Keywords Studios, Next and Trainline in market spotlight on Thursday

Keywords, Next and Trainline are among the notable names in Thursday's diary, meanwhile, Snowflake makes a high profile IPO over in the United States.

Keywords Studios PLC - Keywords Studios, Next and Trainline in market spotlight on Thursday

Keywords Studios PLC (LON:KWS) and the gaming sector saw a meaningful during lockdown, and that’s likely to come through in its interim results on Thursday.

The video game services group may have seen some costs from the remote working rise, with areas like game testing potentially struggling due to the lack of a secure environment, however underlying sales have already shown an 8% increase in the period, indicating that demand remains solid.

Shareholders are likely to focus on the company’s margins and cash preservation measures given the potential for rising costs, as well as how it plans to move forward in the long term.

A £100mln fundraise in May added some extra wherewithal for the acquisitive group to come through the pandemic with more deals.

June later saw Keywords pick up Coconut Lizard, a technical and creative services provider, in a deal worth up to £2mln and in August it added games creative marketing agency Maverick Media, paying up to £3.6mln.

As the group’s valuation continues to soar, to around £1.68bn presently, investor attention will look for further commentary on strategy.

Is Next delivering its profit promise?

Next PLC (LON:NXT) is releasing its interim on Thursday, which should not come as a huge surprise as the retailer said in July full price sales in the second quarter were down 28% against last year, a far better than expected result and an improvement on the best-case scenario given in the April trading statement.

Management guided full year profit before tax at £195mln based on its central scenario, which analysts expect to be delivered although the winter may come with a drop in demand in case of a second lockdown.

The market is wondering whether sales in the Childrensware and Homeware categories will continue to support margins now that stores are back open and shopping habits are returning to something like normal.

“Retail bellwether Next is a cash cow that even with a collapse in the high street consistently manages to deliver free cash flow,” said Neil Wilson at Markets.com.

“The pandemic has proved more challenging – suspending buybacks and dividends, and selling off assets have been required to shore up the balance sheet this year. But it remains a resilient company able to generate pre-tax profit.”

All aboard Trainline’s interim update

Trainline PLC (LON:TRN) half-year trading update on Thursday will be welcome by investors after a four-month long silence following its February year-end results in May.

Since then, transport usage has started to return as lockdown measures have been eased, but the market will want to know whether any shift to online purchases of advance tickets, instead of via the ticket machines on the day at stations, helps mitigate any of the falls in volume.

“Also, as fewer people are going to the office on a daily basis, will we see an increase in advance tickets from previous season ticket commuters? Another thing that might help to offset some of the volume decline,” Peel Hunt noted.

Thursday 17 September

BoE rate decision

Trading announcements: Trainline PLC (LON:TRN), IG Group Holdings PLC (LON:IGG)

Finals: Clinigen Group PLC (LON:CLIN), Kier Group PLC (LON:KIE), Duke Royalty Limited (LON:DUKE), Supermarket Income REIT PLC (LON:SUPR), Thinksmart Limited (LON:TSL), Wilmington PLC (LON:WIL)

Interims: Next PLC (LON:NXT), Spire Healthcare Group PLC (LON:SPI), Keywords Studios PLC (LON:KWS), Oxford Biomedica PLC (LON:OXB), Hilton Food Group PLC (LON:HFG), Playtech PLC (LON:PTEC), Safestyle UK PLC (LON:SFE)

FTSE 100 ex-dividends to knock 0.21 points off the index: Intertek Group PLC (LON:ITRK)

Economic data: US jobless claims

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