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Next week on the stock market

What to expect from a selection of FTSE 100, FTSE 250 and selected overseas shares reporting next week.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

Among FTSE 100, FTSE 250 and selected other companies scheduled to report next week:

  • Workspace Group will tell investors if they’re getting a final dividend
  • Wizz Air may clarify its plans for the coming year
  • Pennon’s shareholders get an update on the new dividend policy

FTSE 100, FTSE 250 and selected other stocks scheduled to report next week

01-Jun
Sirius Real Estate Full Year Results
02-Jun
Electrocomponents Full Year Results
Mediclinic International Full Year Results
03-Jun
C&C Full Year Results
Chemring Half Year Results
SSP Group Half Year Results
Wizz Air Full Year Results
04-Jun
Euromoney Half Year Results
Go-Ahead Group Trading Statement
IG Group Fourth Quarter Trading Statement
Intermediate Capital Group Full Year Results
Pennon* Full Year Results
05 Jun
Biffa Full Year Results
Workspace Full Year Results  

*Companies on which we will be writing research.

Workspace Group – Sophie Lund-Yates, Equity Analyst

Workspace Group owns and rents out flexible office space in London. Its shorter leases mean coronavirus could have more of an impact on occupancies and rental incomes, particularly from its hotel and leisure tenants who are being hit hard.

A monthly rent payment structure, rather than quarterly, means the full impact of the virus won’t be known yet. Despite the disruption, the group thinks profit for the year ended March 31 will be in line with expectations, so it’s the outlook statement that’s most important next week. We know there was a “material slowdown” in rental enquiries from late March.

Fortunately the group has considerable headroom on the terms set by its lenders, known as covenants – it can withstand a 61% fall in rental income or 63% fall in asset valuation.

However, Workspace is deferring or reducing rents for its hardest hit tenants, and had collected just half of its rent due at the end of March. The uncertainty means the group hasn’t committed to a final dividend - a big departure from the status quo for a property REIT. Investors will find out next week if they’ll be getting a pay-out.

See the latest Workspace Group share price, charts and how to trade

Wizz Air – Nicholas Hyett, Equity Analyst

Like other airlines, Wizz has seen business collapse during the lockdowns. Passenger numbers were down 35.6% in March and 97.6% in April. Because the group’s financial year ended on 31 March the bulk of the drop won’t be captured in the full year results, and the group still expects to report an underlying profit of €350m to €355m. However, the group will recognise losses on its hedging contracts of between €70m and €80m in respect of March, April and May. This means full year profit is expected to come in between €270m and €280m, compared with €292m last year.

However, investors will be looking to the group’s future, and the messaging here has been somewhat mixed. On the one hand, the group had over €1.5bn in cash on 31 March, is continuing to expand into new markets and when the market normalises management “fully expects” to grow capacity at 15% annually. But on the other hand, the group is cutting salaries across the board, making 19% of its workforce redundant and renegotiating with suppliers.

We can only assume management think demand will take some time to recover, but we may get a clearer picture of the strategy next week.

See the latest Wizz Air share price, charts and how to trade

Pennon – Emilie Stevens, Equity Analyst

Unlike its peers Severn Trent (SVT) and United Utilities (UU), Pennon hasn’t yet said what it expects to pay out to shareholders over the next five year pricing period. For the last five, the policy has been to increase the dividend each year by at least 4% above inflation. But with life about to get tougher for the water companies, the group may follow others in making the pay-outs less generous. Both SVT and UU had both announced plans to increase the dividend each year by inflation only.

In the context of the current environment, where around half of FTSE 100 companies have cut or suspended dividends that certainly stands out. But that’s really what a utility investment aims to do – keep paying a dividend come rain or shine.

UU took investors by surprise last week, saying it would keep its dividend plan under review until the impact of coronavirus becomes clearer. Which shows that while insulated, utilities are not immune from the crisis. Customers unable to pay their bills are already denting profits.

However, having recently sold its recycling business Viridor for £4.2bn, Pennon’s in a comfortable position. The group will have the cash on hand to be generous if it wants to be, but we wouldn’t rule out a more cautious approach quite yet.

See the latest Pennon share price, charts and how to trade

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Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by Thomson Reuters. These estimates are not a reliable indicator of future performance. Yields are variable and not guaranteed. Past performance is not a guide to the future. Investments rise and fall in value so investors could make a loss.

This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication. Non-independent research is not subject to FCA rules prohibiting dealing ahead of research, however HL has put controls in place (including dealing restrictions, physical and information barriers) to manage potential conflicts of interest presented by such dealing. Please see our full non-independent research disclosure for more information.


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    Important notes

    This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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