It’s been a challenging period for transport operator Stagecoach Group PLC (LON:SGC), which is due to report its half-year results on Wednesday.
The buses and trains operator, however, was given a recent boost after the government unveiled a raft of measures designed to improve and extend the UK’s rail network.
One of those plans is to replace Stagecoach’s loss-making East Coast franchise – which has weighed on the group for a while – earlier than expected in 2020, with the two parties looking to renegotiate the terms of the current onerous contract until then.
Analysts reckon there’s almost no way the new, short-term contract can be worse than the current one, so look out for some more detail and guidance with the results.
Last year Stagecoach benefitted from an unexpectedly low tax rate, which isn’t expected to carry over into this year and could be another burden on profitability, so traders will no doubt earmark that for closer inspection as well.
Keep an eye out for rising wage costs too, which US bank JP Morgan highlighted back in October when its analysts chopped back their price target for Stagecoach.
Luxury gap could be narrowing for Mulberry
Mulberry Group PLC (LON:MUL) delivered a 21% increase in full year pre-tax profits back in June, supported by growth in online sales and the success of new products, and shareholders are hoping the luxury bag maker interims on Wednesday will also please.
The company made pre-tax profit of £7.5mln in the year ended 21 March 2017, compared to £6.2mln a year earlier. Revenue rose 8% to £168.1mln from £155.9mln the prior year, with 19% growth in online sales.
Like-for-like retail sales were gained 1% in the 10 weeks to 3 June, with UK like-for-like sales up 2%, as an increase in tourist spending in London offset softer domestic demand, and this trend is likely to have continued with a push into Asia also eyed.
In July, Mulberry announced a joint venture to develop retail, digital, omni-channel and wholesale business in the Japanese market, having earlier this year unveiled joint ventures aimed at the China, Hong Kong and Taiwan markets.
Significant events expected on Wednesday December 6:
Interims: Mercia Technologies PLC (LON:MERC), Mulberry Group PLC (LON:MUL), Plastics Capital Plc (LON:PLA), Stagecoach Group PLC (LON:SGC), SysGroup PLC (LON:SYS), Tricorn Group PLC (LON:TCN)
Finals: easyHotel PLC (LON:EZH), Image Scan Holdings Plc (LON:IGE), Numis Corporation PLC (LON:NUM), Oxford Metrics PLC (LON:OMG), Redhall Group PLC (LON:RHL), RWS Holdings PLC (LON:RWS)
Economic data: BRC shop price index; US ADP employment report