC (LON:GRI), Marston’s plc (LON:MARS), On the Beach Group PLC (LON:OTB), Premier Asset Management PLC (LON:PAM)
Economic data: US weekly jobless claims; US personal income, consumption; Chicago PMI
Ex-dividends: To knock 1.3 points off FTSE 100 index (International Consolidated Airlines Group PLC (LON:IAG), Johnson Matthey PLC (LON:JMAT), Land Securities PLC (LON:LAND, Severn Trent PLC (LON:SVT)
Friday December 1:
Economic data: UK manufacturing PMI; US construction spending; US ISM manufacturing