The coming week will see results and updates from a number of well-known retail and consumer brands, notably Primark owner AB Foods and Domino’s Pizza.
There will also be updates from the UK’s major listed miners as well as comparison site Moneysupermarket, housebuilder Taylor Wimpey and pest control group Rentokil.
On the macro front, UK unemployment and inflation data will be key releases alongside retail sales and consumer confidence data. There will also be flash PMI readings from the UK and the US.
AB Foods to release interims a week after Primark UK reopenings
Associated British Foods PLC (LON:ABF) is dropping its half-year results on Tuesday, which should not come as a big surprise after the FTSE 100 group issued four trading updates since the full-year results in November.
It has been an intense few months since, with restrictions severely hampering Christmas trading for its Primark arm, which doesn’t have an e-commerce platform.
In February, the company said closures of its Primark stores have caused an estimated GBP1.1bn loss in sales with a GBP650mln cash burn.
Following phased reopenings in many of its markets, it forecast that 83% of its retail selling space should be trading by April 26, however many governments make sudden changes to their lockdown rules.
The UK allowed non-essential shops, including Primark, to reopen on April 12, so AB Foods may comment on that, while investors will want to hear updates on the cash burn.
The market is also interested in its other divisions (Grocery, Sugar, Agriculture and Ingredients), which got a boost from the stay-home orders and may expect sales to normalise as it has happened for other pandemic winners.
Analysts at AJ Bell are expecting a full-year payment of 36p per share after dividends were suspended throughout last year, which would amount to GBP285mln in total.
Moneysupermarket eyed for second half outlook
With lockdown having kept people at home for most of the last year and for the first months of 2021, demand for travel and car insurance is unlikely to have helped things at comparison site Moneysupermarket.com Group PLC (LON:MONY), which will report a trading update on Tuesday.
In February, the company reported a 24% decline in profits for 2020 as a result of the effects of the pandemic, adding that the outcome for 2021 depends on how quickly the UK economy comes out of lockdown.
With the UK government having since set out a roadmap for easing lockdown, parts of the economy reopening and some movement restrictions being lifted, investors will be looking to see if the firm has managed to get more clarity on its performance for the rest of the year.
Consensus forecasts for underlying earnings in 2021 are currently between GBP96.4mln to GBP128.8mln, but reaching the upper end of the consensus range will require strong and rapid recovery in both Money and travel-related channels. As a result, investors will be watching closely to see if the company makes any changes to these predictions.
Miners unearth updates
Four of the UK’s top listed miners issue updates on Wednesday and the omens look good.
Iron ore and copper prices have risen steadily since the start of the year, with iron at its highest for weeks helped by rising steel demand.
Results have already reflected the improving environment. Rio Tinto posted underlying earnings of US$23.9bn in 2020 and raised its dividend by 26%.
BHP also reported a bumper first half with revenues up by 15% to US$25.6bn, which it accompanied with a massive 55% dividend raise.
Expect more of the same on Wednesday, with JP Morgan saying it expects Rio Tinto and BHP to break their previous earnings records this year.
The previous high was in 2011-12, but since then capital spending has been cut back and their operations become much more efficient, which should mean huge cash inflows.
Indeed, “We forecast Rio Tinto (OW) and BHP (OW) will pay the #1 and #2 largest US$ corporate dividends in MSCI Europe index”, the broker said this week.
Of course, the big problems lie outside the numbers with BHP still negotiating over the compensation for the Samarco Dam disaster in Brazil in 2015.
In March, meanwhile, Rio’s chairman Simon Thompson became the latest senior executive to announce he would stand down in the wake of the dynamiting of the aboriginal site at Juukan Gorge in Australia.
Both companies are now flagging up/virtue signalling their ESG efforts and there is likely to be as much emphasis on those as the financial numbers.
Antofagasta (LON:ANTO), which also reports Wednesday, is another of Chile’s premier copper producers.
The FTSE 100 group posted a better-than-expected increase in underlying profits in 2020 as lower costs and higher copper and gold prices outweighed a decline in production.
The Chilean-based miner was upbeat about copper prices for the current year, something that should show through in the tone of the statement.
Goldman Sachs, this week published an upbeat tome on copper though Antofagasta was not one of its favourites.
The miner has an attractive portfolio of growth options (Los Pelambres, Centinela), but it is still in the investment phase, said Goldman, with potential capital spending of US$4bn (2021-2025) expected to weigh on free cash flow.
Taylor Wimpey to lay the optimism on with a trowel
With the government perpetually in its corner, the trading update from Taylor Wimpey PLC (LON:TW.) is likely to be a self-satisfied affair.
The 2021 selling season has started well, following on from the stronger than expected recovery of the housing market in the second half of 2020.
Demand in the first two months of 2021 was said to be strong, as well it might be given low interest rates and the stamp duty holiday implemented by the housebuilder’s friends in the government. That stamp duty holiday was extended in this year’s Budget, as most people expected it would be.
The effect is likely to be that house prices head higher again, in which context it was interesting that Taylor Wimpey said in March it expects to build a smaller proportion of affordable homes than usual in 2021, at around 17%.
The proportion of affordable homes in its portfolio is expected to return to historic levels in 2022.
The net private sales rate from January 1 to February 21 was 0.89, down from 0.94 in the corresponding period of 2020, so investors will be watching to see in which direction that rate has moved.
Rentokil eyed for hygiene demand news
A trading update from extermination and hygiene services group Rentokil Initial PLC (LON:RTO) on Thursday will be eyed by investors for how the company expects its pest control business to perform as lockdown restrictions are eased, as the segment had been held back somewhat by the pandemic.
Meanwhile, there will also be interest in whether the firm’s hygiene and disinfection services, which boomed last year due to COVID-19, can maintain the same elevated level of demand going forward.
Domino’s pandemic panacea for waning sales growth
Just as the market was worrying about the ability of Domino’s Pizza Group PLC (LON:DOM) to keep the top-line motoring, along came the pandemic.
The pizza delivery outfit saw like-for-like system sales grow 10.3% in 2020, putting 2019’s 3.7% growth in the shade.
Trading in the first two months of 2021 started strongly with the company reporting “exceptional trading over the new year period” as it recorded its highest-ever sales week.
Domino’s system in the UK and Ireland has grown to a point where there are now some 70 franchisees, described by Domino’s as “very successful”, with more than 1,200 stores in the network but it wants more.
we can do more. We want to attract new franchisees to the system and reinforce our industry-leading capabilities to better position all franchisees for growth.
Relations with the franchisees have not always been stress-free and analysts will be looking to see what plans the relatively new management has to mend fences with its franchisees.
On top of that, they will, of course, be looking to see whether the like-for-like sales rate in 2021 has topped 2020’s 10.3%.
Tuesday sees the release of a slew of jobs data and weekly earnings figures and inevitably the focus will be on how hard hit the economy has been hit by the coronavirus (COVID-19).
In February, the claimant count rate was 7.5% while the ILO unemployment rate was 5.0%.
Average weekly earnings in the three months to the end of February were up 4.8% on the prior year, or 4.2% excluding bonus payments.
The day after the earnings data comes the inflation data for March.
The retail price index is tipped to show a 1.9% year-on-year increase, up from 1.4% in February, while the consumer price index is expected to see the inflation rate rise to 1.0% from February’s 0.4%.
Sticking with retail matters, Friday will see retail sales data for March, which will make for interesting reading as the year-ago data starts to include data from lockdown periods.
Netflix, Johnson & Johnson and Intel among big names in US calendar
On the other side of the Atlantic, US earnings season will get into full swing with results from a large number of big names.
Monday will see quarterly results from soft drinks giant Coca Cola Co (NYSE:KO), computing firm IBM (NYSE:IBM) and United Airlines Holdings Inc (NASDAQ:UAL), while Tuesday will bring figures from streaming giant Netflix Inc (NASDAQ:NFLX), pharma firm Johnson & Johnson (NYSE:JNJ), consumer goods group Procter & Gamble Co (NYSE:PG), tobacco group Philip Morris International Inc (NYSE:PM), motorcycle maker Harley-Davidson Inc (NYSE:HOG) and arms maker Lockheed Martin Corp (NYSE:LMT).
Later in the week, investors will see earnings releases from other major brands such as mobile network Verizon Communications Inc (NYSE:VZ), computer chip maker Intel Corp (NASDAQ:INTC), Snapchat owner Snap Inc (NYSE:SNAP) and credit card group American Express Co (NYSE:AXP).
Significant announcements expected for week ending 23 April:
Monday April 19:
Tuesday April 20:
Trading announcements: Moneysupermarket.com Group PLC (LON:MONY), Petra Diamonds Ltd (LON:PDL), Avast PLC (LON:AVST), City of London Investment Group PLC (LON:CLIG), Integrafin Holdings PLC (LON:IHP), Jupiter Fund Management PLC (LON:JUP)
Interims: Associated British Foods PLC (LON:ABF)
Economic data: UK unemployment
Wednesday April 21:
Interims: Carr’s Group PLC (LON:CARR)
Economic data: UK inflation
Thursday April 22:
Trading announcements: Taylor Wimpey PLC (LON:TW.), Rentokil Initial PLC (LON:RTO), SEGRO PLC (LON:SGRO), Anglo American PLC (LON:AAL), AJ Bell PLC (LON:AJB), Gem Diamonds Ltd (LON:GEMD), Polymetal International PLC (LON:POLY), Centamin PLC (LON:CEY), Domino’s Pizza Group PLC (LON:DOM), RELX PLC (LON:REL), Spectris PLC (LON:SXS), Ibstock PLC (LON:IBST)
FTSE 100 ex-dividends to knock 4.32 points off the index: Glencore PLC (LON:GLEN), BAE Systems PLC (LON:BA.), Fresnillo PLC (LON:FRES), Spirax-Sarco Engineering PLC (LON:SPX), Antofagasta PLC (LON:ANTO)
Economic data: US jobless claims, ECB rates decision, CBI industrial trends
Friday April 23:
Economic data: UK consumer confidence, UK retail sales, UK flash PMIs, US flash PMIs