Cineworld in the spotlight as gossip points to buyout

Also on Tuesday's agenda are construction PMI figures and a trading update from Ferguson

Cineworld Group plc - Will Cineworld confirm speculations over plans to go private?

On Tuesday the spotlight will fall on Cineworld Group plc (LON:CINE), where recent plot twists have included short-sellers and speculation that it may be taken private.

City chatter indicates the Anglo-American cinema chain may bid farewell the London Stock Exchange if the share price, now trading at near five-year lows, continues to plunge.

Analysts at Canccord Genuity suggested that this “could be the catalyst” for chief executive Mookie Greidinger's family to take the business private.

The shares are the most shorted in the City, with 18% of the stock out on loan as hedge funds bet on a further plunge.

The market is still not sure whether last year’s £2.7bn acquisition of American cinema chain Regal was a sensible move, considering the sector has been struggling to drag consumers out of the comfort of their home where they can enjoy cheap and convenient streaming services.

The FTSE 250-listed firm's trading update will reveal whether Hollywood blockbusters have come to the rescue as hoped, after it said earlier this summer it was looking for a revenue boost from the recently released ‘Frozen II’ and the launch of ‘Star Wars IX: The Rise of Skywalker’ just before Christmas to reach its year-end target after Regal’s box office intake dropped 18% in the first half.

A strong cinema offering would improve momentum but investors are unlikely to forget about the US$3bn debt pile plus the US$3.6bn in lease commitments.

Consensus projections point to a 6% revenue dip year-on-year, with the US and UK down by 5% to 6%, while adjusted underlying earnings are seen remaining flat at US$1.1bn.

Is another surprise coming from PMI data?

The third day of December comes with the monthly data on the IHS Markit/CIPS construction PMI, expected to dip to 44 from October’s 44.2.

The figures may be better than these pessimistic forecasts, as happened at the manufacturing data at the start of the week.

Such an improvement is rather bittersweet as it is mostly due to bleak forecasts, with both sectors depressed by the current economic and political uncertainty.

Ferguson plumbing US markets

Rather than UK economic data, plumbers’ merchant Ferguson PLC (LON:FERG) is more focused on the US economy these days but will face scrutiny when it updates shareholders on tricky times in its businesses on both sides of the Atlantic, with a possible demerger on the cards too.

Former US boss, Kevin Murphy took over from long-time chief executive officer John Martin in November, as the company shifts gears to focus on its largest market, the US, while spinning out the low-margin UK segment, known as Wolseley.

But market watcher Richard Hunter at Interactive Investor has raised concerns that planned demerger could “add further distractions and cost in what could be a challenging economic time in the company’s core US market over the next year”.

So, all eyes will be on progress in the US, which looks large enough to retain a FTSE 100 listing by itself but is on unstable footing lately because of trading slowdowns, as well as mixed economic data coming out of the world’s largest economy.

Shares have eased a little after reaching a year-high over 7,000p last week.

Be Hyve

No big surprises are likely from Hyve Group PLC (LON:HYVE), which changed name from ITE Group in September, as it already set the full-year scene in October’s trading update.

The events company said in October it expects full-year revenues to come in at £219mln, 7% ahead of 2018.

In the final results, investors will be keen to read about the next stage of the new strategy, with broker Peel Hunt commenting: “finessing the cost structures and converting top line growth to even better rates of growth at the net level would be a cornerstone of further share price appreciation.”

Significant announcements expected for Tuesday December 3:

Finals: Gooch & Housego PLC (LON:GHH), Hyve Group PLC (LON:HYVE), Image Scan Holdings Plc (LON:IGE), Oxford Metrics PLC (LON:OMG),

Interims: Collagen Solutions PLC (LON:COS), Consort Medical PLC (LON:CSRT), Falanx Group Limited (LON:FLX), Ramsdens Holdings PLC (LON:RFX), Solid State PLC (LON:SOLI), Tekmar Group PLC (LON:TGP), Uls Technology PLC (LON:ULS)

Trading announcements: Ferguson PLC (LON:FERG), Cineworld Group plc (LON:CINE), Wizz Air Holdings PLC (LON:WIZZ)

Economic data: UK Construction PMI, US Auto sales

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