Alongside updates and results from FTSE 350 names including drinks maker AG Barr, house builder Crest Nicholson, shower gel maker PZ Cussons and over 50s specialist Saga on Tuesday there will also be data on the UK’s labour market.
With the British labour market mostly working from home or furloughed, unemployment will be one of the big economic talking point in the week, with numbers for November reflecting the lockdown that month and expected to hit a five-year high.
Saga’s new chapter begins
Saga PLC (LON:SAGA) will provide a trading update on Tuesday after swinging to losses in the first half of the year and revealing a new strategy and £150mln fundraising in September.
Making a dramatic return to the boardroom as chairman , former boss Roger De Haan, son of the company’s founder, contributed a large chunk of the fundraising, as the over-50s holidays and insurance specialist was aiming to “return Saga to sustainable growth and restore significant shareholder value”.
Under De Haan and chief executive Euan Sutherland, who started just over a year ago, the strategy will be focused on five key pillars: resetting company culture; a “bigger, bolder” focus on digital and data; optimising experiences for customers; cutting costs; and reducing debt.
Since then, there have been more board changes, with the CEO of the insurance arm stepping down due to personal reasons, which was a bit of a concern to some investors as this business is currently the main contributor to the group’s cash flow as the travel business awaits the lifting of coronavirus (COVID-19) pandemic cruising restrictions.
The coming update will cover the period from the start of August into January so it will be interesting to see if the new leadership team has made much progress under the new strategy.
AG Barr may lack fizz
Irn-Bru maker AG Barr PLC (LON:BAG) is due to deliver a trading update, with investors likely to look closely at how the company has held up during the latest round of coronavirus pandemic-induced restrictions and the latest UK lockdown.
In its results for the six months to July 25, 2020, reported in September, the company reported a 19.4% rise in pre-tax profits and said it was “on course” to deliver a full-year performance in line with its expectations.
Given the recent new wave of COVID-19 infections and current lockdown, investors will want to see if this outlook can be maintained, as well as any changes to the company’s plans to reinstate its dividend this year.
UK labour data
The ILO unemployment rate is expected to rise above 5% in the three months to November for the first time since early 2016, before the Brexit referendum.
Ongoing job cuts are also likely be reflected in a further monthly drop in payrolls and a rise in the more timely claimant count rate, which hit 7.4% in November.
In his spending review announced in November, Chancellor of the Exchequer Rishi Sunak forecast that unemployment would continue to rise until peaking between April and June 2021 at around 7.5%.
“With an economic reopening now put back even further, probably into Q2 of this year at the earliest it is quite likely that further job losses will come in the weeks and months ahead, even if the government does come up with extra help in any March budget,” said market analyst Michael Hewson at CMC Markets.
Significant announcements expected on Tuesday, January 26:
Trading announcements: AG Barr PLC (LON:BAG), Saga PLC (LON:SAGA), DP Eurasia NV (LON:DPEU)
Finals: Crest Nicholson Holdings PLC (LON:CRST)
Interims: PZ Cussons PLC (LON:PZC), Quiz PLC (LON:QUIZ)
Economic data: UK unemployment