Thursday should have plenty of company news for investors to chew over, including Ocado, Fevertree and Gym Group, before the Bank of England policy decision later in the day.
This comes a day after the US Federal Reserve revealed a major upgrade in the economic outlook and a slight change in the 'dot plot' of expected future policy changes, with four policymakers seeing a possible interest rate increase in 2022.
Talk of a move to negative interest rates has gone a little quieter at Threadneedle Street in recent weeks.
“The bank will be sending some important messages to the market and most of them are likely to be hawkish, but they will be wrapped with dovish tone," said Naeem Aslam, chief market analyst at Avatrade.
"Firstly, the bank needs to set the record straight that there will be no need for negative interest and the market players need to eradicate those expectations. Secondly, the bank will need to embrace the remarkable progress on the vaccine front, and how that has improved economic health. Finally, the governor is also likely to show his appreciation in terms of support from the fiscal side, and its influence on economic recovery.
"Despite all these positive aspects, the reality is that the UK is still far from reaching full economic recovery as the full impact of covid-19 is still unknow, and the economy hasn’t opened yet. In addition to that, the unemployment rate has been kept low artificially through government support, and it will be only when the government will begin to withdraw its support.
Ocado delivery
Ocado Group PLC (LON:OCDO), one of the FTSE 100’s rare tech stars, zooms in with a trading update on Thursday, having last month reported a fivefold reduction in losses last year but warned that the outlook for 2021 was very much dependent on how coronavirus restrictions are eased.
This uncertainty affected the wider tech sector as pandemic winners were sold off around the world, with Ocado’s shares down over a quarter from recent highs.
For the current year, the company’s finger-in the-air prediction is for double-digit revenue growth in UK Solutions & Logistics, around 30% growth in fees from its international supermarket customers for its Solutions business, plus an additional £30m of accelerated investment in its platform technology, taking total predicted capital expenditure up to around £700mln.
“We expect sales at Ocado continued with vigour,” said analysts at Hargreaves Lansdown, but added that management need to continue to convince investors that demand for its expensive fulfilment centres is still strong.
“With the end of lockdown in sight the e-commerce boom will likely lose steam, leaving supermarket execs faced with the dilemma of whether to spend big on a robotic fulfilment centre that will take years to pay off, or simply improve their current in-store picking technology for a fraction of the cost.”
Fevertree hopes to keep some fizz
Thursday will see full year results from posh mixer maker Fevertree Drinks PLC (LON:FEVR), although the headline figures have already been pre-flagged in a January trading update in which the company reported a 3% fall in revenue to £252.1mln for 2020 as a 22% fall in UK revenues was offset by strong growth in the US and the rest of the world.
While the company said it had traded resiliently during the year, investors will be looking to see how the latest round of lockdowns in early 2021 have impacted trading in the current financial year.
The outlook will also be closely eyed for any commentary on how the company expects its business to recover as restaurants and bars prepare to reopen in early summer in line with the UK’s roadmap for easing lockdown restrictions.
EMIS logs in with finals
EMIS Group plc (LON:EMIS), the provider of IT services to GP surgeries, will report its full year results on Thursday after having weathered the pandemic period reasonably well due to its products having been crucial for the health sector during the crisis.
With this in mind, profits and revenues will be expected to have held up well, with focus instead likely to be on the roll-out of the company’s next-generation core product, EMIS-X, which is designed to provide the NHS with better access to patient data.
Investors will be hoping that a successful EMIS-X rollout could help the company justify a price rise to its customers, which in turn could boost its cash generation and potentially grow shareholder returns.
Gym Group feels the cash burn
On Thursday, The Gym Group PLC (LON:GYM) will be “feeling the burn” – the cash burn, that is – when it issues its results for 2020.
In its January update, the group said its monthly cash burn during the current lockdown is £5mln, thanks to government support.
The group revealed that revenue for 2020 slumped to £80mln from £153mln the year before.
While it waits for the all-clear for people to once again start taking out annual gym memberships that they hardly ever use, the focus will be on maintaining its liquidity and here, unlike many of its lapsed members, it is in decent shape, with plenty of headroom said to be available under its £100mln banking facility.
That being said, it has been having discussions with its lending banks and there may well be some news on how these are progressing.
Announcements expected on Thursday March 18:
Trading announcements: Ocado Group PLC (LON:OCDO)
Finals: 888 Holdings PLC (LON:888), Fevertree Drinks PLC (LON:FEVR), EMIS Group plc (LON:EMIS), National Express Group PLC (LON:NEX), Gym Group PLC (LON:GYM), Capital Ltd (LON:CAPD), Empresaria Group plc (LON:EMR), Eve Sleep PLC (LON:EVE), Genel Energy PLC (LON:GENL), Portmeirion Group PLC (LON:PMP), Restore Plc (LON:RST), Vectura Group PLC (LON:VEC)
Interims: Ceres Power Holdings PLC (LON:CWR)
FTSE 100 ex-dividends to knock 6.37 points off the index: SEGRO PLC (LON:SGRO), Anglo American PLC (LON:AAL), Hikma Pharmaceuticals PLC (LON:HIK), CRH PLC (LON:CRH), M&G PLC (LON:MNG)
Economic data: BoE rates decision, US jobless claims