Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
There’s a profit upgrade out from Serco [LON:SRP] this morning in an unscheduled trading update. Full year guidance has been upped to suggest underlying trading profits will be about 30% higher than previously expected. Government support globally as administrations seek to respond to the COVID-19 pandemic is bolstering performance, although on the basis that this will eventually come to an end, it’s doing little to help the company improve visibility. Separately, the note also includes some interesting clarification on the company’s role in the NHS Test & Trace scheme, aimed at mitigating some of the inaccurate narrative that is being played out in the media right now.
Preliminary full year results are out from JD Wetherspoon [LON:JDW] this morning, with lockdown having sunk the pub co to a pre-tax loss of £34m, following last year’s £100m+ profit. Founder and Chairman Tim Martin doesn’t hold back in his assessment of the government’s handling of the health pandemic to the extent that it makes it difficult to quickly extract the relevant financial information from the note, although a quick search suggests it’s the first time ever that the phrase “complete cobblers” has been used in an RNS. The dividend has – as would be expected across the hospitality sector – been suspended.
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Keeping with the hospitality sector, bar/café operator Loungers [LON:LGRS] has published trading update for the 24 weeks to 4th October this morning. Clearly it has been a difficult period for the industry as a whole, but in the 13 weeks following reopening, the group delivered like for like sales growth in excess of 25% and opened two new properties in the period, too. The company anticipates further disruption to trade in the coming weeks but takes confidence from its continued market outperformance.
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