Next week’s scheduled announcements might have seen some rapid re-writing following the outbreak of the omicron variant of Covid-19.
Rolls-Royce, Stagecoach and AB Foods must have been hoping they were looking at Covid-19, or at least the worst of it, in the rear-view mirror but once again everything has been thrown up in the air.
While it might be too early to draw any firm conclusions, expect the possibility of new restrictions to be mentioned heavily and for a cautious tone to be added to all the statements.
Monday 6 December
Victrex set to pay special
High tech plastics group Victrex PLC (LSE:VCT) has had a rough few months and UBS expects a mixed update from the group on Monday.
The broker is anticipating higher capital expenditure and operating cost over the next 12 months due to the construction of its new China plant.
UBS also says that there may be subdued trading in the aerospace and automotive branches of the company in the short-to-long term.
As a result, it has remained conservative in its estimates for the upcoming financial year.
Consensus for the year is underlying profits of £91.9mln with net cash of £53mln at the year-end.
A special dividend of 45p is also possible taking the payout for the year to 88p
Tuesday 7 December
Ashtead bar set pretty high
The bar is set high for equipment hire firm Ashtead Plc ahead of financial results on Tuesday, with the market price presently only slightly beneath all-time highs.
Ashtead has been bullish in the run-up and will have to at least live up to expectations.
“The firm weathered 2020’s pandemic and recession better than expected and has recovery more quickly than anticipated by analysts in 2021, thanks in part to how it derives some 80% of revenues and 85% of profits from its American operation, Sunbelt (the rest comes from the UK and Canada),” AJ Bell analysts said in a note.
“The US economy has rebounded strongly from 2020’s short, sharp downturn and the Biden administration’s expansionary fiscal policy, with a focus on infrastructure spending, seems to put Ashtead in a bit of a sweet spot.”
Investors will be keen for an update on dividend, which maintained growth through the pandemic, and have an eye on share buy-backs, as a campaign has so far spent around US$200mln.
Will British American Tobacco undershoot again?
British American Tobacco has plenty of sceptics and Barclays seems to be one of them, believing the cigarette giant should be performing a lot better.
Growth has undershot long-term guidance of 7% over the past two years in spite of people reportedly puffing away more during lockdown periods.
BAT blames the impact of a South African ban in 2020 as well as foreign exchange fluctuations in 2021 but Barclays points to not prioritising its next-generation products enough, an area where it has a clear advantage.
Around 6% annual earnings growth has been what BAT has been delivering recently and may do so again, suggests the UK bank.
Macro news
Tuesday will see the release of the British Retail Consortium’s (BRC) retail sales monitor, which will give some idea of the health of the High Street.
The survey covers November, which of course is before news of the Omicron variant of Covid-19 broke and started affecting the behaviour of shoppers.
On top of that, the survey is not regarded as a totally reliable indicator of retail sales volumes because of the relatively small number of survey respondents but for what it is worth, economists are expecting volumes to be up 1.1% year-on-year after October’s 0.2% fall.
Wednesday 8 December
Housebuilder Berkeley Group PLC should see the benefit of a stronger London housing market in its interim results says JP Morgan, which has upgraded its profit estimate to £280mln.
Data recently points to strong new build demand, rents and home buying interest says JPM, which expects Berkeley to upgrade its guidance with its interims.
Berkeley Group shares are down 8% year to date, significantly underperforming the sector adds the US bank, putting them on an average valuation for the sector compared to a historical premium of 50%.
JPM says that is attractive, even though it has tweaked its share price target down to 5,500p from 5,848p.
Stagecoach: Merger talks and passenger numbers the focus
Stagecoach Group PLC (LSE:SGC) has been shrinking for a good few years and is now back to its core of running buses.
The potential merger with National Express is still being discussed, the deadline is now14 December, so the speed of recovery in bus passenger numbers is likely to be the focus.
In early October, passenger volumes within the regional bus division were approximately 70% of pre-pandemic levels in 2019, which has risen to 80% in some areas.
UBS said it will also be watching “the outlook for wage increases and driver availability and the group’s balance sheet and leverage position,”
The broker expects revenues for the six months will be £532mln with an adjusted operating profit of £25.7mln.
Thursday 9 December
Dr Martens walking more comfortably after rocky path since listing
Dr Martens PLC (LSE:DOCS), maker of the iconic cushion-soled boots and shoes, will release its half-year 2022 results on Thursday.
Barclays has just upgraded its recommendation on the shares to ‘overweight’ from ‘equal weight’ and believes the shares are worth 480p, some 20% upside on its current price of 400p.
The 20% drop in value over the past six months is ‘overdone, it said, especially as it met its IPO guidance.
Barclays says the reasons for this are the departures of the chief marketing and chief digital officers and the lack of an earnings ‘beat-and-raise narrative,’ along with Covid and supply chain concerns.
In the note, it said: “We continue to like the exposure to a strong brand, and we believe the company still has the ability to grow via significant headroom in many geographies, conversion of markets, rationalising wholesale, and improving the DTC [direct-to-consumer] mix.”
Omicron shadow looms at Rolls-Royce
Rolls-Royce should have been a recovery story unfolding, but the omicron outbreak has done for that, for now anyway.
Prior to last week, airline orders were picking up, the troublesome Trent 1000 engine was seemingly under control and interest is rapidly growing in its mini-nukes project.
Now with omicron threatening more travel restrictions all bets might be off again, though given the new variant has only just been identified the backwards-looking numbers should still be OK.
Cashflow is what analysts focus on with Rolls and its liquidity capacity, which with the outbreak of omicron has moved centre stage again.
Friday 10 December
Supply chain reassurance sought from AB Foods
AB Foods said last month it was expecting “significant progress” in group adjusted operating profit and adjusted earnings per share as Primark rebounds strongly.
Whether the recent supply chain issues have pushed the group off track will be the focus on Friday as it addresses shareholders at its AGM.
Again, omicron will play a part here with a prediction that it would claw back an estimated £2bn of sales lost due to store closures last financial year dependent on there being no more COVID-19 restrictions.
Macro news
UK gross domestic product data for October should show the UK economy still in bounce-back mode, with economists expecting year-on-year growth of 5.2%, down from 5.3% in the previous month.
Month-on-month, the increase is expected to be 0.5% after October’s 0.6% jump.
Industrial production is tipped to rise 0.2% from September’s level after falling 0.4% the month before.
Is the inflation genie out of the bottle?
If he/she/it is not fully out, there are certainly wisps of evidence that a bottle exit is imminent with the core US inflation rate in October running at 4.6% and expected to rise to 4.7% in November.
The month-on-month increase is expected to be 0.8%, down slightly from October’s 0.6% hike.
Major announcements expected
Monday 6 December
Finals -Victrex PLC (LSE:VCT)
Interims- Fusion Antibodies PLC (AIM:FAB)
AGMs- Amur Minerals Corporation, Bellway PLC, Emmerson PLC, PipeHawk PLC, Virgin Wines UK PLC
Economic announcements- PMI Construction (UK)
Tuesday 7 December
Finals- CareTech Holdings, Hyve Group plc, IXICO plc, Paragon Banking Group PLC, Renew Holdings (AIM:RNWH), Tritax Eurobox PLC
Interims- Babcock International (LSE:BAB), iomart Group, Kinovo PLC, Mercia Asset Management PLC (AIM:MERC), SDI Group Plc, Solid State PLC (AIM:SOLI), Supreme PLC (AIM:SUP), Vianet Group (AIM:VNET) PLC, WH Ireland Group PLC (AIM:WHI)
AGMs- Amedeo Air Four Plus Ltd, Applied Graphene Materials PLC (AIM:AGM, OTCQX:APGMF), Falanx Group Ltd, IMC Exploration
Trading announcement – Ferguson PLC (LSE:FERG), British American Tobacco PLC (LSE:BATS)
Group plc, Schroder Japan Growth Fund plc, Scottish Oriental Smaller Cos Trust, YouGov Plc
Economic announcements- Retail Sales (UK), Halifax House Price Index (UK), Consumer Credit (US)
Wednesday 8 December
Finals – Hardide PLC, SSP Group plc (LSE:SSPG), TUI AG (LSE:TUI)
Interims- Berkeley Group Holdings PLC, Ince Group PLC, Quiz PLC (AIM:QUIZ), Stagecoach PLC
Trading announcements- McColls Retail Group PLC
AGMs- Alternative Liquidity Fund Ltd, Ashoka India Equity Investment Trust PLC (LSE:AIE), Europa Oil & Gas Holdings, International Biotechnology Trust plc, Volta Finance Ltd
Economic announcements- MBA Mortgage application (US), Crude Oil Inventories (US)
Thursday 9 December
Finals- Finsbury Growth and Income Trust PLC, On The Beach Group PLC, Victorian Plumbing Group PLC (AIM:VIC)
Interims- Clipper Logistics plc, Dr Martens PLC (LSE:DOCS), DWF Group Ltd, FirstGroup (LSE:FGP) PLC, LendInvest plc, Moonpig Group Plc, DS Smith PLC, Watches of Switzerland Group plc
Trading announcements- Balfour Beatty plc (LSE:BBY), Rolls Royce Holdings PLC, S& U PLC
AGMs- Bioventix plc, BlackRock Greater Europe Investment Trust plc, Doric Nimrod Air One Ltd, Doric Nimrod Air Three Ltd, Doric Nimrod Air Two Ltd, Frontier IP Group PLC (LSE:IPO), Lok'n Store plc, Orchard Funding Group plc, Ridgecrest plc, Round Hill Music Royalty Fund, UK Mortgages Ltd, Westmount Energy
Economic announcements- RICS Housing Market Survey (UK), Continuing Claims (US), Initial Jobless Claims (US), Wholesales Inventories (US)
Friday 10 December
Finals- Nexus Infrastructure PLC
Interims- Frasers PLC, SDCL Energy Efficiency Income Trust PLC , Yellowcake PLC
AGMs- Associated British Foods PLC (LSE:ABF), UP Global Sourcing Holdings PLC (LSE:UPGS).
Economic announcements- Balance of Trade (UK), Gross Domestic Product (UK), Index of Services (UK), Industrial Production (UK), Manufacturing Production (UK), Consumer Price Index (US)