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Persimmon and Boohoo will be in focus but Tuesday will be about Brexit

Parliament will finally vote on Theresa May's Brexit agreement, but, before that, Persimmon, BooHoo, Hays and Games Workshop will have announcements for the market.

Big ben, Brexit, Union Jack
All eyes will be Westminster on Tuesday

It is hard to imagine there’ll be much else on the markets mind other than Brexit as Tuesday progresses, though early doors there’ll be corporate news for investors to digest.

Housebuilder Persimmon and online retailer BooHoo will be among the highlights.

Meanwhile, in Westminster, the pivotal Brexit vote is slated to finally take place.

Its all about the Brexit vote 

Originally the vote was scheduled for December 11 but the prime minister postponed it after admitting she did not believe enough MPs would back her Brexit deal. But even with that delay, the UK continues to face the prospect of a ‘hard Brexit’ as MPs are still widely expected to reject May’s plan.

Many lawmakers, including dozens of May’s own backbenchers, have publicly said they would not support the deal over concerns about a backstop designed to ensure there was no return to a hard border for Ireland if a comprehensive free trade deal cannot be signed before the end of 2020.

Thus, with the UK set to leave the EU on March 29 and May’s Brexit deal on course to be defeated by a heavy margin, the risk of no-deal scenario is looking more likely.

Economists at ING expects the UK to apply for an extension to Article 50 if parliament rejects the deal.

Persimmon to deliver first update since Fairburn pay ‘distraction’

Blue chip Persimmon plc (LON:PSN) will provide its first update since the firm announced on 7 November 2018 that its chief executive Jeff Fairburn would be quitting the housebuilder following a backlash over his £75mln bonus package.

Fairburn stepped down at the end of 2018 with managing director David Jenkinson appointed as Persimmon’s interim chief executive until a permanent replacement is found.

The company said it had requested Fairburn resign as it believed the “distraction” around his pay continued to have a “negative impact on the reputation of the business” and on his ability to continue in his role.

In a separate third-quarter trading update, released at the same time, Persimmon said its private sales had risen by 3% year-on-year in the period from 1 July to 6 November 2018 as low borrowing costs continued to support demand.

The UK biggest housebuilder also said it was fully sold for the current year and had £987mln of forward sales reserved beyond 2018, up 9% on the same point last year.

Will Boohoo cry tears of joy or sorrow?

Online retailer Boohoo Group plc (LON:BOO) last month rushed to reassure investors that its trading remained strong after its shares slumped in a sector-wide decline following a shock profit waning from rival ASOS plc (ASOS).

The company said it saw record Black Friday sales and “continues to trade comfortably in line with market expectations.

Investors will find out whether Boohoo’s last statement rings true in a trading update for the four months to December 31, which is due to be released on Tuesday.

The Share Centre said investors will be looking closely at sales and any signs of discounting.

In September, Boohoo raised its revenue guidance for the year to growth between 38% and 43% from the 35% and 40% previously expected after record first-half sales and profits.

E-commerce retailers have performed better than most high street retailers recently as more consumers do their shopping online. ASOS proved that theory wrong, however, when it lowered its full year forecasts after weak trading in November.

Business confidence and Brexit is the issue for recruiter Hays

Ahead of Hays PLC’s (LON:HAS) second-quarter trading update analysts at UBS expect the company to post a 9% increase in like-for-like gross profit, in line with the previous quarter’s growth.

“This will be boosted by a 1% working day impact in Germany so therefore represents a slight deceleration vs. 9% in 1Q,” UBS said.

“We still expect Germany to report strong growth at +15% (stable sequentially on an underlying basis) and expect the UK to also be stable sequentially at +3%.”

In the first quarter, the group managed to deliver a 3% rise in like-for-like gross profit in the UK and Ireland where business confidence has fallen amid an unclear economic and political outlook. The UK and Ireland accounts for 24% of the company’s total gross profit but Germany is its biggest unit, representing 27% of the total.

Germany generated a 13% increase in like-for-like gross profit in the first quarter, slowing from the previous quarter’s 16% growth.

Games Workshop expected to (War) hammer home numbers

Games Workshop PLC (LON:GAW) is likely to cause few surprises with its interims on Tuesday, having announced the headline numbers in early December.

One new bit of information, however, will be the firm’s Christmas numbers which analysts at Peel Hunt are expecting to have a “continued positive theme”.

“Our recent visit to Nottingham illustrated that the business is in good shape, with clear momentum in products and facilities. The additional capacity will be in production shortly and take total sales capacity up to £350m” the City broker said.

In last month’s update the wargamer and owner of the Warhammer franchise said it expected sales to be around £124mln in the first six months of 2018/19 with operating profit likely to come in at some £41mln – in line with its view.

Significant announcements expected for Tuesday

Trading updates: Persimmon PLC (LON:PSN); ), Boohoo Group PLC (LON:BOO), Hays PLC (LON:HAS), Ashmore group (LON:ASHM), The Gym Group Plc (LON:GYM)

Interims: Games Workshop PLC (LON:GAW), Knights Group Holdings PLC (LON:KGH)

Finals: Elegant Hotels Group PLC (LON:EHG), Watkin Jones PLC (LON:WJG)

Economic data: US PPI data; NY Empire State manufacturing report

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