The middle point of the shorter week has a smattering of prominent brands delivering results, notably The Gym Group PLC (LON:GYM) and Barratt Developments PLC (LON:BDEV), the first part of a housebuilder duet to be completed by Berkeley Group Holdings PLC (LON:BKG) on Thursday.
On the macro front, the housebuilder’s results may be viewed in line with new UK house price data, while investors will also be looking across the Atlantic for the US ADP employment numbers ahead of Friday’s non-farm payrolls.
Gym Group wipes its brow following lockdown closures
Gym Group PLC (LON:GYM) is not likely to be flexing its best beach-body when half-year results are unveiled on Wednesday, with all 179 of its sites having been shut since mid-March due to the coronavirus lockdown.
Just over four months later, the chain said it was reopening 160 gyms in England on July 25, excluding two gyms in Leicester and 13 in Scotland and Wales due to local lockdowns, plus one in London undergoing refurbishment.
Its finances were bolstered, however, with a £41.3mln equity issue in April and June’s £30mln addition to its borrowing capacity, on top of an existing £70mln corporate overdraft.
The fitness group said as of July 9, it had 692,000 members against 870,000 on March 18, as a rush of cancellations in the first days after March’s closures tailed off thereafter.
Analysts at Barclays said these membership numbers are the “critical factor” in the investment case, adding that a 5% change in membership could result in a fair value fluctuation of 30%, making it “high risk”, with break-even needing a membership at 86% of the February 2020 level.
Barratt results to shine a light on UK housing market
Barratt Developments PLC’s (LON:BDEV) full-year results will be watched closely for any reflections on the state of the housebuilding sector, which has been resilient during the current coronavirus pandemic crisis.
The Nationwide House Price Index reported 1.5% growth in July, while Halifax showed 3.8% growth.
The industry has benefitted from a cut in stamp duty, low interest rates keeping mortgage costs relatively affordable, and pent-up demand following lockdown.
“The outlook is much more uncertain though, especially as restrictions on evictions and the furlough scheme come to an end,” said Will Ryder at Hargreaves Lansdown.
The analyst does not expect Barratt to reintroduce a dividend just yet, with profits and house completion likely to be down, however house prices may have remained resilient during the period.
Significant announcements expected on Wednesday:
Economic data: UK house prices, US ADP unemployment