The coming week will bring updates and results from more blue-chip firms as companies (and the rest of the world) continue to grapple with the potential impact of the coronavirus on their outlook for the next year.
On the macro front, while the Bank of England has already delivered an emergency package of measures in the past week to cushion again the potentially “sharp and large” economic shock from coronavirus, including cutting interest rates to a historic low of 0.1% and an extra £200bn of bond purchases, the bank's monetary policy committee (MPC) still plans to hold its regularly scheduled meeting on Thursday.
With economists saying the MPC has pretty much gone all-in, there is not much more expected from Wednesday’s meeting, though the minutes from that meeting and the emergency meeting will be published on Thursday and may show if there are other plans in store.
Since then, the BoE and its banking regulatory arm have cancelled stress tests for the largest high street lenders as part of further measures to ease the strain on the economy from coronavirus.
Aside from the BoE, there will also be a selection of macro data across the week in the form of the UK’s inflation and retail sales data from last month, plus important and more timely March data from around the globe.
“The ongoing coronavirus outbreak will continue to dominate market attention next week, with Tuesday’s PMI releases from around the world likely to be the focus of investors,” said Deutsche Bank, giving a first look at the impact the coronavirus has had on industrial and services elements of the economy for Australia, France, Germany, Japan, the UK, US and EU as a whole.
“Unlike the February releases, this month they’ll fully encompass the period in which concerns about the virus had spread from Asia to the US and Europe, and will be closely watched as a result. The consensus estimates on Bloomberg show that economist are expecting a deterioration across the board, with the question being by how much.”
Kingfisher’s wings clipped
Ahead of its final results on Tuesday, Kingfisher plc (LON:KGF) has already notified of “immediate and significant measures” being taken across the group, as well as giving details of its liquidity situation.
Last Monday, the of DIY retail chains B&Q and Screwfix in the UK, said it had shuttered all its stores in France and Spain because of the coronavirus lockdowns there.
The company revealed it had cash of £250mls as at 13 March and access to undrawn bank credit facilities of £775mln, versus debt of £136mln or £2.5bn when including lease liabilities.
Investors will mainly be interested to hear if anything has changed with stores in the UK also likely to have to soon close their doors too.
Attention will also switch to the dividend, with the retailer perhaps choosing to follow others in cancelling its payout for the past year, even though analysts are looking for last year's level to be maintained.
Kingfisher, which is being relegated from the FTSE 250 this month after losing a third of its value over the past three years, has seen its market cap shrink another 41% so far in 2020.
Fevertree and AG Barr may lose some fizz
Fevertree Drinks PLC’s (LON:FEVR) finals on Tuesday may be a bearer of bad news as the hospitality sector has taken some of the hardest hits from the coronavirus outbreak.
The AIM-listed firm already predicted lower revenue in the US in the new financial year, as it planned to make heavier investments to build market share, but with many cities on lockdown it may get even worse.
The posh mixers maker disappointed investors with a profit warning in January due to softer trading across its markets, with the UK being especially weak.
Full-year sales rose 9.7% to £260.5mln (£237.4mln) compared to an earlier forecast of 12-13% growth.
Backing the brand has also affected margins, which will mean earnings for the year to 31 December coming in 5% lower than 2018.
Irn-Bru maker AG Barr PLC (LON:BAG) is also due to deliver its full year results on Tuesday, and while it is expected to have made some progress over the year this may be derailed by the coronavirus outbreak.
As people stay indoors and focus on only purchasing the essentials, fizzy drinks are unlikely to find their way onto shopping lists in most households, although it may be too soon to know just what the impact of the outbreak will be.
As a result, investors will be keeping a close eye on the company’s outlook statement for the rest of the year, whether volumes over the last few months have been impacted by the outbreak, and whether or not the company will follow the lead of other firms in suspending its dividend.
YouGov to break a long silence
On Tuesday, research firm YouGov PLC (LON:YOU) is releasing its interims which analysts at Peel Hunt expect to be “interesting”.
The company has not provided any comments on the current crisis, with the broker wondering whether it is because there has been limited impact, or perhaps it was holding off until the results.
“If we are worried by the direction of travel of advertising lead models, what will the
commentary be on the market research world - albeit online based?,” Peel Hunt said.
“Finally, the operational gearing that in normal times is such an attraction, may reveal its 'second edge'.”
United Utilities aims to keep a level head
With demand for water likely to either stay the same or rise as more people stay indoors, a standard pre-close trading statement from United Utilities Group PLC (LON:UU.) is unlikely to cause any fireworks for investors on Wednesday.
Lower interest rates are also likely to be good for the firm as it moves to reduce its debts, however one potential pitfall could be if coronavirus ends up hitting the company’s workforce.
With this in mind, the company’s outlook statement and any comment on cost reduction targets is likely to attract attention.
Has Bellway already been hit?
Bellway PLC (LON:BWY) is not expected to delve into a detailed outlook in Wednesday’s interims as the magnitude of the pandemic is still unclear.
The main focus for investors will be whether the coronavirus has already started denting trading.
Just over a month ago, the builder was looking forward to the traditionally strong spring season though it flagged pressure on construction cost across the wider sector.
As the firm has already reported interim revenues of £1.5bn, up 3% on last year, analysts at UBS expect operating profit of £298mln with margin 2% lower than last year at 19%.
EnQuest hopes to stay afloat amid oil price crash
Oiler EnQuest PLC (LON:ENQ) has seen its shares battered this month as an oil price war between Saudi Arabia and Russia has combined with expectations of demand reductions in the face of the coronavirus outbreak to pushed prices of crude steeply downwards with a barrel of the black stuff now worth less than half of what they were when the outbreak began.
With the company’s production costs per unit not far from the current oil price, investors are likely to focus on the group’s outlook statement when it reports its results on Thursday, as with large amounts of debt its survival could be in doubt.
Significant announcements expected for week ending 27 March:
Monday 23 March:
Finals: Pennant International Group PLC (LON:PEN), Quixant PLC (LON:QXT), Dunedin Enterprise Investment Trust PLC (LON:DNE), Medica Group PLC (LON:MGP)
Interims: Gfinity PLC (LON:GFIN), Orchard Funding Group PLC (LON:ORCH)
Tuesday 24 March:
Finals: Kingfisher plc (LON:KGF), AG Barr PLC (LON:BAG), Fevertree Drinks PLC (LON:FEVR), 888 Holdings PLC (LON:888), Burford Capital Limited (LON:BUR), Eve Sleep PLC (LON:EVE), Accesso Technology Group PLC (LON:ACSO), Alliance Pharma PLC (LON:APH), Cambridge Cognition Holdings PLC (LON:COG), Learning Technologies Group PLC (LON:LTG), Mears Group PLC (LON:MER), Pelatro PLC (LON:PTRO), Personal Group Holdings PLC (LON:PGH), S&U PLC (LON:SUS), STM Group Plc (LON:STM), Xaar PLC (LON:XAR), Zotefoams PLC (LON:ZTF)
Interims: YouGov PLC (LON:YOU), Essensys PLC (LON:ESYS)
Economic data: UK flash PMIs, BoE statement, US flash PMIs
Wednesday 25 March:
Trading announcements: Diploma PLC (LON:DPLM), United Utilities Group PLC (LON:UU.)
Finals: Moss Bros Group PLC (LON:MOSB), Ted Baker plc (LON:TED), Ergomed PLC (LON:ERGO), CloudCall Group PLC (LON:CALL), DP Eurasia NV (LON:DPEU), SDL Plc (LON:SDL), SpaceandPeople PLC (LON:SAL)
Interims: Bellway PLC (LON:BWY), Ricardo PLC (LON:RCDO), Applied Graphene Materials PLC (LON:AGM)
Economic data: UK inflation, UK PPI
Thursday 26 March:
Bank of England interest rate decision
Finals: Ebiquity PLC (LON:EBQ), Lamprell PLC (LON:LAM), Digitalbox PLC (LON:DBOX), Arbuthnot Banking Group PLC (LON:ARBB), Hilton Food Group PLC (LON:HFG), Impact Healthcare REIT plc (LON:IHR), Integrated Diagnostics Holdings PLC (LON:IDHC), International Public Partnerships Ltd (LON:INPP), Regional REIT Limited (LON:RGL), Secure Trust Bank PLC (LON:STB), Venture Life Group PLC (LON:VLG)
FTSE 100 ex-dividends to knock 9.3 points off the index: British Land Company PLC (LON:BLND), Royal Bank of Scotland Group PLC (LON:RBS), Pearson PLC (LON:PSON), British American Tobacco PLC (LON:BATS), Schroders PLC (LON:SDR), Prudential PLC (LON:PRU)
Economic data: UK retail sales, US GDP, US jobless claims
Friday 27 March:
Finals: Robinson PLC (LON:RBN), Applegreen PLC (LON:APGN), Uniphar PLC (LON:UPR)
Interims: CVS Group PLC (LON:CVSG)
Economic data: US personal spending