Look ahead to FTSE 350: Wizz Air, Workspace And Pennon

Look ahead to FTSE 350: Wizz Air, Workspace And Pennon
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Look ahead to FTSE 350 & other companies reporting from 31 May to 4 June

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Q1 2021 hedge fund letters, conferences and more

  • Wizz Air Holdings PLC (LON:WIZZ) expands routes with expectations bookings will bounce back
  • Hybrid working may help the recovery for shared office provider Workspace Group plc (LON:WKP)
  • Pennon Group plc (LON:PNN) updates us on potential acquisition plans

Wizz Air, Full Year Results, Wednesday 2 June

Susannah Streeter, senior investment and markets analyst

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“High hopes that brighter skies were in sight for the airlines have been clouded by fresh strains of Covid emerging in parts of the world. It has meant that the lights have been stuck on amber for many travel destinations for longer than expected, throwing holiday plans into disarray. Hungarian low-cost carrier Wizz Air flies mostly to Eastern European countries, which have been far from speedy in vaccine roll outs, although lighter travel restrictions compared to the UK do put it in a slightly more resilient position. The annual figures aren’t going to be pretty. For the third quarter, Wizz Air reported a €114.5 million quarterly loss and said it forecast a reduced capacity until March. Turbulence for the Hungary based carrier should be cushioned by its cash balance of €1.2 billion. But it will need a sharp recovery in bookings to reduce its cash burn. Management appear to believe demand will bounce back as it’s added 50 routes to the schedule, including the addition of Abu Dhabi. Expansion into the UAE is a key part of its plan, so customer interest in this new route will be a key metric to watch.”

Workspace, Full Year Results, Thursday 3 June

Susannah Streeter, senior investment and markets analyst

‘’High design co-working space was the bright shiny new concept rippling through the world of work until the pandemic struck.  As people rapidly turned bedrooms and sheds into their new workplaces, the prospects for once on trend companies like London based Workspace looked bleak as business centres emptied while restrictions were imposed.  The company reported a half year loss of £110.4 million, compared to a profit of £99.1million in the same period a year earlier. There has been no big bounce back yet, but the start of a slow return of customers. By the end of March occupancy rates reached 20% of pre-Covid levels and increased to 30% by the end of April, but there is clearly a long way to go. However, the gradual shift out of home working has begun again, and the hybrid approach will offer some long-term opportunities. Younger employees with little prospect of a regular desk in the office, may opt for a seat in a shared space, instead of working from the kitchen table for the foreseeable future. WorkSpace, which offers meeting rooms, with on-site cafes and photographic studios, may also benefit from start-ups, in need a location to meet new clients but fearful of taking on a longer-term lease. However, with vacancy rates high right across the capital, other landlords are likely to be taking a flexible approach to tenants needs, so there is still a challenging road to recovery ahead.’’

Pennon, Full Year Results, Thursday 3 June

William Ryder, Equity Analyst

“Pennon confirmed it was on track to meet full year expectations back in March. Both sales and costs increased in the second half of the year on the back of strong household demand. Cash collection has remained “robust” and bad debts are in line with the expectations laid out when the pandemic began. More recently, Pennon has been given the green light to invest an additional £81m in environmental initiatives as part of the government’s commitment to build back better and greener. More investment increases regulatory asset values, and thus allowable financial returns. After selling Viridor for £3.7bn last year, Pennon is enjoying the flexibility that comes with a strong balance sheet. Management wants to pursue an acquisition in the UK water sector, or failing that make a “substantial” payment to shareholders. The right investment at a sensible price would be welcome, and we were promised an update in next week’s results.”

FTSE 100 & FTSE 250 companies scheduled to report next week

31-May
Bank Holiday
01-Jun
No FTSE 350 reporters
02-Jun
Wizz Air Full Year Results
03-Jun
Chemring Half Year Results
Workspace Full Year Results
Pennon Group* Full Year Results
04-Jun
No FTSE 350 reporters

*Events on which we will be writing research.


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