Kingfisher, easyJet, National Grid in the spotlight for Thursday


Try to get a patio heater or some gizmo designed to make socialising in the garden a bit more palatable and you probably won’t be able to find one for love nor money, which bodes well for the fiscal first-quarter trading update from Kingfisher PLC (LON:KGF).

The DIY retailer, which owns the B&Q, Screwfix, Castorama and Brico Depot brands, has had a blindingly good pandemic, as householders have spent their time in lockdown improving their homes.

In March, Kingfisher reported a 7.2% rise in sales to GBP12.3bn in the year to end-January 2021, so that’s the sales growth rate that it has to beat to keep traders interested in its shares. The UK led the improvement with revenues rising 11%% with France 5% ahead.

“In terms of taking advantage of the DIY boom during the pandemic, B&Q owner Kingfisher has nailed it. As people rolled up their sleeves and got stuck into home improvements during lockdowns, sales and profits surged with a 7.1% rise in like for like sales,” said Hargreaves Lansdown’s Susannah Streeter.

“With the working from home revolution unlikely to fully unravel and demand for home office space set to continue, it should keep sales brisk for DIY projects. We should also find out in this trading update if a surge in garden makeovers, ready for post lockdown outdoor social lives, has helped revenue streams. As more people leave furlough schemes and return to full time working once more, the DIY craze is likely to wane a little, although a buoyant housing market is likely to keep our passion for decoration relatively high,” she added.

“The forecast of a brighter economic outlook with growth prospects higher also bodes well for the company, given that people may have more money in the spending pot to splash on building projects.,” Streeter concluded.

easyJet is the next airline on results runway

easyJet PLC (LON:EZJ) interims follow a statement last month where it guided to a pre-tax loss of GBP690-730mln and said it had liquidity of roughly GBP2.9bn.

Broker Peel Hunt said it believes this amount of cash “should be more than sufficient, as long as travel restrictions are eased over the course of the spring and summer and are not reintroduced over the next couple of years at least”.

The FTSE 250-listed flier’s holidays business is “a key differentiator” to other airlines, the analysts said, but the UK’s progress on traffic light tiering, vaccine passports and PCR testing has been “disappointingly slow”.

“Whilst progress on costs has been encouraging, this is unlikely to be enough to offset the challenges that further delays will bring.”

National Grid to experience few shocks in finals

Full-year results from National Grid PLC (LON:NG.) are unlikely to set the pulses racing but shareholders will expect more details on the company’s “strategic portfolio repositioning”.

This follows March’s GBP7.8bn acquisition of UK-focused Western Power Distribution (WPD), which Berenberg reckons will enhance group earnings by over 15% once it beds in.

Repositioning the business with the WPD deal increases National Grid’s focus on electricity networks to around 70% of regulated asset value (RAV) and the UK to around 60% of group underlying earnings (EBIT).

As a utility company, National Grid has a reliable revenue stream with which to service its debt but nevertheless, analysts will be keeping an eye out for the debt position; Berenberg reckons it could grow to an eye-watering GBP37.9bn by March 2024.

Thursday May 20

Trading announcements: Kingfisher PLC (LON:KGF), Watches of Switzerland Group PLC (LON:WOSG)

Finals: Royal Mail PLC (LON:RMG), National Grid PLC (LON:NG.), QinetiQ Group PLC (LON:QQ.), Young’s and Co Brewery (LON:YNGA), N Brown Group PLC (LON:BWNG)

Interims: easyJet PLC (LON:EZJ), Euromoney Institutional Investor PLC (LON:ERM), Nexus Infrastructure PLC (LON:NEXS)

FTSE 100 ex-dividends to knock 9.28 points off the index: Tesco PLC (LON:TSCO), GlaxoSmithKline PLC (LON:GSK), Unilever PLC (LON:ULVR), Bunzl PLC (LON:BNZL), Pershing Square Holdings Ltd (LON:PSH)

Economic data: US jobless claims


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