Mid-week will deliver another spate of interim results across several sectors, with bookmaker William Hill PLC (LON:WMH), commercial property landlord SEGRO PLC (LON:SGRO) and insurer Legal & General Group PLC (LON:LGEN) all due to report, alongside the release of the UK service sector PMI for July.
William Hill's half-year figures are unlikely to make for good reading. The FTSE 250-listed firm was hit by the shuttering of betting shops during the coronavirus pandemic lockdown as well as the stoppage of organised sport in the period.
However, there is likely to be much more interest in the company’s outlook now that sport has started to get going again, particularly football's Premier League and horse racing.
Investors are also likely to eye any news on how the company intends to use the £224mln it raised in June as the betting firm looks to cut down on its debt pile.
It will also be hoped that the bookie can maintain its forecast to generate positive cash flow in the second half of the year, however, the renewed surge in coronavirus cases in the US could prove a snag for its North America operations.
SEGRO to please with dividend
Investors eyeing SEGRO’s interim results will look at rental income, following £21mln of new lettings in June, although management did acknowledge that £15 million of rental payments had been deferred or reprofiled for an overall collection rate of some 82% by the end of May.
The vacancy rate will be another important one, which increased to 5.6% at the end of May from 4% in December.
Shareholders are expecting a first-half dividend of 6.9p per share, compared to 6.3p last year.
“Slough Estates has come a long way since its name change to SEGRO in 2007 and the real estate investment trust has long been seen as a winner in commercial property, thanks to its focus on warehousing and logistics and – in the UK – Greater London and Thames Valley, thanks to judicious asset disposals and acquisitions,” said Russ Mould, investment director at AJ Bell.
“The company’s six biggest customers by rental income are Deutsche Post, Amazon, Fedex, Royal Mail, Worldwide Flight Services and British Airways.”
Tough time for insurers
Legal & General Group’s half-year figures should show how the coronavirus pandemic has delivered a sharp blow to its capital reserves.
Analysts are still expecting modest dividend growth in the current year amid signs the company’s asset management and institutional annuities arms have continued to grow, however, the recent decline in the share price may indicate investors are concerned about the group’s outlook in the medium term.
There may also be eyes on the company’s debt pile, which given the lower capital reserves could put the dividend at risk and its ability to grow the business, the company’s housebuilding operation may also cause concern amid a slowdown due to social distancing and questions about demand.
Significant announcements expected on Wednesday August 5:
Interims: Legal & General Group PLC (LON:LGEN), William Hill PLC (LON:WMH), Coca-Cola HBC AG (LON:CCH), Ferrexpo PLC (LON:FXPO), Hastings Group Holdings PLC (LON:HSTG), PageGroup PLC (LON:PAGE), Morgan Sindall Group PLC (LON:MGNS), Hill & Smith Holdings PLC (LON:HILS), RHI Magnesita NV (LON:RHIM), Bank Pekao SA (LON:BPKD), IP Group PLC (LON:IPO), SEGRO PLC (LON:SGRO)
Economic data: UK services PMI, UK new car sales, US ADP employment data, US services PMI