The start of the new month of December means there will be the next round of economic data, in particular, PMI surveys and Friday’s US non-farm payrolls
Companies such as Future, Wise, Pennon Group, easyJet and AJ Bell and their investors may or may not have been looking forward to the coming week’s round of results and updates, but the tone for many of them is likely to be somewhat different to before worries about the emergence of a new Covid-19 variant sent markets plummeting at the end of the past week.
Still, it is very early and the potential fall-out of the ‘nu’ (B.1.1.529) variant, is a big unknown to add to how company’s are going to approach and prepare for the coming months.
The start of the new month of December means there will be the next round of economic data, in particular PMI surveys and Friday’s US non-farm payrolls.
Future dealmaking in focus
Future PLC (LSE:FUTR) reports its full-year results on Tuesday but it sounds like analysts are more excited about any possible new acquisitions the media group will announce.
“Every year is a transformational year for Future. The company will report on a year that started with the purchase of Cinemablend, then GoCo, Marie Claire, and finally Dennis. If that was not enough, the company is still digesting and renovating TI Media,” observed Peel Hunt.
“Underlying all this M&A activity is a playbook that delivers strong organic growth – the company’s comments on black Friday should be very telling this year – but for once we believe it is the M&A progress that will be of particular note,” the broker added.
Analysts are expecting underlying earnings (EBITDA) of £206mln on turnover of £601mln. A full-year dividend of 2.34p is in prospect.
Easy does it
Who’d be the owner of an airline in the current environment?
But as the popular saying has it, “it is what it is” and easyJet PLC at least has the £1.2bn in its back-pocket that it raised in September.
The company has already revealed the headline loss before tax for the year to the end of September is expected to be between £1.135bn and £1.175bn in Tuesday’s results.
At the time it issued that guidance, the consensus forecast was for losses of £1,175mln; that has subsided to £1,153mln.
Cash burn on a fixed costs plus capital expenditure basis for the final quarter of the financial year – the third of the calendar year – was around £36mln a year, which was below the company’s guidance of £40mln.
Analysts will be interested in the company’s views of the likelihood of further travel restrictions being introduced in the wake of the discovery of a new strain of the coronavirus.
Following water company peers in the past week, it will be Pennon Group PLC (LSE:PNN, OTC:PEGRY) taking its turn this Tuesday.
The company’s South West Water arm was this summer cited by the UK Environmental Agency for being one of the worst polluters performers in the sector, allowing raw sewage to spill into rivers and the sea and performing “significantly below target” for pollution for the 10th year in a row.
In July it unveiled plans to achieve net-zero carbon emissions by 2030, and has since identified renewable energy generation investment opportunities of £60mln, in addition to £20mln associated with projects related to regulatory allowances.
And in September the FTSE 100 group said it has been experiencing record demand for water as more people have moved to the regions it serves during the pandemic.
Water usage and revenue increased now that businesses are reopening following the end of lockdowns. The supplier said pressure on its operational network remained high.
Wise PLC (LSE:WISE), the international payments fintech that floated in the summer, a quarterly update in October revealed transaction volumes were continuing to grow, leading it to say that annual revenue will be up 20-25%.
However, the ‘take rate’ – defined as revenue as percentage of volume – is expected to be slightly lower in the second half due to price reductions. Full-year gross margin is expected to come in at 65-67% from 62% last year.
The focus on Tuesday’s half-year numbers will therefore be on how trading has gone in the second half so far and if the full-year the outlook has changed.
Brokers on the other side of the microscope
The gradual easing of Covid restrictions earlier this year has seen retail trading activity return to ‘more normal’ levels, AJ Bell said in a recent statement ahead of Thursday’s final results.
In October’s pre-close trading statement, the stockbroker said key drivers of long-term growth like customer numbers and net inflows, continued strongly in the fourth quarter.
It added that demand for investment solutions has also continued to build across both the advised and direct-to-consumer markets.
Investors will be keen to see these trends confirmed to the bottom-line.
Stockbrokers will also be in focus on Wednesday, as recent AIM market newbie Peel Hunt releases its first set of results since its IPO, putting out its interims.
Peel Hunt raised £112mln as it came to market in late September. Some £40mln of that funding was earmarked for investments into the firm’s next phase of growth – so no doubt updates in that regard will be closely eyed.
The broker is “in prime position to take advantage of numerous opportunities ahead and continue our strong growth momentum”, according to a September statement. A progress report will shine some further light.
In FY21, the group’s revenues more than doubled to £196.8mln from £95.5mln the year before, as some 47% of all retail trade value in the UK was dealt on its trading platform.
More volatility spells good news for the retail trading arm, meanwhile, the corporate side will be hoping for sufficient stability to maintain the year’s strong appetite for new shares issues and secondary fundings.
The US non-farm payrolls report on Friday and the possible implications for interest rates dominate next week’s macro news.
Some 531,000 jobs were created in October and the consensus forecast currently is for around 560,000 in November.
Minutes of the last US Federal Reserve rate setting committee meeting indicated a more hawkish tone toward monetary policy, which was not likely to have changed after the surge in the central bank’s favoured measure of inflation in November.
So far, the Fed has agreed to taper its US$120bn quantitative easing (QE) programme by US$15bn a month.
That will mean no more money being pumped into the system from June 2022, which is when many economists also had expected to see a US interest rate rise.
While another very strong set of jobs numbers might change the Federal Reserve’s thinking at its next meeting, which is set for 14-15 December, the dial may well be moved the other way if the new B.1.1.529 Covid-19 variant proves as concerning as first feared.
There’s still a few stragglers from the US earnings season yet to publish their numbers.
These include Salesforce.com Inc, HP Enterprise and Frontline Ltd (NYSE:FRO) on Tuesday, with Wednesday seeing CostCo, Snowflake and Splunk Inc (NASDAQ:SPLK).
Thursday is a day for retail with Dollar General Corp and The Kroger Co (NYSE:KR), along with semiconductor developer Marvell Technology Inc.
Monday 29 November
Interims: Amigo Holdings PLC, Eckoh PLC (AIM:ECK, OTC:EKTPF), Molten Ventures PLC (LSE:GROW)
Finals: Character Group (AIM:CCT) PLC, Benchmark Holdings PLC (AIM:BMK)
AGMs: Brand Architekts Group PLC (LSE:BAR), Brown Advisory US Smaller Companies, Grit Real Estate Income Group (LSE:GR1T) Limited, KKV Secured Loan Fund Ltd, MySale Group plc, TR European Growth Trust PLC (LSE:TRG)
Economic data: Bank of England Mortgage Approvals, Consumer Credit and Money Supply
Tuesday 30 November
Trading announcements: DiscoverIE Group PLC, DP Eurasia NV
Interims: GB Group plc, Pennon Group PL, System1 Group (AIM:SYS1) plc, Vp plc, Wise plc
Finals: Contango Holdings (LSE:CGO) PLC, Countryside Properties (LSE:CSP), easyJet plc, Future PLC, Gooch & Housego PLC (AIM:GHH), Greencore Group PLC (LSE:GNC), Marstons PLC, Topps Tiles PLC (LSE:TPT), Shaftesbury (LSE:SHB) PLC, Treatt PLC
AGMs: Advance Energy plc, Alternative Income REIT, Castillo Copper Ltd (LSE:CCZ, ASX:CCZ), Europa Metals Ltd (AIM:EUZ, JSE:EUZ, OTC:EOPAF), Nanoco Group PLC (LSE:NANO)
Economic data: Nationwide House Price index (UK), M4 Money Supply (UK)
Wednesday 1 December
Interims: Brickability Group PLC (AIM:BRCK), Custodian REIT PLC (LSE:CREI), D4t4 Solutions PLC (AIM:D4T4, OTC:DFORF), Liontrust Asset Management (LSE:LIO) PLC, Marlowe PLC (AIM:MRL), Peel Hunt Ltd (AIM:PEEL), Redde Northgate PLC (LSE:REDD), TPXImpact Holdings PLC
Finals: Residential Secure Income REIT PLC (AIM:SIR)
AGMs: Atalaya Mining (AIM:ATYM, TSX:AYM) plc, Marshalls (LSE:MSLH) Plc
Economic data: BRC Shop Price Index (UK), Nationwide Housing Prices (UK), Markit manufacturing PMI (UK), ADP employment change (US), ISM Manufacturing PMI (US)
Thursday 2 December
Trading announcement: Go-Ahead Group PLC
Interims: SRT Marine Systems PLC (LSE:SRT)
Finals: AJ Bell PLC (LSE:AJB), Auction Technology Group PLC (LSE:ATG), Shaftesbury PLC
AGMs: Ferguson PLC (LSE:FERG), CQS New City High Yield Fund ltd, Essensys plc, Limitless earth plc, Vina Capital Vietnam Opportunity Fund Ltd,
Friday 3 December
Interims: Duke Royalty Ltd, Industrials REIT Ltd (LSE:MLI, JSE:MLI), Mind Gym Limited
AGMs: Bluefield Solar Income Fund (LSE:BSIF) Limited, Ferro-Alloy Resources Limited, Fidelity Asian Values PLC (LSE:FAS), Ruffer Investment Co ltd
Economic data: Markit Services PMI (UK), Nonfarm payrolls (US), ISM Services PMI (US)