Tuesday could have many ups and downs, including potential Brexit developments and new coronavirus restrictions for London after a surge in infection rates.
Already the business diary is fairly busy, with UK unemployment data due at 7am after a steady worsening of the figures in recent months, with a jump to 4.8% in September and the Treasury forecasting numbers will grow to peak in coming months, with November’s claimant count rate already at 7.3%.
Among the company news, there should be full-year results from commercial property landlord Shaftsbury PLC (LON:SHB), although investors are unlikely to expect a positive performance as most of the group’s portfolio of properties in London’s Chinatown, Soho, Fitzrovia and Covent Garden is likely to have been hammered by the effects of the pandemic, with reports that the capital is being moved into tougher, Tier 3 restrictions adding to the gloom.
These concerns have been reflected in the shares, which are trading around a third below the company’s last net asset value (NAV) of 878p per share. As a result, the value of the firm’s portfolio is likely expected to drop, possibly taking its rental income with it.
This view is reflected in consensus estimates, with analysts expecting the NAV to fall further in the year to the end of September 2020 to 750p.
Investors will also be looking at the group’s vacancy rate as the economic fallout of the pandemic continues to shutter businesses across the UK.
Analysts at UBS are forecasting a NAV decrease of 14% to 752p per share and said they will be focusing on the firm’s dividend status and rent collection.
Purplebricks should stack up well
Focused on a different area of the property market, online estate agent Purplebricks Group PLC (LON:PURP) will be posting interim results on the same day.
Results are likely to be well ahead of forecasts, trading update revealed last month.
Residential instructions were said to be up around 8% on last year, which analysts at UBS expect to result in underlying profit (EBITDA) of around £4mln compared to previous guidance of at least £3.5mln.
Although it has a beneficiary of the rebound in the housing market, the company said now is “too early” to extrapolate this trend into the second half of the year, due to uncertainty arising from the pandemic as well as the looming end of the UK government’s stamp duty holiday.
Talking of holidays…
The FTSE 250-listed group, which runs stores under its own brands such as Upper Crust and Camden Food Co, as well as for the likes of Burger King, Starbucks and Jamie’s Deli, said in a pre-close statement in September that it expected second-half sales to be down around 86% year-on-year to £1.3bn.
While there was a slight recovery in the air sector over the summer, the rail sector remained very weak, with underlying losses expected to be in the middle of the £180mln-£250mln guidance range, with cash outflow of £250mln-£270mln.
City analysts expect a pre-tax loss of £238mln, compared to last year’s profit of £197mln.
As with many other companies, the outlook will be of most interest, where the market is currently expecting broadly flat sales of £1.4bn and a slightly lower loss.
“We continue to see a roadmap to reaching profitability in the second half next year, although recent news flow may moderate the pace of recovery in the first half,” analysts at Shore Capital said.
Tuesday December 15:
Interims: Purplebricks Group PLC (LON:PURP)
Economic announcements: UK unemployment, US production