With the US election results hopefully concluding before the start of next week, attention will turn away from politics and back to the corporate calendar, with a number of prominent names including ITV, Burberry and WH Smith set to deliver updates and results.
Other firms are also likely to catch the eye of investors, notably commercial property group LandSec and publican Wetherspoons as they count the cost of lockdown. There will also be interest in housebuilders Taylor Wimpey and Persimmon.
The macro calendar will offer its own share of excitement with UK unemployment figures as well as UK GDP and US inflation data later in the week.
LandSec portfolio in the spotlight as pandemic batters commercial landlords
Interim results from Land Securities Group PLC (LON:LAND) on Tuesday are likely to be dominated by questions about how the company’s commercial property portfolio is faring as continued home working during the pandemic hits office landlords hard.
The company’s shares are currently trading at around 550p each, well below its last stated net asset value (NAV) per share figure of 1,192p, indicating that most investors believe the portfolio is likely to decline steeply in value as a result of the shift away from office space.
Key metrics for investors will be the company’s rent collection, vacancy rates and net debt, although given the effects of the pandemic improvements in these are unlikely.
Also of interest will be the firm’s plans for its dividend after scrapping its third and fourth quarter payouts last year and scrapping the first quarter payment this year. However, chief executive Mark Allan is aiming to bring the divi back, while investors will also be looking for any details on the CEOs restructuring plans and a new strategy.
Housebuilders look to build on robust market
Housebuilders Taylor Wimpey PLC (LON:TW.) and Persimmon PLC (LON:PSN) will provide trading updates on Tuesday and Wednesday, coming after smaller rival Redrow indicated the housing market remains robust, though numbers from Halifax suggested price growth was softening.
The sector’s shares have fallen more than 20% this year, though Persimmon has been the strongest performer, down just 4%.
We last heard from Persimmon when it released interims in August with house sale completions down 35% and operating profit falling 43%.
With demand strong and good levels of new houses coming through, the sales pipeline stood at £2.25bn.
Analysts at broker Peel Hunt expect a “generally positive” statement, saying that Persimmon’s lower price point and higher Help to Buy exposure “should continue to drive good sales performance in the second half of the year, especially in the context of reduced availability of high LTV mortgages”.
“However, the market share gains the group has enjoyed as a result of its more advanced build position may begin to erode as rival housebuilders restock their inventories.”
“It’s possible that this second coronavirus lockdown could be the straw that breaks the market’s back”, said analysts at Hargreaves Lansdown, “but we doubt it”.
However, sales rates collapsed during the first lockdown, and a notable drop-off would not be surprising.
“People usually like to visit houses before committing to buying them, and while online shopping is gobbling up traditional retail we doubt houses are quite ready for that,” the Hargreaves analysts added.
“A surge of pent up demand was unleashed when the lockdown ended though, so the builders may be able to look forward to that. Furthermore, construction activity was halted during the last lockdown but looks set to forge ahead this time.”
Wetherspoon’s updates as lockdown begins again
Wednesday will bring a trading update from publican JD Wetherspoon PLC (LON:JDW), coming shortly after England’s pubs were forced to shut down again in a second lockdown.
With this in mind, the update is likely to contain more opinions from chairman Tim Martin on the effectiveness of the latest lockdown restrictions, however, investors are likely to be more interested in how the company’s pub estate has performed amid regional restrictions, as well as its cash balance and any cost saving plans.
Given the new lockdown is likely to once again hammer the hospitality industry, there may also be a risk of permanent pub closures and job losses. There will also be interest in any methods the company employs to keep making money during lockdown, including the possibility of selling takeaway drinks.
Where’s the remote, it’s ITV time
Former FTSE 100 peer ITV PLC (LON:ITV) is releasing a trading update where investors will focus on advertising spend, which fell 43% in the second quarter.
UBS forecast a 15% fall in total advertising revenue in the third quarter after August and September trading improved supported by the auto industry, government, retail and fast-moving consumer goods.
The question is whether more traditional advertising venues, such as corporate advertising spend, have been recovering since online has been doing better recently.
The figures are expected to be difficult, considering the broadcast company could not be able to afford huge cash burns if conditions remain challenging going into 2021.
“We are more hopeful about the performance of ITV’s Studios business, which produces both scripted and unscripted content for ITV and third party broadcasters at home and abroad,” analysts at Hargreaves Lansdown commented.
“While the first lockdown meant many productions were put on hold, we suspect it will also have seen viewers burn through back-catalogue material, increasing demand for new content. ITV will be hoping that boosts activity going forwards.”
Burberry takes to the catwalk with interim results
Burberry Group PLC (LON:BRBY) opens the dances on Thursday with its results for the six months to end September.
The FTSE 100 luxury designer has been hit hard by the pandemic, with its trading dented already since January because of its focus on Asian markets, where the COVID-19 outbreak started weeks before Europe.
The first quarter saw revenues tanking by 49% due to store closures, while the second quarter is expected to see a 15-20% after restrictions were relaxed in the summer.
The market will look at the quality of sales, whether they were full-price, discounted or coming from higher margin outlets, as well as profit guidance for the remainder of the year.
“Although its customers are mainly from higher income brackets with significant buying power, even in the midst of a global pandemic there still appears to be more reticence than usual to spend on big ticket accessories,” analysts at Hargreaves Lansdown noted.
“Burberry has been trying to reach out to a younger market, with a tie up with the Twitch streaming platform to showcase its latest collections and win over trend setting influencers. We may see some success in that direction but with fresh lockdowns hitting its European and UK market, there are likely to be warnings of tougher times ahead again for the luxury brand.”
More struggles for WH Smith
In the retail space, WH Smith PLC’s (LON:SMWH) full-year results are out on Thursday where investors will be able to understand the cost of the pandemic on shops in stations and airports.
With people switching to working from home arrangements and travel bans, the stationery seller has been hit in its key markets.
The board said in August it was considering to cut 1,500 jobs or 11% of the workforce to protect the balance sheet, so the results may come with updates on restructuring.
Looking ahead, the second lockdown may give an idea of how this Christmas season may look like.
“Its travel division was the main driver for growth before the pandemic, so the prospect of deserted railway stations and airports for potentially many more months will be a bitter pill to swallow,” analysts at Hargreaves Lansdown said.
“There will be hope online purchases will make up some of the shortfall but competing with the might of Amazon won’t be easy.”
National Grid to keep the lights on
Interim results from National Grid PLC (LON:NG.) on Thursday are unlikely to contain any surprises for investors, as the electricity group appears to have handled the pandemic and resultant increases in energy usage with little cause for concern.
One area of interest will be the firm’s COVID-19 impact costs, which it has already noted could cost £400mln, mostly from its US business, so any changes to this number will be eyed closely.
The area of concern is likely to regulation, with a recent Ofcom report saying the firm does not offer good enough returns or invest enough in its network, both of which could potentially serve to pressure the all-important dividend.
UK unemployment has started to creep higher, with the 1.5mln people looking for jobs in the three months to August being a three-year high of 4.5%, and on Wednesday we will get the latest official figures.
While the ILO rate is expected to drop to 4.3%, as ever, investors should look past the headline number for the more telling figures, including job vacancies and the more timely claimant count for October.
Claimant count, which includes those without work and those needing to claim Universal Credit, hit 2.7mln in September, more than doubling since March when the first lockdown came in.
Despite the government’s extension of the furlough scheme this week, to the end of next March, the jobless rate has started tick higher again, with more FTSE companies announcing big jobs cuts and other big names such as John Lewis also axing staff as various industries react to the new world.
Other key UK data in the week includes retail sales numbers from the BRC on Tuesday and the UK national growth for the third quarter along with GDP and industrial production figures for September on Thursday, when there’s also the second of three speeches in the week from Bank of England governor Andrew Bailey.
Disney under pressure as Magic Kingdom closed by COVID
Over in the US, entertainment giant Walt Disney Co (NYSE:DIS) will deliver earnings for its fourth quarter on Thursday, capping off a difficult year for the house of mouse as the pandemic and resultant theme park and movie theatre closures have hammered its revenue streams.
The company has also had to log large impairment charges due to the launch of its Disney+ streaming service, a move that seemed prescient as the pandemic turned the streaming wars up several notches.
With a second wave of coronavirus now in full swing, and cinemas unlikely to reopen any time soon, this streaming presence will likely remain critical for some time, and as such the company may be of a mind to pour more money into content generation to retain its subscriber base as monthly payments take the place of absent movie ticket sales.
The company’s net positive cash position will also be of note as it awaits a chance to resume film production and reopen the gates to its theme parks.
Significant announcements expected for week ending 13 November:
Monday November 9:
Trading updates: Dignity PLC (LON:DTY), Ultra Electronics Holdings PLC (LON:ULE)
Finals: AVI Global Trust PLC (LON:AGT)
Economic data: US consumer inflation expectations
Tuesday November 10:
Trading updates: Persimmon PLC (LON:PSN), Meggitt PLC (LON:MGGT), Direct Line Insurance Group PLC (LON:DLG), Signature Aviation PLC (LON:SIG)
Interims: DCC PLC (LON:DCC), Electrocomponents PLC (LON:ECM), Land Securities Group PLC (LON:LAND), Oxford Instruments PLC (LON:OXIG), Renewi PLC (LON:RWI), Zoo Digital Group PLC (LON:ZOO), Premier Foods PLC (LON:PFD)
Economic data: UK unemployment
Wednesday November 11:
Trading updates: Flutter Entertainment PLC (LON:FLTR), Taylor Wimpey PLC (LON:TW.), JD Wetherspoon PLC (LON:JDW), Coca-Cola HBC AG (LON:CCH)
Interims: Great Portland Estates PLC (LON:GPOR), Great Eastern Energy Corp Ltd (LON:GEEC), Renold PLC (LON:RNO), Workspace Group PLC (LON:WKP)
Finals: Beximco Pharmaceuticals Ltd (LON:BXP)
Thursday November 12:
Trading updates: ITV PLC (LON:ITV), Vesuvius Plc (LON:VSVS), Premier Oil PLC (LON:PMO), OneSavings Bank PLC (LON:OSB), Spirent Communications PLC (LON:SPT)
Finals: WH Smith PLC (LON:SMWH)
Interims: Burberry Group PLC (LON:BRBY), National Grid PLC (LON:NG.), B&M European Value Retail SA (LON:BME), Enteq Upstream PLC (LON:NTQ), Mediclinic International Plc (LON:MDC), Norcros PLC (LON:NXR), Picton Property Income Ltd (LON:PCTN), QinetiQ Group PLC (LON:QQ.), Volex PLC (LON:VLX), 3i Group plc (LON:III)
FTSE 100 ex-dividends to knock 9.3 points off the index: Royal Dutch Shell PLC (LON:RDSB), GlaxoSmithKline PLC (LON:GSK), RSA Insurance Group PLC (LON:RSA), Ferguson PLC (LON:FERG)
Economic data: UK GDP, UK trade balance, UK production, US inflation, US jobless claims
Friday November 13:
Interims: Castings PLC (LON:CGS)
Economic data: US PPI, US Michigan consumer sentiment