Big caps to dominate in coming week with Royal Mail, Vodafone, Imperial Brands, British Land and SSE

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The FTSE 100 index will dominate another trading week as constituents Royal Mail PLC (LSE:RMG), Vodafone plc, Imperial Brands PLC (LSE:IMB), British Land Company PLC (LSE:BLND) and SSE PLC (LSE:SSE) are due to release updates in the coming week.


The mix’n’match of sectors will be seen elsewhere in the London market, with Biffa PLC (LSE:BIFF) and CMC Markets PLC (LSE:CMCX) among the key names on the corporate calendar.


Macro matters


Many macroeconomic indicators are still being distorted by the pandemic and that certainly goes for employment data.


Tuesday will see the UK employment rate for September released with economists expecting no change from the previous month’s 4.5%.


Average weekly earnings, out the same day, are expected to have risen by 5.9%, which represents a slowdown from August 7.2% increase.


“The Bank of England has focused its attention on the labour market as its key variable for deciding whether to raise rates. If it sees the unemployment rate holding steady despite the end of the government’s furlough scheme in September, and especially if it continues to see growth in average earnings running well above inflation, it may be more willing to trigger the oft-mooted ‘some modest tightening of monetary policy.’ Of course Wednesday’s UK CPI [consumer price index] will be the proof of the pudding, and an expected sharp rise in inflation there may suggest that the pudding is over-egged, as they say in Britain, whatever that means,” said Marshall Gittler of BDSwiss.


I would explain to Gittler what over-egging the pudding means but I am too busy so will have to take a rain-check (whatever that means).


On the subject of consumer prices, the year-on-year increase is expected to rise to 3.8% in October from 3.1% in September. The month-on-month increase is tipped to be 0.8%, following September’s 0.3% rise.


Friday sees retail sales figures for the UK released. Rather like Dr Who episodes in days of yore these are probably best viewed from the safety of behind the sofa, although there might be some lift from worried shoppers getting their Christmas shopping done even earlier this year thanks to the well-publicised stock shortages.


Imperial Brands may be all about ESG


Imperial Brands plc, whose results are out on Tuesday, cunningly removed the word “tobacco” from its name a few years back (most people still call it Imps, though) but its mediocre share price performance this year could be down to investors paying more heed to environmental, social and governance (ESG) issues, suggests Russ Mould at AJ Bell.


“On a headline basis, analysts are therefore expecting for the year to September 2021:


o Stick Equivalent volumes of 231bn, down 3.3% from 2020’s 239bn


o Sales of GBP7.7 billion against GBP8bn last year, including NGP sales of GBP203mln


o Adjusted operating profit of GBP3.3bn against GBP3.5bn


o A dividend of 140p per share, up from 137.7p”


“Shareholders will also look to the cash flow statement as it is cash that funds the all-important dividend, which currently equates to yield of 9%. Cash flow in the first half was weaker than it had been the year before, thanks to a reversal of 2020’s inflow from distribution business Logista,” Mould added.


Hello, it’s Vodafone


Vodafone PLC’s interims on Tuesday are set to be one of the biggest stories during the week.


Shares have been trading sideways over the past year or so, after May’s full-year results did not go down that well.


The FTSE 100 telecoms group targeted mid-single digit percentage growth in earnings and cash flow and a minimum dividend of EUR0.09 a share which seemingly disappointed the market, even though they came along major reshaping plans.


July’s first-quarter update underwhelmed even though results came ahead of market expectations.


“Besides looking at the trend in quarterly revenue growth, analysts will look to benchmark these first-half results against the two pieces of guidance that management has offered for the full year,” commented AJ Bell investment director Russ Mould and financial analyst Danni Hewson.


“The company is looking to redevelop what it calls a progressive dividend policy, but analysts are looking for no change this year. That implies an unchanged first-half payment this time around of EUR0.045, although currency movements may mean the figures moves around a little more in sterling terms. Note also that Vodafone continues to run a share buyback programme.”


How is British Land’s portfolio doing?


Fellow FTSE 100 constituent British Land Company PLC will release its half-year results mid-week, coming after a particularly challenging time.


The landlord has been threatened by the rise of homeworking and increasing demand for e-commerce, though conditions have improved recently.


Retail parks have bounced back well and investors will keep an eye on those in the update.


“To cope with the shifting sands of the way we will work post pandemic, it’s gone upmarket in terms of office space by focusing its efforts on providing high-end campus style developments. By providing a high-end mix of retail, office, meeting and housing space, it aims to give firms the flexibility they need,” said Susannah Streeter, senior analyst at Hargreaves Lansdown.


“This should mean its flagship assets will be more resilient, however lower demand overall is still likely to hit rental rates and property values more broadly. The group is also increasing its exposure to warehouses to service increase demand for e-commerce. Rent collection rates have been accelerating and investors will be watching for signs that trend is continuing.”


SSE to make for an interesting read


The update from SSE Plc won’t be short of talking points – from energy market volatility, regulations and activist shareholders.


Back in September, the utility firm was forced to dismiss speculation that it could be broken up, amidst pressure as activist hedge fund Elliott Management built up a stake. Billionaire Paul Singer’s outfit had held meets with representatives from SSE, as well as some of its major shareholders.


The FTSE 100 energy group in September guided that it would update investors in the half-year result, promising details of higher investment for the period to 2026, sources of funding and the company’s vision for further growth into the 2030s including renewable and flexible capacity.


On the regulatory front, late last month, SSE expressed disappointment over the UK’s competition watchdog’s final verdict in their appeal against a new price regime.


The CMA did not uphold its appeals “on the flawed Cost of Equity, or on changes to how Transmission Network Use of System Charges are recovered and the associated risk of under-recovery this presents.”


Financials and dividends will of course be in focus, even if much of the commentary will be looking at the bigger picture.


CMC Markets to issue interims


Wednesday will also be the turn of CMC Markets PLC’s interims, where revenue is expected to come in at GBP126mln.


“With continuing investment being made in the business, half-year profits are likely to be materially lower than the exceptional period in the first half of last year. We view the investments being made as exciting for the future potential of the group,” analysts at Peel Hunt commented.


“Part of the plans are building a retail investment platform in the UK, utilizing many of the core strengths of the existing business (trading and risk management being two).”


There’s some Royal Mail in the mail


There’s some tolerance for bad news as Royal Mail Group Plc releases half year results on Thursday, according to analysts at UBS.


“We believe the share price already accounts for some incremental cost headwinds associated with the current labour shortages/increasing wage inflation in the UK and Germany (minimum wage likely to be lifted to EUR 12/h starting next year),” the Swiss bank said.


“We believe a message from the company proving good progress on achieving the productivity improvements and managing well the cost inflation as positive for the share price.”


The bank, in a preview, added: “The company already reported volume trends after the first 5 months of the financial year in September.


“The focus will be on September/October volumes and price/mix. In UK domestic parcels we would expect low single digit growth year-on-year in Sept/Oct on the back of easy comps, with comps getting tougher for the second half.”


Bin day for Biffa


Biffa PLC is releasing its interims on Thursday, and the market already knows that trading for the first five months was in line with expectations.


September isn’t expected to have seen any slowdown, after volumes rose back to slightly above pre-pandemic levels.


“There might be some impact from higher fuel prices, but these should be mitigated by some dynamic pricing, as well as by continuing high recyclate prices. We expect both the recent acquisitions and the EfW developments to be on track,” analysts at Peel Hunt said.


“Further acquisitions are now unlikely for at least 18 months in our view, given the higher level of leverage, hence investors are likely to focus on the EfW projects, which we believe will create substantial value, possibly to be crystallised in cash following the plant’s completion. Our expectation remains that valid ESG stocks, such as those in the Waste sector, will continue to be re-rated higher.”


Significant announcements expected for week starting Monday 15 November:


Finals: Nightcap PLC (AIM:NGHT)


Interims: Totally plc


Trading announcements: Kingspan plc


AGMs: MJGleeson plc


Economic data: Wholesale Price Index (GER), Balance of Trade (EU)


Tuesday 16 November


Finals: Focusrite PLC (AIM:TUNE), Imperial Brands plc, Revolution Bars Group PLC (AIM:RBG)


Interims: Gear4music plc, Homeserve PLC (LSE:HSV), Mckay Securities (LSE:MCKS) plc, Premier Foods plc, Vodafone Group PLC (LSE:VOD)


AGMs: Craneware plc, Dunelm Group PLC (LSE:DNLM), New Star Investment Trust plc,


Economic data: Employment rate (UK), Claimant Count Rate (UK), GDP (Preliminary) (EU), Industrial production (US), Import and export price indices (US), Capacity utilisation (US), Business Inventories (US)


Wednesday 17 November


Finals: Sage group plc


Interims: British Land Company PLC, CMC Markets plc, Experian (LSE:EXPN) plc, Speedy Hire PLC (LSE:SDY), SSE plc, Tatton Asset Management PLC (AIM:TAM), Workspace Group PLC (LSE:WKP)


Trading announcements: Safestore Holdings (LSE:SAFE) plc


AGMs: Amte Power plc, Berkely Energie Limited, BMO real estate investments limited, Celtic plc, Henderson Eurotrust plc, Ncondezi Energy limited, Pacific Horizon Investment Trust (LSE:PHI) plc, Picton property income ltd, Rainbow Rare Earths Limited


Economic data: Producer Price Index (UK), Retail Price Index (UK), Consumer Price Index (UK), MBA Mortgage Applications (US), Building Permits (US), Housing Starts (US), Retail Sales (US), Crude Oil Inventories (US).


Thursday 18 November


Finals: Daily Mail and General Trust (LSE:DMGT) plc, Euromoney Institutional Investor (LSE:ERM) plc, Grainger Plc (LSE:GRI)


Interims: Biffa plc, Charles Stanley (LSE:CAY) Group plc, finnCap Group plc, Halma PLC (LSE:HLMA), Investec PLC (LSE:INVP), Jet2 PLC (AIM:JET2), Mitie Group PLC (LSE:MTO), Redcentric pls, Royal Mail plc


Trading announcements: Close Brothers Group (LSE:CBG) plc


AGMs: Avingtrans PLC (AIM:AVG), Close Brothers Group plc, Eagle Eye Solutions Group PLC (AIM:EYE), Finsbury Food Group (AIM:FIF) plc, Ironridge Resources Limited, Litigation Capital Management Limited, Maestrano Group PLC (AIM:MNO), Thorpe plc, JD Wetherspoon Plc (LSE:JDW)


Economic data: Consumer Price Index (EU), Initial Jobless Claims (US), Continuing Claims (US), Philadelphia Fed Index (US).


Friday 19 November


Interims: Carclo (LSE:CAR) plc, Great Portland Estates (LSE:GPOR) plc, Nextenergy Solar Fund Limited, Wincanton PLC (AIM:WIN)


Trading announcements: Kingfisher plc


AGMs: Diurnal (AIM:DNL) Group plc, Eenergy Group plc, Kcr Residential Reit plc, Keir Group plc, Marble Point Loan Financing Limited, One Heritage Group PLC (LSE:OHG), Petra Diamonds (LSE:PDL) Limited, Tcs Group Holding plc


Economic data: GFK Consumer Confidence (UK), Retail Sales (UK), Public Sector Net Borrowing (UK), Producer Price Index (GER), Current Account (EU)

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