Tuesday will bring half-year results from tobacco giant Imperial Brands PLC (LON:IMB), the last numbers before new boss Stefan Bomhard takes over in July.
It has not been a smooth-smoking time for the maker of Lambert & Butler and Gauloises gaspers and Blu e-cigarettes, having over the past year stubbed out its target of 10% dividend growth and changed both its chief executive and chairman in the wake of a big profit warning last September related to its vaping business.
Among the half-year numbers, investors might expect an update group’s debt position following the recent sale of its Cuban cigars business for £958mln.
In its latest updates, the FTSE 100 group maintained that there had been no material impact from the coronavirus pandemic on its business so far, guiding to first-half adjusted earnings per share down 10% due to around £85mln of writedowns and provisions in vaping.
With Imperial being one of the few dividend-payers among London’s blue chips, any changes in the payout would be a surprise, with the last financial year seeing payments of 31.3p for the first two quarters, paid in June and September, followed by two of 72p for a total of 206.6p.
An unchanged dividend for this year would imply a dividend yield of nearly 13%, the third-highest level in the FTSE 100, noted analysts at AJ Bell, though they noted that analysts have pencilled in a very slight reduction for the full year to around 202p a share.
“That would be a big shock as Imperial as increased its annual payment every year since it was spun-out of the Hanson conglomerate in 1996.”
Sandwich insights lower Greencore expectations
Tuesday will also see interim results from a business that has not enjoyed such an easy ride in the pandemic, in the shape of Greencore Group PLC (LON:GNC).
Having reached a three-year high in December, shares in the maker of microwave meals, sandwiches, wraps, salads, sushi and soups lost more than half of their value in February and March before rallying hard in April and then diving lower again in May.
Analysts at Jefferies pointed to industry data for the three weeks to 30 April that showed sandwich sales via grocers, Greencore’s main market, dropped 60% – way worse than the 30% drop expected.
“[In March] we expected a short, sharp, shock that the balance sheet would be big enough to take,” analysts commented.
“Now, with more insight post-lockdown, we anticipate a deeper and longer shock — one that the balance sheet is still big enough to take, but which is likely to require a more fundamental re-positioning and adjustment of expectations.”
Unemployment, Powell and oil
UK unemployment figures will be published on Tuesday covering the three months to the end of March, so they will only catch a small effect of the coronavirus lockdown.
Among the various labour market data, there will be more timely data in the form of the claimant count rate for April, showing the shape of joblessness during the pandemic.
Neither figure, however, will show the 7.5mn workers furloughed under the government’s job retention scheme.
Across the Atlantic, Federal Reserve chair Jerome Powell will give a congressional testimony, a day ahead of the release of minutes from the previous Federal Open Market Committee.
US oil prices will also be in focus, said Jeffrey Halley market analyst at Oanda, as the next month’s WTI futures contract expires on Tuesday, an event last month that saw prices fall to unprecedented negative levels.
“Perversely, compared to last month, the pressure is to the upside, with the intra-month rolls skewed in favour of the bulls,” Halley said.
“Although open interest in the June contract has plummeted, CME data still shows an open interest of 55,605 contracts in the June futures. That is a fall of nearly 20,000 contracts from Thursday, but still leaves some 56 million barrels of oil open for the expiry tomorrow.”
Major announcements expected on Tuesday 19 May:
Finals: Speedy Hire PLC (LON:SDY), DCC PLC (LON:DCC), Homeserve PLC (LON:HSV)
Interims: Imperial Brands PLC (LON:IMB), Greencore Group PLC (LON:GNC), Shoe Zone PLC (LON:SHOE), Topps Tiles PLC (LON:TPT), UDG Healthcare PLC (LON:UDG), Avon Rubber PLC (LON:AVON), Hardide Plc (LON:HDD), Renew Holdings PLC (LON:RNWH), Tritax Eurobox PLC (LON:EBOX)
Trading statements: Glenveagh Properties PLC (LON:GLV)
AGMs: Royal Dutch Shell PLC (LON:RDSB)
Economic data: UK unemployment