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Primark owner AB Foods, SERCO and Dixons key corporate names in the diary for coming week, US non-fa


The coming week is a little light in terms of company news, however, what news there is includes a number of notable names including Primark owner AB Foods, electronics retailer Dixons Carphone and outsourcing giant SERCO.

Meanwhile, the macro diary will also be drawing attention as investors focus on the latest US non-farm payrolls on Friday as well as UK GDP and some PMI readings earlier in the week.

Forward Lookers

Lookers PLC (LON:LOOK) results on Tuesday will not really be of interest in terms of what happened last year, as the car dealership owner has been reporting strong trading recently.

There has been more interest in the sector recently amid the rise of online-only rivals Cazoo and Cinch, with the former on the path to a US$7bn through a US SPAC listing.

Lookers said back in April and May that its trading had been strong in its first quarter as it continued to take orders and fulfil vehicle handovers in the first quarter with its new ‘Click and Drive’ and contactless technology platform allowing it to handle increased demand through digital channels.

With Lookers shares now trading at higher than they were at the start of 2020, broker Peel Hunt said, “were it not for caution around potential supply constraints, we would have been pushing through much bigger upgrades.

“The results provide an opportunity to check on any supply constraints and ongoing progress, although our sense is that there are more upgrades to be had as we move into autumn and the key month of September.”

SERCO sources update

As the old Douglas Adams joke has it, Serco PLC (LON:SRP) – loathe them or ignore them, you can’t like them.

The controversial outsourcing firm, which is heavily involved in the UK’s ramshackle test and trace programme, issues a pre-close period trading update on Wednesday having increased full-year guidance a couple of weeks back

“All of our four divisions have traded in-line or ahead of their budgets in the first five months of the year. In the UK in particular, volumes on both our Testing and Tracing contracts have continued to be strong and we now think it likely that demand for these services will continue for longer in the second half than we previously anticipated,” said Rupert Soames, the chief executive of Serco.

The group expects underlying trading profit in 2021 will be around £200mln, some £15mln higher than previous guidance.

Dixons hopes to keep online operation steaming ahead

Dixons Carphone PLC (LON:DC.), soon to be renamed Currys PLC, will deliver full-year results on Wednesday that are likely to see the success of the firm’s accelerated pivot to digital thrown into sharp relief.

With the pandemic sending the requirement for an effective online operation to the top of the agenda, the company has doubled down on its digital proposition and investors will be hoping the momentum has continued now lockdown restrictions are easing.

One of the key areas of interest will be the firm’s operating margins, which around 2% are already pretty thin so there will be little room to manoeuvre. The company has also forecast a profit for the year of £151mln and net cash of £150mln, so any numbers will be compared against these.

The outlook statement will be similarly crucial, particularly around the group’s restructuring efforts and plans to close or consolidate stores.

AB Foods eyes pent-up demand

Primark owner Associated British Foods PLC (LON:ABF) will deliver a quarterly trading update on Thursday that is likely to be closely eyed by investors to see how the retailer is recovering from lockdown.

While the group is on track for a year-on-year profit decline, the business seems to have held up relatively well despite the high street closures, although this alongside a lack of an online operation has hit revenues hard.

One of the company’s biggest strengths during the lockdown has been Primark’s inventory management, which has allowed it to avoid discounting heavily to shift stock like its rivals. With this in mind, shareholders will be looking to see if the company has taken advantage of the post-lockdown demand to shift its older clothes.

Margins will also be eyed to see if demand has been as strong as management has predicted, while over in the non-Primark grocery business the figures are likely to be facing tough comparisons from last year while rising US vegetable oil costs could potentially hold back profits.

AO arrives late with finals

Thursday will see AO World PLC (LON:AO. issues its delayed results for the year to the end of March.

The delay was a consequence of disruption caused by the COVID-19 pandemic on the audit processes.

In most other respects, however, the pandemic has been good to the online electricals retailer.

‘’Electrical retailer saw business soar during the pandemic as consumers poured money into IT and white goods for working from home setups.’s established digital platform was well placed to profit from the dramatic shift to online purchases during the pandemic, and 2 million new customers signed up,” noted Susannah Street at Hargreaves Lansdown.

Streeter is expecting to see evidence that the rapid growth trajectory is tailing off, but the company still expects double-digit percentage growth for the year ahead.’

“Group revenue for the first nine months surged by 66% and although there are some concerns purchases may simply have been brought forward, there were initial signs the company was plugged into continued momentum during the fourth quarter. What has also been encouraging is that the German business also turned profitable during the year. With bricks and mortar retailers now open, there will be a return to more traditional electrical retailers so we are likely to see evidence that the pace of new business is slowing; however, the buoyant property market could continue to be a driver for sales, with people moving house keen to buy brand new white goods. Working from home is also expected to linger for the long term, so there are likely to be fresh upgrades needed of workers IT systems which could also help benefit the company,” Streeter said.

Focus on Micro Focus divisions

FTSE 100 legacy software specialist Micro Focus PLC (LON:MCRO) is due to report interim results on Thursday 1 July, following a trading update in May where it reported a better-than-expected decline in sales of 5% with licences growing 10% year on year.

Underlying earnings (EBITDA) were said to be roughly US$500mln on revenues “in-line with current revenue consensus”, around 5% on a reported basis.

The focus in these results is going to be on the divisional performance and in particular if Security and Information Management have seen any improving trends, said analysts at UBS, and perhaps a more definitive outlook.

“With maintenance down 8% there are still challenges, with likely investor concerns greatest around ITOM [IT operations management].”

Macro matters

With the new month of July beginning in midweek, the US non-farm payrolls will be the big event for macro data watchers.

With rallying oil prices stoking wider inflation concerns, a meeting of the OPEC+ oil-producing cartel will be in focus.

“Rising oil prices are particularly bad for consumer nations such as India where fuel prices have jumped to record highs thanks to heavy local taxes and high crude prices,” said market analyst Fawad Razaqzada at Think Markets.

“If prices remain this high, this will eat into consumers’ disposable incomes and potentially choke economic growth, which, over time, will weigh on crude prices.”

With the US Federal Reserve stressing that its decisions are data-dependant, speculation about the future of US monetary policy will continue to rumble over the week, especially as there are several important macro pointers from the world’s largest economy scheduled.

Chief among them will be the monthly NFP report on Friday.

“After a couple of disappointing readings, will we see a big rebound this time?” wondered Razaqzada.

“Analysts expect a 600K reading, which would be a little higher than the May print. However, average hourly earnings have beaten expectations in the previous two months and another sharp rise could re-ignite inflation concerns.”

Significant announcements expected for week ending 2 July:

Monday June 28:

Interims: Porvair PLC (LON:PRV)

Tuesday June 29:

Finals: Appreciate Group PLC (LON:APP), D4t4 Solutions PLC (LON:D4T4), Lamprell PLC (LON:LAM), Lookers PLC (LON:LOOK), Seeen PLC (LON:SEEN)

Economic data: UK car production, UK mortgage lending, US house prices

Wednesday June 30:

Trading announcements: Serco Group PLC (LON:SRP)

Finals: Stagecoach Group PLC (LON:SGC), Dixons Carphone PLC (LON:DC.), Aminex PLC (LON:AEX), Civitas Social Housing PLC (LON:CSH), Non-Standard Finance PLC (LON:NSF), OptiBiotix Health PLC (LON:OPTI), PCF Group PLC (LON:PCF), Studio Retail Group PLC (LON:STU)

Interims: Harworth Group PLC (LON:HWG), Velocity Composites PLC (LON:VEL)

Economic data: UK GDP, US ADP employment, US Chicago PMI

Thursday July 1:

Trading announcements: Associated British Foods PLC (LON:ABF), Loungers PLC (LON:LGRS)

Finals: AO World PLC (LON:AO.), Polar Capital Holdings PLC (LON:POLR)

Interims: Micro Focus International plc (LON:MCRO)

FTSE 100 ex-dividends to knock 1.03 points off the index: Burberry Group PLC (LON:BRBY), B&M European Value Retail SA (LON:BME)

Economic data: UK manufacturing PMI, US jobless claims, US manufacturing PMI

Friday July 2:

Interims: Reach PLC (LON:RCH)

Economic data: US non-farm payrolls

Proactive headlines: Tirupati Graphite, Remote Monitored Systems, ANGLE…

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