Analysts are looking for Loungers PLC (LON:LGRS) to have delivered further strong like-for-like sales growth in the opening few months of its new financial year when it reports its maiden set of annual results on Wednesday.
Much of last year’s performance is already known after a June update in which the café-cum-bar-cum-restaurant operator revealed that like-for-like sales rose 6.9%, while total revenues were up by more than a quarter.
Instead, investors’ attention will turn to how things have fared so far in the 2020 financial year, which runs until the end of April.
According to Peel Hunt’s calculations, Loungers has hiked food prices by 2.9% and drink prices by 2.1% over summer – bigger raises than usual.
“As this represents just six months, there should be a larger price component to lfl sales in 2020E, with a follow-on benefit to gross margins,” said analysts.
“LFL sales should also benefit from the introduction of the Big Lounge Breakfast, at £11.95 vs £7.65 for a Lounge Breakfast.”
Diploma hopes for pick up in seals market
A third-quarter trading update from FTSE 250 technical products group Diploma PLC (LON:DPLM) on Wednesday will likely have some investors on edge to see if the company’s previous warnings of slower activity in the industrial seals market have turned out to be accurate.
The situation may carry extra weight after the group acquired gasket and fluid seal supplier Virginia Sealing Products for £56mln in July.
The group’s new chief executive Johnny Thomson, who started in February, has also raised the prospect of more acquisitions in the second half, so investors will look to see if the CEO is still sniffing around for more purchases.
Travel holds the key for WH Smith
A pre-close trading update on Wednesday from newsagent WH Smith PLC (LON:SMWH) will likely once again see investors focus on the group’s airport business as it continues its shift towards travel retail and away from its declining high street stores.
Nearly one year after the group acquired US airport retailer InMotion for £155mln, investors will be looking to see if things are still moving in the right direction, while tough trading conditions mean sales on the high street are likely to continue their decline alongside more store closures.
Major announcements due on Wednesday August 28:
Finals: Loungers PLC (LON:LGRS)
Interims: Arix Bioscience PLC (LON:ARIX), Headlam PLC (LON:HEAD)
Trading statements: Diploma PLC (LON:DPLM), WH Smith PLC (LON:SMWH)
AGM: Collagen Solutions PLC (LON:COS)
Economic data: UK BRC Shop Price Index, US MBA mortgage applications