Shortened week to see results from Wizz Air, B&M and Pennon while US non-farm payrolls dominate macr


The coming week will be a shorter one given the Monday Bank Holiday for the UK and Memorial Day for the US.

As a result, the company news calendar is slightly lighter than usual, however, investors can still expect updates from a number of notable firms including budget airline Wizz Air, retailer B&M and utility group Pennon.

Things will be a bit more active in the macro diary, with the all-important US non-farm payrolls on Friday to be preceded by several PMI readings from the UK and US.

Gooch and Biffa kick things off

After the long weekend, Tuesday’s City diary is fairly uncluttered, though there are results pencilled in from waste and recycling specialist Biffa PLC (LON:BIF) and optical technology maker Gooch & Housego PLC (LON:GHH).

Biffa has been in acquisitive form in recent months, agreeing to buy waste collections and recycling assets from Viridor for GBP126mln in May and snapping up the more consumer-focused Company Shop Group, the UK’s largest redistributor of surplus food and household products, for GBP82.5mln in February.

Having been hit hard by lower industrial & commercial (I&C) waste volumes the first coronavirus pandemic lockdowns in the UK, the FTSE 250-listed company said in a statement just before its March 2021 year-end that I&C volumes had stabilised at circa 80% of prior-year levels for the fourth quarter.

Overall group revenues in the third quarter were back up to 97% of those achieved in the same period the year before and fourth-quarter revenues were estimated to be around 92% of last year’s levels.

Management said second-half trading was therefore ahead of expectations and gave guidance for full-year underlying earnings (EBIT) of GBP42-44mln, compared to EBITDA of GBP174mln the year before.

The High Wycombe-headquartered outfit will be expected to give more details on new recycling plants coming on stream, plus the expansion of its closed-loop plastic milk bottle recycling operations, its outlook for the current year and potential for more M&A activity.

Broker Peel Hunt said Biffa is a leader in the circular economy and is expected to deliver an upbeat tone in these results.

Similarly for Gooch, the AIM-listed company confirmed a continued recovery in the industrial laser sector in its own update for its half-year.

Demand for fibre-optics, high-reliability fibre couplers, and life sciences products and services were all said to remain strong.

“We expect this to be gathering pace, with a global scramble for more semiconductor manufacturing capacity underway,” said Peel Hunt.

Wizz Air numbers come in for landing

Full-year results from Wizz Air Holdings PLC (LON:WIZZ) cover the period to the end of March, which is roughly the entire period that the western world was struggling to get to grips with the coronavirus pandemic.

As such, it has been a year to forget for the low-cost airlines, which is expected to announce a loss before interest and tax of EUR473mln on sales of EUR710mln (down from sales of EUR2.76bn the year before).

The company has already warned the market that its post-tax loss is likely to between EUR570mln and EUR590mln.

The focus is likely to be on current trading and the forward bookings for the crucial summer schedule, while the company is sure to emphasise its balance sheet strength as it hangs in there in the hope of better times.

B&M eyes blockbuster finals

B&M European Value Retail (LON:BME), somewhat controversially, has had a pretty good pandemic.

The general merchandise store was able to stay open during lockdown because its product lines include food items, although the retailer is few people’s idea of a grocer.

Its full-year results on Thursday should make happy reading for its shareholders, with the company having tipped the wink to the market that underlying earnings (EBITDA) should fall somewhere between GBP590mln and GBP620mln, up from GBP342.3mln the year before.

In a worst-case scenario, that’s a 72% year-on-year increase in EBITDA, which would be a significant improvement on the 7.1% year-on-year increase seen the year before.

The investment analyst community is expecting EBITDA to clock in at around GBP600mln after the company did the decent thing and repaid rates relief of around GBP80mln.

Things might not roll the company’s way so conveniently now that lockdown restrictions are ending and the market will be keen to hear how current trading is going.

“Given the exceptional growth and increase in profitability in FY20/21e due to greater demand during the Covid-19 pandemic, the company already pointed to forecasting challenges for the year ahead, FY21/22e,” noted UBS.

Workspace counts the cost of lockdown

Final results from office space firm Workspace Group PLC (LON:WKP) on Thursday are unlikely to make for happy reading as the effects of pandemic lockdowns sent demand for offices plunging as home working boomed.

The group reported a loss for the first six months of the year of GBP110.4mln compared to a GBP99.1mln profit the year before, and with demand having yet to bounce back the picture is unlikely to have improved much.

With this in mind, investors are going to keep a close eye on occupancy numbers in relation to pre-pandemic levels as restrictions are eased, as well as how the firm expects the market to pan out over the rest of the year.

One potential benefit for Workspace is that the company may find a new cohort of customers as the rise of flexible working arrangements boosts demand for its co-working spaces, which often feature on-site cafes and studios.

Pennon resurfaces with results

Water firm Pennon Group PLC (LON:PNN) is unlikely to cause many fireworks in its final results on Thursday, having said back in March that it expects to meet its full-year expectations.

Given everyone has been stuck indoors during the pandemic water use is unlikely to have changed much, while the group has also said its cash collection has held up and bad debts are within guidance for the pandemic.

With this in mind, shareholders will be taking an interest in any investment plans the company has after selling its Viridor business last year for GBP3.7bn, which could potentially include some acquisitions or a substantial payout for investors.

Macro matters

As we enter June in the coming week, which is a four-dayer in the UK and US, market watchers will be hungry for a new round of macroeconomic data, especially Friday’s US non-farm payrolls numbers, which is previewed by the ADP and Challenger, Gray & Christmas jobs surveys one day earlier.

The NFP jobs report from the US Bureau of Labor Statistics last month came in way below market expectations with 266,000 jobs added.

“Some economists had expected over one million. The shortfall is being attributed to a shortage of labour, which seems bizarre when the official U3 unemployment rate is 6.1% and the U6 rate is 10.4%,” said analysts at AJ Bell.

“But the theory is that American government stimulus checks and employment support have been so generous many workers are being tempted to stay at home.”

This month, with a week to go, economists have dialled back their forecasts to around 675k, with plenty also saying wage growth may be the number to watch in Friday’s report.

With US inflation having started to pick up, and many people worried it may rise out of control, market analyst Marshall Gittler at BDSwiss pointed out that a number of Federal Reserve policymakers have said the central bank should start “thinking about thinking about” withdrawing some of their extraordinary monetary stimulus.

Other macro data in the week includes UK PMI surveys on manufacturing, services and construction on Tuesday, Thursday and Friday, respectively, plus speeches are expected from Bank of England governor Andrew Bailey on Tuesday and Thursday.

Also, G7 finance ministers meet in London on Friday and Saturday ahead of the June 11-13 G7 Summit in Cornwall.

Significant announcements expected for week ending 4 June:

Monday May 31:

UK Bank Holiday

US Memorial Day

Tuesday June 1:

Trading announcements: CentralNic Group PLC (LON:CNIC)

Interims: Gooch & Housego PLC (LON:GHH), Tekmar Group PLC (LON:TGP)

Economic data: UK manufacturing PMI, US manufacturing PMI

Wednesday June 2:

Finals: Wizz Air Holdings PLC (LON:WIZZ), Bloomsbury Publishing PLC (LON:BMY)

Thursday June 3:

Finals: Pennon Group PLC (LON:PNN), B&M European Value Retail SA (LON:BME), Braemar Shipping Services PLC (LON:BMS), discoverIE Group PLC (LON:DSCV), NewRiver REIT plc (LON:NRR), Workspace Group PLC (LON:WKP)

Interims: Chemring Group PLC (LON:CHG)

FTSE 100 ex-dividends to knock 5.1 points off the index: Kingfisher PLC (LON:KGF), Associated British Foods PLC (LON:ABF), Scottish Mortgage Investment Trust PLC (LON:SMT), National Grid PLC (LON:NG.)

Economic data: UK services PMI, US ADP employment data, US jobless claims, US services PMI, US non-manufacturing PMI

Friday June 4:

Economic data: US non farm payrolls, UK construction PMI


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