The supermarket sector will be under the microscope alongside Tuesday morning’s rush of results and other announcements.
Data from Kantar will reveal how much money is shifting back to the grocers’ stores and how ‘sticky’ online shopping is proving within the average British household, especially with most over-65s now vaccinated.
A month ago, supermarkets saw their busiest in-store period in more than a year as the number of shopping trips increased 4% in April compared to March, with older shoppers accounting for nearly half of the increased footfall.
“While the market may fluctuate between growth and decline in the months ahead, depending on the year-on-year comparison being made, the fact that trip numbers are up and basket sizes down suggests that habits are slowly returning to normal,” Kantar’s Fraser McKevitt said.
But Ocado Retail, the UK joint venture between Ocado Group PLC (LON:OCDO) and Marks & Spencer Group PLC (LON:MKS) was still showing the fastest year-on-year growth, though it slowed to 27.5% from 33.9%.
Aveva also in state of flux
Industrial software group AVEVA Group PLC (LON:AVV) will report final results on Tuesday and may still be reeling after chief executive Craig Hayman signalled his intention to quit for personal reasons.
This was just a few weeks after the FTSE 100 group completed its US$5bn acquisition of data management software firm OSIsoft, which was agreed last August.
A third-quarter update in January revealed strong renewals helped to improve revenue growth to around 1.5% for the nine months, while recurring revenues grew 10% to comprise 68% of total group revenue in the period.
OSIsoft meanwhile achieved billings growth of 8.5% for the year to December 31.
Hayman said at the time the group order pipeline for the remainder of the year was “solid”.
The main focus with results will be profitability and the outlook, with the City consensus looking for underlying earnings (EBIT) of £210mln for AVEVA as a stand-alone AVEVA.
As an enlarged group, the pro forma forecast is for sales of £1.2bn and EBIT of £328mln.
“In terms of the outlook, Aveva will likely acknowledge the benefits of the cadence of large deal renewals to FY 21, with fewer multi-year renewals in FY 22 creating a modest headwind to growth, but with OSIsoft on board and revenue synergy targets likely to be targeted as early as FY 22, a ‘high single-digit’ pro forma growth outlook is likely with some margin improvement also anticipated as cost synergies come through and FY 21’s COVID-related headwinds unwind,” said UBS.
Shares in the company, having near quadrupled in the previous three years, have struggled to regain their highs from February 2020, down 22% since.
Retail rebound could be the saviour of Shaftesbury
Shares in the Covent Garden and Soho landlord are down more than a third since the start of last year, not surprising with the complete closure of most of London’s West End during the pandemic and a near-total absence of tourists and office workers.
After writing down the value of its portfolio 18% to £3.1bn and announcing a big loss for its last full year, City analysts expect EPRA earnings per share of around 2.3p for the six month period, down 72% compared to the same period a year ago, driven by the £307mln equity raise in October and lower rent collections.
The market also expects net tangible assets to be 613p, down 18% since the year-end driven by negative revaluations across the portfolio.
Property industry data showed valuations for Central London shops decreased 10% from September 2020 to March 2021.
“We will be looking closely at any signs of improved operations given the recent reopening and easing of restrictions,” said UBS.
Susannah Streeter at Hargreaves Lansdown said: “Now the company is adjusting to the new normal, trying to offer tenants more flexibility, shorter leases and the chance of sharing the risk via turnover rents. This adaptability and nimble attitude to meet changing business needs should stand Shaftesbury in good stead as the economy recovers. Shaftesbury has also worked with councils to encourage the alfresco dining revolution, which is rippling through the city, which could prove a positive long-term benefit if given the right support.”
Significant announcements expected on Tuesday May 25:
Finals: AVEVA Group PLC (LON:AVV), Big Yellow Group PLC (LON:BYG), Calnex Solutions PLC (LON:CLX), Electrocomponents PLC (LON:ECM), Helical PLC (LON:HLCL), Hurricane Energy PLC (LON:HUR), Speedy Hire PLC (LON:SDY), Warehouse REIT PLC (LON:WHR)
Economic data: UK public sector borrowing, US house prices