Superdry investors braced for slump in pandemic sales
Events company Informa, B&Q owner Kingfisher and engineering firm Smiths will also deliver updates
The outlook remains grim for the global events sector, with a recovery in China not enough to offset continued shutdowns in the US and UK. That is bad news for Informa, which is set to downgrade its estimates, according to broker Peel Hunt – with all its eventled divisions likely to post losses.
Analysts at UBS concur that the FTSE 250 group is likely to produce “weak” earnings, but say it should mount a strong recovery next year if a vaccine is forthcoming.
The dramatic return of founder Julian Dunkerton to the board of Superdry was set to be an inflection point for the ailing retailer. The pandemic has muddied the waters substantially since then, with sales likely to have fallen almost a quarter compared to 2019.
Superdry recently secured an extension to its £70m debt facility, so possesses a strong cash buffer, but investors will be keen to hear its outlook for the period ahead. Interim results
Markets holiday (Japan)
“The trend has been the friend” for B&Q owner Kingfisher this year, as lockdown drove a DIY boom, say analysts at Citi. The company is expected to report a solid first-half performance tomorrow, but investors will be watching closely for any signals on how demand is likely to shift in the coming months.
Overall, the group – which dropped out of the FTSE 100 in March before grabbing its spot back in June – has had a good pandemic, with strong online demand putting the wind in new boss Thierry Garnier’s sails as it embarks on a five-year turnaround plan. Keep an eye out for any word on its dividend, which was cancelled as the virus first arrived.
AG Barr, Kingfisher
CBI industrial trends survey (UK); consumer confidence (eurozone); existing home sales (US)
Staffline, Ten Entertainment Full-year
Flash PMIs (UK, Japan, eurozone, US); second-quarter GDP final reading (Spain)
Diversified engineering group Smiths is likely to have felt a mixed impact from the pandemic: while demand for its ventilators has been high, other parts of its operations – such as its oil services division – will have taken more of a hit. In theory, it is supposed to be looking to divest its medical devices division, but with the sale put on hold until the pandemic is over, it is hard to see any looming movement on that front. With regards to the full-year numbers themselves, its revenues are expected to have climbed – but cost pressures are likely to have weighed on Smiths’ bottom line.
Cineworld, Funding Circle, Pendragon, SIG
DFS Furniture, Go-Ahead, Smiths Economics
CBI distributive trades survey (UK); Ifo business climate index (Germany); jobless claims (US)
Water company Pennon is currently “trading below its fundamental valuation”, and opportunities for M&A abound as markets wait to see how the FTSE 100 group spends its leftover change from the Viridor sale, says Royal Bank of Canada’s Alexander Wheeler. Pennon may set its sights towards companies based in the South, he said, adding “we would expect that management is confident on being able to provide further value creation” for shareholders. As for any update on trading figures, expect the typical steady, dull utilities performance. Trading statement
GfK consumer confidence, public sector net borrowing (UK); M3 money supply (eurozone); durable goods orders (US)
Superdry, which updates investors today, is likely to have endured a substantial sales hit