Latest News

M&S, Aviva and Ted Baker among the big names in coming week


The week ahead is expected to see results from several well-known retailers, notably Marks & Spencer, Ted Baker and Pets At Home, while insurance giant Aviva will also be in focus when it updates on its current trading.

Meanwhile, landlords British Land and Shaftesbury are also in the diary alongside software firm AVEVA and utility firm SSE.

Things are a little quieter on the macro calendar, with US GDP and jobless claims on Thursday likely to be the key draw.

Aveva in state of flux

Industrial software group AVEVA Group PLC (LON:AVV) will report final results on Tuesday and may still be reeling after chief executive Craig Hayman signalled his intention to quit for personal reasons.

This was just a few weeks after the FTSE 100 group completed its US$5bn acquisition of data management software firm OSIsoft, which was agreed last August.

A third-quarter update in January revealed strong renewals helped to improve revenue growth to around 1.5% for the nine months, while recurring revenues grew 10% to comprise 68% of total group revenue in the period.

OSIsoft meanwhile achieved billings growth of 8.5% for the year to December 31.

Hayman said at the time the group order pipeline for the remainder of the year was “solid”.

The main focus with results will be profitability and the outlook, with the City consensus looking for underlying earnings (EBIT) of £210mln for AVEVA as a stand-alone AVEVA.

As an enlarged group, the pro forma forecast is for sales of £1.2bn and EBIT of £328mln.

“In terms of the outlook, Aveva will likely acknowledge the benefits of the cadence of large deal renewals to FY 21, with fewer multi-year renewals in FY 22 creating a modest headwind to growth, but with OSIsoft on board and revenue synergy targets likely to be targeted as early as FY 22, a ‘high single-digit’ pro forma growth outlook is likely with some margin improvement also anticipated as cost synergies come through and FY 21’s COVID-related headwinds unwind,” said UBS.

Shares in the company, having near quadrupled in the previous three years, have struggled to regain their highs from February 2020, down 22% since.

Retail rebound could be the saviour of Shaftesbury

Strong UK retail numbers at the end of the past week bode well for the outlook for Shaftesbury PLC (LON:SHB), which is due to report half-year results Tuesday.

Shares in the Covent Garden and Soho landlord are down more than a third since the start of last year, not surprising with the complete closure of most of London’s West End during the pandemic and a near-total absence of tourists and office workers.

After writing down the value of its portfolio 18% to £3.1bn and announcing a big loss for its last full year, City analysts expect EPRA earnings per share of around 2.3p for the six month period, down 72% compared to the same period a year ago, driven by the £307mln equity raise in October and lower rent collections.

The market also expects net tangible assets to be 613p, down 18% since the year-end driven by negative revaluations across the portfolio.

Property industry data showed valuations for Central London shops decreased 10% from September 2020 to March 2021.

“We will be looking closely at any signs of improved operations given the recent reopening and easing of restrictions,” said UBS.

Susannah Streeter at Hargreaves Lansdown said: “Now the company is adjusting to the new normal, trying to offer tenants more flexibility, shorter leases and the chance of sharing the risk via turnover rents. This adaptability and nimble attitude to meet changing business needs should stand Shaftesbury in good stead as the economy recovers. Shaftesbury has also worked with councils to encourage the alfresco dining revolution, which is rippling through the city, which could prove a positive long-term benefit if given the right support.”

These aren’t just results, these are M&S results

High street stalwart Marks & Spencer Group PLC (LON:MKS) is due to report its final results on Wednesday as it continues to tackle an overhaul of its business.

Investors will be hoping the company’s online sales have managed to support the firm during the disruption caused by the pandemic, as well as how the firm expects its current year to pan out as lockdown restrictions ease across the UK.

Food will also be in focus as investors eye the fruits of the company’s delivery joint venture with Ocado, as well as any broader commentary about how the company views the future of the high street and its strategy to respond to the shifting retail landscape.

Hope but not much glory for British Land

It goes without saying that property companies have had a torrid time during the pandemic and that Wednesday’s results from British Land Company PLC (LOM:BLND) will be grim.

The consensus forecast is for full-year earnings per share on the industry-standard EPRA basis will fall by 36% to 21p from a year earlier, as the company makes provisions for lower rent collections.

The EPRA net tangible assets valuation is expected to fall by 17% to 21p, reflecting lower property prices in the retail and office sectors.

UBS will be on the lookout for news of acquisitions.

“British Land has recently purchased retail parks, and has entered in the logistics asset class with the purchase of an urban logistics warehouse in Enfield. We will be interested to hear the commentary around further logistics acquisitions, and any further capital recycling given the £1.3bn of capital activity from 1 April 2020 to 14 April 2021,” UBS said.

“Valuations: [are] always a focus, but it will be particularly interesting to see how the retail portfolio fares, given British Land’s higher exposure to retail parks, where declines have slowed and some buying interest has stepped it,” the Swiss bank said.

Also on UBS’s wish list is an update on Canada Water, and urban logistics development opportunities, such as Meadowhall and Teesside.

SSE eyes greener pastures from renewables switch

Shares in power company SSE PLC (LON:SSE) are up 5% since the start of last year and roughly flat over the past five years, as the group has steadily moved into cleaner energy sources (a third of its output at last count was from hydro and wind) while also selling its retail energy business and other ‘non-core’ assets.

Its income attractions, with a dividend policy to increase its annual payout by the rate of retail price index, have supported the shares.

Shareholder distributions are partly being funded by asset sales, with two energy-to-waste projects raising almost £1bn in cash in November and other deals in the pipeline to take this up to £2bn by the autumn.

As well as returning cash to investors, SSE is working on a £7.5bn investment programme as it aims to treble its renewable energy output by 2030, with projects including the massive Dogger Bank offshore wind farm.

Wednesday’s full-year results should see a £200mln profit hit from the coronavirus but the company said, if weather patterns were to be normal, it would expect to report full-year adjusted earnings of 85p-90p per share and recommend a total dividend of 80p per share.

With inflation being the elephant in the room for markets of late, analysts at Citigroup said SSE looked the best-placed of the UK utilities at it has the least inflation-linked debt.

Aviva slims down and cashes in

Aviva PLC (LON:AV.), unlike many of us after the lockdown, is a much leaner proposition these days and investors are keen to know what the company plans to do with the pile of money it has raised from the sale of eight non-core entities.

Having raised £7.5bn in cash through the disposals, the company has, by Barclays’ calculations, excess capital of around £3.7bn that could be distributed before the insurance giant exceeds its gearing ratio target of 30%.

“With Aviva making strong strides in bulk annuities in recent years, we anticipate that management may hold back c.£0.7bn for bulk annuity deals, but return c.£3.0bn to shareholders in the form of share buybacks,” Barclays said.

Ted Baker looking shabby after pandemic battering

Clothing firm Ted Baker PLC (LON:TED) has not fared well during the pandemic, as demand for loungewear and tracksuits during lockdown usurped the desire for fashionable ‘night out’ apparel, with the shuttering of most of its stores during lockdown unlikely to have helped matters.

As a result, the company’s full-year results on Thursday are unlikely to make for pleasant reading, with the company having previously reported that revenues in its final quarter had plunged 47%.

Profits are expected to be even worse than that, as the company is still having to pay rent on its closed stores, meaning costs have likely stayed the same or increased. Analysts, therefore, are predicting the company will swing into a £70mln loss from an £18mln profit in the previous year.

With lockdown restrictions finally easing, the company’s outlook statement will be of paramount importance, particularly how the company plans to turn itself around and rejuvenate the business in a post-COVID world.

Pets at Home profits from pandemic pet proliferation

Results from Pets At Home Group PLC (LON:PETS) on Thursday are likely to set investor tails wagging as the firm has profited from a boom in pet ownership during the pandemic as customers increasingly sought out new fluffy companions during lockdown.

The company’s like-for-like sales grew by 17.6% in its third quarter, so shareholders will be hoping that trend continued into the final quarter of the year, while the firm has also forecast full-year profits of £85mln.

However, the outlook statement is likely to be eyed more cautiously as new pet ownership levels flatten, although the company’s longer-term services such as its vet clinics, grooming services and VIP clubs providing ongoing revenue streams as well as opportunities for cross-selling from its core retail arm.

Johnson Matthey hopes to shine

Platinum refiner Johnson Matthey PLC (LON:JMAT) is expected to report second-half earnings before interest and tax (EBIT) of £343mln on revenue of £2.24bn on Thursday.

Last month, the group revealed that its operating performance in the year to the end of March had been “around the top end of market expectations”.

At the time, the consensus forecast for full-year underlying operating profit in 2020/21 was £469mln, with the forecasts ranging from £405mln to £502mln.

Underlying operating profit in the preceding year was £539mln but as Johnson Matthey’s chief executive, Robert MacLeod said last month, the year just ended had been an extraordinary one.

Analysts are likely to be interested in guidance on capital expenditure for the current year, with current thinking that it will be around £486mln, dipping to £474mln next year.

Macro matters

Apart from continued angst about inflation, the week ahead is set to be a quieter one for macro indicators, indeed almost a desert in terms of UK data.

But as seen in the past week, said Fawad Razaqzada at ThinkMarkets, “this does not necessarily mean the markets will be quiet”.

Indeed, the week is bookended by a cryptocurrency conference on Monday and US inflation data on Friday, in the form of the US personal income & expenditure figures, which include the US central bank’s preferred inflation gauges.

The only UK data is on public sector borrowing on Tuesday, while other US indicators during the week include durable goods orders, the Conference Board consumer sentiment index, the Richmond Fed activity index, and the final estimate of first-quarter GDP.

Significant announcements expected for week ending 28 May:

Monday May 24:

Trading announcements: Hilton Food Group PLC (LON:HFG)

Finals: Kainos Group PLC (LON:KNOS), Randall & Quilter Investment Holdings Ltd (LON:RQIH)

Interims: US Chicago Fed activity index

Tuesday May 25:

Finals: AVEVA Group PLC (LON:AVV), Electrocomponents PLC (LON:ECM), Big Yellow Group PLC (LON:BYG), Calnex Solutions PLC (LON:CLX), Helical PLC (LON:HLCL), Hurricane Energy PLC (LON:HUR), Speedy Hire PLC (LON:SDY), Warehouse REIT PLC (LON:WHR)

Interims: Avon Rubber PLC (LON:AVON), Greencore Group PLC (LON:GNC), IXICO PLC (LON:IXI), Shaftesbury PLC (LON:SHB)

Economic data: US house prices

Wednesday May 26:

Trading announcements: Intertek Group PLC (LON:ITRK)

Finals: Marks & Spencer Group PLC (LON:MKS), SSE PLC (LON:SSE), British Land Co PLC (LON:BLND), De La Rue PLC (LON:DLAR), Biffa PLC (LON:BIFF), Mediclinic International PLC (LON:MDC), ASA International Group PLC (LON:ASAI)

Interims: Oxford Metrics PLC (LON:OMG), Auction Technology Group PLC (LON:ATG)

Thursday May 27:

Trading announcements: Aviva PLC (LON:AV.)

Finals: United Utilities Group PLC (LON:UU.), Ted Baker PLC (LON:TED), Pets At Home Group PLC (LON:PETS), Caledonia Investments PLC (LON:CLDN), Invinity Energy Systems PLC (LON:IES), Johnson Matthey PLC (LON:JMAT), LondonMetric Property PLC (LON:LMP), Picton Property Income Ltd (LON:PCTN), Tate & Lyle PLC (LON:TATE)

Interims: Daily Mail & General Trust PLC (LON:DMGT), Impax Asset Management Group PLC (LON:IPX), AJ Bell PLC (LON:AJB)

FTSE 100 ex-dividends to knock 2.61 points off the index: Intertek Group PLC (LON:ITRK), Evraz PLC (LON:EVR), Sage Group PLC (LON:SGE), Imperial Brands PLC (LON:IMB), DCC PLC (LON:DCC), Severn Trent PLC (LON:SVT)

Economic data: US GDP, US jobless claims, US durable goods

Friday May 28:

Finals: Volvere PLC (LON:VLE)

Economic data: US personal spending, US inflation expectations, US Chicago PMI

WeWork sees encouraging signs of recovery, reports US$2bn loss

Previous article

Shares in UK cannabis pain medicine developer spike on first day’s dealings

Next article

You may also like


Leave a reply

Your email address will not be published. Required fields are marked *

More in Latest News