Deliveroo, insurers and bookmakers in focus for coming week

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The coming week will see results from a variety of notable brands including troubled takeaway app Deliveroo, insurer Aviva and bookmakers Flutter and Entain.


There will also be updates from fund manager Abrdn as well as Holiday Inn owner IHG and package holiday firm TUI.


Meanwhile, the macro diary is likely to be dominated by UK retail sales, GDP and inflation figures due across the week.


Abrdn reports results


Tuesday will see the market given another chance to get used to abrdn, the slightly odd and difficult to pronounce name for the company previously known as Standard Life Aberdeen.


The company is “on a mission to turn around a business that has been exceptionally unexceptional for some time”, according to Nicholas Hyett, an equity analyst at Hargreaves Lansdown.


“The group, now overwhelmingly focussed on fund management, is looking to cut costs while improving investment performance and expanding its distribution network. If it can do all three – charging fees on more money, for more clients, and on a lower cost base – it would be a heady mix for profits – unfortunately it’s also a familiar playbook for any asset manager and not one that always delivers,” Hyett cautioned.


“We’re only in the very early days of the new strategy, and tangible progress next week is likely to be minimal. That won’t stop analysts scrutinising management comments closely – the group has work to do to convince investors it deserves the benefit of the doubt after years of lacklustre results,” he suggested.


The market is expecting that net outflows in the first half will be around GBP2.1bn.


Bookies in the diary


The owners of Ladbrokes and Paddy Power both report half-year results with their shares boosted in the past week by M&A speculation.


Entain PLC (LSE:ENT), which runs bookies Ladbrokes, Coral and Italy’s Eurobet as well as online specialist brands like bwin, Gala Bingo, Party Poker and BetMGM in the States, will report on Thursday, having hit an all-time high on Friday.


This followed reports that bid interest from US partner MGM Resorts is re-emerging after the casino giant had an $11bn (GBP7.9bn) offer rejected earlier this year.


We had a trading update from Entain last month, where it upped its full-year earnings expectations to a range of GBP850-900mln after reporting faster gaming revenue growth in the second quarter.


As the easing of coronavirus restrictions allowed its betting shops to reopen, first-half net gaming revenue (NGR) grew 11%, with retail NGR galloping 359% higher in the second quarter compared to a 99% decline in the first, while online NGR climbed 22% in the second quarter versus 33% in the first.


The US joint venture, BetMGM continued to grow market share, now at 24% across states where it is active and generated a first-half NGR of approximately US$350mln.


As for Paddy Power and Betfair owner Flutter Entertainment PLC (LSE:FLTR), its interim numbers are chalked on the board for Tuesday.


The FTSE 100 group was reported last month to have stalled the planned spin-out and IPO of its FanDuel US sports betting business until next year.


Its last trading update was way back in April, when it reported revenues up 32% in the first quarter, almost all of which originated from its online operations.


Looking ahead, the group said it likely to see “accelerated growth” for its sports betting division in the second quarter of 2021 compared to last year because of the previous impact of the pandemic on the sports schedule, although it said its gaming products are likely to face “more challenging comparatives”.


In a recent note, broker Peel Hunt said the shares, having performed poorly this year, now represent “good value,” as the group averaged 7.7mln monthly players in the first quarter, up 36% year-on-year, and its shift to “more sustainable mass-market gambling” is expected to have continued through the rest of the first half.


IHG hopes for restful results


It would be an understatement to say the hotels sector has been through a rough 18 months but things should be improving for Intercontinental Hotels (LSE:IHG) Group PLC.


Occupancy levels were up to 40% in the first quarter and should have improved further in the second quarter, helped by cut-price deals, which will have hit margins.


UBS is forecasting second-quarter revenue per available room (RevPAR) will be around 36% lower versus the corresponding period of last year and down 50.6% on the same quarter of pre-pandemic 2019.


“The mix of IHG’s recovery is likely to be favourable for its operating leverage as a strong recovery in the Holiday Inn Express is positive for mix and therefore we would see upside risks to IHG’s RevPAR sensitivity guidance of 1%/$15mln towards 1%/$14mln. This would see 1H EBITA [underlying earnings] close to US$160mln,” UBS predicted.


“Given the strong market data in the US and China we expect IHG to suggest a strong exit rate from July which could see some upside risks to consensus for the full year. Sentiment will also likely be driven by the pipeline where we expect to see it broadly flat vs. the 274k rooms reported in 1Q with stable new signings sequentially. IHG will likely update on the improvement plan for c200 hotels (c5% of the total system) where we expect c150 to leave the system this year,” it added.


Deliveroo reheats figures


Deliveroo PLC (LSE:ROO)’s first set of interim results on Wednesday since its lacklustre IPO in April may be greeted with mixed sentiment’s given the rocky ride for the takeaway delivery group so far this month.


While the firm upgraded its full-year guidance in July, it is also planning to exit the Spanish market due to what it said would be a “disproportionate level of investment” required to reach a top-tier market position in the country.


With this in mind, investors are likely to be looking for what the firm will focus on instead as it looks to expand, as well as how transaction volumes have held up as UK lockdown restrictions have eased, lowering the need for consumers to rely on takeaway food.


Admiral comes into view


Insurer Admiral Group (LSE:ADM) PLC will report its interim results on Wednesday, however, the group’s trading update in July already flagged up the key figures, notably the firm’s expectation that profits for the period will be between GBP450-GBP500mln.


The figure has been driven by what UBS analysts said were favourable prior year reserves development in bodily injury claims as well as a lower than expected COVID frequency benefit.


Investors will also be expecting an interim dividend of between 110-125p, partially bolstered by the GBP400mln in proceeds from the group’s sale of its Penguin Portal business, which includes websites such as Confused.com, Rastreator.com and LeLynx.fr.


In terms of outlook, UBS expects UK motor pricing and inflation trends will be a key focus going forward.


TUI hopes for clearer skies


Package holiday giant TUI AG (LSE:TUI) reports a trading update on Thursday, with bookings and cash generation likely to be the key items on the agenda as the firm eyes a rebound from the chaos of the pandemic.


With travel restrictions (mostly) relaxing across Europe, investors will be hoping more bookings have begun to flow in as holidaymakers begin to make plans for trips abroad again, as well as whether the firm’s debt and spending levels are anything to be concerned about.


UBS are estimating revenues of EUR592mln for TUI’s third quarter, as well as an increase in operating expenditure to reflect costs associated with the ramp-up of the summer programme.


The bank has also predicted that passenger traffic will improve between July and September and expected TUI to report capacity at around 60% of 2019 levels, lower than previous guidance of 75%, as ongoing restrictions hampered growth.


Aviva eyed for more strategy news


Half-year results from Aviva PLC (LSE:AV.) come after the insurance & pensions giant reported savings & retirement net flows were at their highest level in a decade in the first quarter.


The group also boasted of its highest first-quarter sales in general insurance for a decade.


Chief executive Amanda Blanc has been like a whirlwind, selling off non-core businesses to raise billions in cash, with the result that the group expects the gearing percentage to be down to around 26% at the half-year stage.


With the shares trading at 395p, up from 325.2p, Morgan Stanley (NYSE:MS) thinks “much of the re-rating from the new strategic plan appears to be priced in”.


I think the market’s focus has shifted from the “reshaping of Aviva’s perimeter to the further operational delivery required post capital return”.


Macro matters


UK data in the coming week starts with retail sector data from the BRC, passes through house prices from RICS before gross domestic product for the second quarter is confirmed on Thursday, along with services, industrial, trade and investment numbers for June.


With global central banks keeping a close eye on inflation, bigger news will be Chinese and US inflation numbers, with the consumer price index (CPI) and producer price index from Beijing on Monday, before Wednesday and Thursday bring US CPI and factory gate inflation for July.


Last month Chinese CPI was up 1.1% on the year, while US CPI was at 5.4%, with respective producer prices at 8.8% and 7.3%.


“Central banks are sticking to their view that the current price rises are, in their words, ‘transitory,’ the short-lived product of economies unlocking, supply-chain disruption and the low base caused by 2020’s recession. Bond markets seem to share this view, looking at how yields on Government paper are sliding lower, although don’t forget that Quantitative Easing schemes are designed to drive them lower,” said analysts at AJ Bell.


They note that not everyone is so sanguine, with some economists and market strategists looking to the classic cycle of higher commodity prices leading to higher factory gate prices, higher consumer prices and higher wages as the real harbinger of inflation, eventually feeding through to higher bond yields and interest rates whether central banks and governments want them or not, with emerging market central bankers raising interest rates in Russia, Brazil, Chile, Mexico, Hungary and the Czech Republic of late.


Significant announcements expected for week ending 13 August:


Monday 9 August:


Finals: Hargreaves Lansdown PLC (LSE:HL.)


Interims: Clarkson PLC, H&T Group Plc (AIM:HAT), PageGroup (LSE:PAGE) PLC, TI Fluid Systems PLC (LSE:TIFS)


Tuesday 10 August:


Trading updates: Bellway PLC (LSE:BWY), Watches of Switzerland Group PLC (LSE:WOSG)


Interims: Abrdn PLC, Derwent London (AIM:DLN) PLC, Flutter Entertainment PLC, Gamesys Group PLC (LSE:GYS), Marshall Motor Holdings PLC (AIM:MMH), Intercontinental Hotels Group PLC, IWG PLC (LSE:IWG), M&G PLC (LSE:MNG)


Economic data: UK retail sales


Wednesday 11 August:


Trading updates: Gem Diamonds Limited (LSE:GEMD)


Interims: Deliveroo PLC, 4Imprint Group PLC, Admiral Group PLC, CLS Holdings (CSE:CLSH) PLC, Hostelworld (LSE:HSW) Group PLC, Spirax-Sarco Engineering (LSE:SPX) PLC, Avast PLC (LSE:AVST), Hill & Smith Holdings PLC (LSE:HILS), Prudential PLC (LSE:PRU), Quilter PLC (LSE:QLT), Phoenix Group PLC


Economic data: US MBA Mortgage Applications, US Crude Oil Inventories, US Inflation


Thursday 12 August:


Trading updates: TUI AG


Interims: Arix Bioscience PLC (LSE:ARIX, FRA:3HY), Arrow Global (AIM:ARW) Group PLC, Aviva PLC, Coca-Cola HBC AG, Entain PLC, Silence Therapeutics PLC, Just Group PLC (LSE:JUST),


FTSE 100 ex-dividends to knock 30.71 points off the index: Next plc, Barclays plc, Rio Tinto PLC (LSE:RIO), Royal Dutch Shell (NYSE:RDS.A) A plc, Royal Dutch Shell B plc, AstraZeneca PLC (LSE:AZN), SEGRO plc, NatWest Group PLC (LSE:NWG), Pearson PLC (LSE:PSON), BP plc, Standard Chartered PLC (LSE:STAN), Fresnillo PLC (LSE:FRES)


Economic data: UK RICS Housing Market Survey, UK Industrial Production, UK GDP, UK Manufacturing Production, US Initial Jobless Claims, US CPI


Friday 13 August:


Economic data: UK inflation

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