The coming week will see a number of trading updates and results from the market’s big hitters including Primark owner AB Foods, stock market operator LSE and consumer goods giant Unilever.
There will be some batches of macroeconomic data for investors to keep an eye on, including the UK’s unemployment and inflation figures as well as more US jobless claims.
Stateside, earnings season kicks in with 88 of the S&P 500 this week reporting on trading in the first quarter of 2020, including Netflix, Coca-Cola, AT&T, Philip Morris and Intel.
AB Foods to update on Primark woes
Associated British Foods PLC’s (LON:ABF) interims on Tuesday follows four updates on trading as well as Friday’s announcement that the FTSE 100-listed firm is eligible to access state emergency funds.
The first half, ending on 31 March, is not likely to have been majorly affected by lockdowns, which were enforced towards the end of that month.
In fact, the consensus for earnings per share is 62.5p against 61p a year ago.
The owner of Primark, expected to lose £650mln in monthly income, is unlikely to provide guidance for the remainder of the year.
Investors are looking to hear on expenses reduction at Primark so far, what its stock levels are like and expectations for markdown.
Another question is whether other business segments remain unaffected by the pandemic, as AB Foods has been claiming so far.
As of 2 April, the conglomerate had £1.7bn in the bank, which UBS called “a strong balance sheet”.
AB Foods has been increasing its dividend since 2000 though analysts expect a fall this year, as the pandemic bites earnings.
The distribution is expected to drop to 38.35p from 46.35p in 2019.
LSE looks to ride out market turmoil
Amid the turbulence in the markets, investors in London Stock Exchange Group PLC (LON:LSE) will be looking to see how the increased dealing activity has affected its businesses when it delivers a first-quarter update on Tuesday.
The exchange operator was picked out by Berenberg earlier this month as one of the firms whose financial have remained broadly unaffected by the pandemic, so hopes are likely to be that this will continue and whether management has taken any additional to make sure this remains the case.
One potential snag could be the outbreak delays LSE’s acquisition of Refinitiv, so any updates on the progress of the purchase are also likely to be welcomed.
How hard has it been for boohoo?
Boohoo Group PLC (LON:BOO) is releasing its finals on Wednesday, where investors are looking to hear on new year guidance and whether overseas growth continues to outstrip the UK.
Eyes will be peeled for the margins: even pure-play online retailers have been suffering during the pandemic.
Competitor ASOS reported a 20-25% fall in sales since lockdowns began, although analysts at Peel Hunt suggest it may have been as high as 50% in the initial ‘shock’.
“We have taken a 25% sales fall over the next three months and held growth flat for the following three,” the broker commented in relation to boohoo.
“Costs could be reined-in harder, but we assume boohoo will choose to maintain a strong platform for autumn.”
CRH results eyed for context on economic slowdown
Building materials firm CRH PLC (LON:CRH) is due to update on its first quarter performance on Wednesday.
With the sector’s profitability often tied to the health of the global economy, the numbers will be viewed as something of a proxy for US and European construction activity in the first part of 2020.
As CRH has good cash generation and a strong balance sheet, it is expected to be relatively well placed to withstand the disruption from the pandemic.
As a result, any comments on how coronavirus has impacted the business and could erode this cash balance are likely to be looked at closely.
Unilever hopes to retain defensive credentials
As something of a defensive stock in times of trouble, Unilever’s portfolio of everyday essentials has meant it has held up relatively well amid the current turmoil as consumers still need the basics despite the coronavirus lockdown.
With its first-quarter trading update due on Thursday, investors will be keeping an eye on the company’s dividend, which is expected to be increased by 9% this year although they will also be eyeing the company’s South Asian business to see if a slowdown there has continued.
The decrease in sales in the region will also be watched closely for any impact it may have on Unilever’s sales forecasts after the group said it still expects to achieve growth at the lower end of the 3-5% range it has guided for.
Meanwhile, there may also be interest in any progress being made in the review of the company’s tea business, which includes brands such as Lipton and PG Tips, after the group hung up the ‘for sale’ sign for the division at the end of January.
Was scrapping the dividend worth it for Meggitt?
Meggitt PLC (LON:MGGT) is publishing a trading update on Thursday.
Investors may have been bracing themselves considering the FTSE 100-listed group’s exposure on aerospace, one of the hardest hit sectors by the coronavirus pandemic.
The manufacturer scrapped its dividend late last month alongside other cost-cutting measures, which investors will want to hear updates on.
The market is eager to know how the quarter has panned out, and perhaps how plans to build medical ventilators for the NHS are developing.
Taylor Wimpey to update on cost-cutting measures
Like many housebuilders, Taylor Wimpey PLC (LON:TW.) has been forced by the virus lockdown to shut all of its constructions sites and sales offices, as well as slashing costs to preserve cash.
Though a statement was made at the start of April, there should be a quarterly trading update on Thursday, where there should not be many surprises about trading up until the lockdown.
It’s unlikely that the company can say much more than it has already, with no visibility on the outlook.
In a wider note on the housebuilding sector, broker Liberum said the companies have “learned the lessons of the GFC well and came into this crisis with strong liquidity positions”, which have been strengthened for all but one company scrapping their dividends, while some have qualified for the government’s corporate finance fund.
“We estimate that the companies now have sufficient liquidity to last from 12 to 92 months without revenue,” Liberum’s analysts said.
Macro matters
Some UK data in the coming week will provide some indication of how the coronavirus pandemic is hitting the economy, such as employment claimant numbers on Tuesday, and retail sales and ‘flash’ purchasing managers index (PMIs) on Thursday.
Others, such as Tuesday’s headline unemployment numbers and inflation figures on Wednesday, were collected before the lockdown came into effect.
While the headline UK labour market figures will refer to the three months to February, the claimant count provides a measure of the number of claims from the Department for Work and Pensions and, as it covers March, will capture the period when the UK went into lockdown.
The DWP has already said that it processed 0.95mln applications for universal credit between 16-31 March and 1.4mln since then, compared to 0.1mln claims “in a comparable period during normal time”, though not all these claims of income support were necessarily for unemployment.
Claimant numbers could, therefore, be pushed to around 2mln from 1.25mln last month and the claimant count unemployment rate to around 5.5%, economists at RBC Capital Markets said.
The flash PMIs on Thursday follow a reading last month that showed a drop in the composite UK PMI to 36.0 in March, more than three times bigger than its previous record decline to below its low-point in the 2008/09 recession.
As the UK announced its lockdown later than most other euro area peers, the April PMIs should be especially important for providing a fuller picture of the impact on activity, RBC said.
Pantheon Macroeconomics expect the flash composite PMI to fall to a new record low of about 32.0 in April.
“The pace of decline in output will eventually ease off. But the PMIs are strongly influenced by business sentiment, which surely worsened in April,” said Pantheon.
UK retail sales data will refer to the five weeks from the start of March to 4 April, reflecting the closure of most shops on 24 March.
Pantheon estimated a 15% hit during the lockdown, pointing to a 5% decline for month-to-month growth in sales volumes.
Other major macro news from around the world in the coming week includes the People’s Bank of China’s rates decision, various PMI and consumer confidence reports, and US jobless claims, capital goods and durable goods orders.
Significant announcements expected for week ending April 24:
Monday 20 April:
Trading announcements: BHP Group PLC (LON:BHP), Polymetal International PLC (LON:POLY)
Finals: Pennant International Group PLC (LON:PEN)
Tuesday 21 April:
Interims: Associated British Foods PLC (LON:ABF), Egdon Resources Plc (LON:EDR)
Finals: Card Factory PLC (LON:CARD), Sumo Group PLC (LON:SUMO), LiDCO Group PLC (LON:LID), ASA International Group PLC (LON:ASAI), Calisen PLC (LON:CLSN), Filta Group Holdings PLC (LON:FLTA), Flowtech Fluidpower PLC (LON:FLO)
Trading announcements: London Stock Exchange Group PLC (LON:LSE), Segro PLC (LON:SGRO), Centamin PLC (LON:CEY), Integrafin Holdigns PLC (LON:IHP), Jupiter Find Management PLC (LON:JUP), Quilter PLC (LON:QLT)
Economic data: UK unemployment
Wednesday 22 April:
Trading announcements: CRH PLC (LON:CRH), Antofagasta PLC (LON:ANTO),
Finals: Boohoo Group PLC (LON:BOO), Fevertree Drinks PLC (LON:FEVR), JTC PLC (LON:JTC), RTW Venture Fund Limited (LON:RTW), XLMedia PLC (LON:XLM)
Interims: AB Dynamics PLC (LON:ABDP)
Economic data: UK inflation
Thursday 23 April:
Trading announcements: Unilever PLC (LON:ULVR), Meggitt PLC (LON:MGGT), Taylor Wimpey PLC (LON:TW.), Relx PLC (LON:REL), Anglo American PLC (LON:AAL), Tullow Oil PLC (LON:TLW), Gear4music Holdings PLC (LON:G4M), AJ Bell PLC (LON:AJB),
Finals: Walker Greenbank PLC (LON:WGB)
FTSE 100 ex-dividends to knock 3.4 points off the index: Legal & General Group PLC (LON:LGEN), Spirax-Sarco Engineering PLC (LON:SPX), Antofagasta PLC (LON:ANTO)
Economic data: UK retail sales, UK flash PMIs, US jobless claims, US flash PMIs
Friday 24 April:
Trading announcements: Rotork PLC (LON:ROR), Science Group PLC (LON:SAG)
Economic data: US Michigan consumer sentiment