AstraZeneca and Royal Mail in the spotlight on Thursday


The world will be eyeing AstraZeneca PLC (LON:AZN) as it releases full-year results on Thursday and whilst the headlines will feature the obvious keywords, there is more going on than just a vaccine.

Although the focus has been on the COVID-19 vaccine developed by Oxford University and the pharma giant’s recent row with the EU, the market will be looking at the FTSE 100 group’s drug pipeline, especially after the recent approvals for cancer and respiratory drugs.

According to Nicholas Hyett, equity analyst at Hargreaves Lansdown, they are “far more important”.

Product sales were moving up in the third quarter and are expected to gather pace into the last three months of the financial year, especially thanks to oncology and new respiratory treatments.

“The key area of weakness for Astra in recent times has been its cash flow and balance sheet position. The group’s failed to cover the cost of the dividend with organically generated cash and as a result net debt has risen,” said Hyett.

“Now sales are delivering robust growth the group needs to reverse that trend – especially as the pending acquisition of Alexion (due to complete in the third quarter) will see the group taking on significantly more debt in the near future.”

Royal Mail on course for FTSE100 return

All of a sudden everything in the garden looks rosy for Royal Mail Group PLC (LON:RMG).

Parcels demand has boomed during lockdown while a deal has just been agreed with its main union the CWU over pay, technology and working hours.

Thursday’s third-quarter trading update also gives new chief executive Simon Thompson a first opportunity to explain his plans for the future.

Thompson hails from Ocado, the supercharged food delivery operation that is now rolling out automated fulfilment centres.

Automation has long been touted as a necessity for the postal service so any plans here will be keenly noted both by employees and investors.

Brokers, meanwhile, have been steadily upping their forecasts for the year to March 2021.

Citigroup has just raised its forecast for underlying profits to £289mln helped by the parcels tailwind, which it reckons has been strong enough for RMG to increase prices giving a boost to margins.

The US broker also expects a statement about the resumption of dividends.

Shares have risen to 421p currently from a twelve-month low of 124p in April 2020, valuing the group at £4.2bn, which might be enough to re-enter the FTSE 100.

Thursday February 11:

Trading announcements: Royal Mail Group PLC (LON:RM.)

Finals: AstraZeneca PLC (LON:AZN), Coca-Cola HBC AG (LON:CCH), Coca-Cola European Partners PLC (LON:CCEP), RELX PLC (LON:REL), Ted Baker PLC (LON:TED), Yamana Gold Inc (LON:AUY)

Interims: MJ Gleeson PLC (LON:GLE)

FTSE 100 ex-dividends: None

Economic data: US jobless claims


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