Wednesday will bring results and trading updates from the housing, retail and utility sectors among others.
There will also be some eyes on the macro calendar as the UK delivers its latest set of inflation figures.
Berkeley braces for profit hit
Berkeley Group Holdings PLC (LON:BKG), the FTSE 100-listed housebuilder, will publish preliminary results for the year to end-April and dividends are likely to be in focus.
The last update was way back in late March, just days after the UK coronavirus lockdown, when the group warned that the disruption from closing construction sites would affect the final six weeks of its financial year.
Annual profits were expected to be “in the region of £475mln”, having said only weeks earlier that it was “on track” to meet previous expectations of around £555mln.
Two weeks earlier the board cancelled a promised £500mln of special returns, saying it would revert to its old plan and pay a £125mln dividend at the end of March, with plans to return another £140.1mln to shareholders by September 30 through a combination of share buy-backs and dividends.
At that point, it had an excess of £1bn of net cash when discounting the March payout.
With house prices and demand levels as the market reopens the big unknowns, analysts at JPMorgan Cazenove recently said their preference was for stocks with solid returns and strong balance sheet, such as Berkeley.
Is Boohoo in fashion for the summer season?
Boohoo Group PLC (LON:BOO) is releasing an update for the quarter to May, the first in its financial year.
Investors want to see if the online fashion retailer managed to maintain the good sales seen in April, which were actually up year-on-year, following a slump at the onset of the coronavirus lockdown.
There will be particular attention on discounts, as margins come under pressure in the increasingly competitive sector.
In a preview, Hargreaves Lansdown pointed out that international expansion is the key to future success for the AIM-listed giant.
“Coronavirus means there may be some disruption in the near-term, but investors should keep a lookout for any information about future expansion plans, or expectations, across the pond,” said analyst Hargreaves' Sophie Lund-Yates.
“News at the end of May that boohoo bought the remaining 34% stake in Pretty Little Thing means the spotlight will be shining on the smaller brand. boohoo’s existing 66% stake recorded a 37% rise in sales for the full year. To help fund the deal boohoo issued new shares, diluting current shareholders – to that end investors will be hoping PLT’s numbers are still, well, pretty.”
SSE eyed for dividend news
Energy company SSE PLC’s (LON:SSE) dividend will be in the spotlight when it reports full-year results on Wednesday.
The energy provider, which sold its domestic retail business to OVO in January, said in March that it expected a full-year payout of 80p per share but cautioned that the timing and amount could be reconsidered if circumstances change.
“It’s at times like this when utilities should show their true might,” said analysts at Hargreaves Lansdown in a preview. “While other sectors face low to zero earnings and dividends have disappeared en masse, it should be largely business as usual for companies tasked with keeping the lights on and water flowing in the UK.”
There are not many surprises expected in the full-year results, though water utilities have recently noted that some business customers were failing to pay bills.
SSE said electricity demand had been holding up during the early part of the coronavirus crisis but power demand has dropped over lockdown due to lower business demand.
With earnings per share guided to the lower end of an 83p-88p range, dividend cover remains somewhat unconvincing, said the Hargreaves analysts, though the group recently raised €1.1bn from a bond issue.
“We’ll have to wait and see if this is in fact the intended use of that extra cash.”
Significant announcements expected for Wednesday:
Trading updates: Boohoo Group PLC (LON:BOO), Hill & Smith Holdings PLC (LON:HILS), Origin Enterprises PLC (LON:OGN)
Finals: SSE PLC (LON:SSE), Kingfisher PLC (LON:KGF), The Berkeley Group Holdings PLC (LON:BKG), Enteq Upstream PLC (LON:NTQ), Severfield PLC (LON:SFR), Wincanton PLC (LON:WIN)
Economic data: UK inflation