Airlines, tobacco and telecoms among key sectors in coming week, UK inflation

The coming week is scheduled to see updates and results from a plethora of blue-chip brands, with Ryanair and easyJet representing the airline sector while tobacco group , telecoms giant Vodafone and Royal Mail among the notable reporters.

However, other major brands are also in the pipeline including B&Q owner Kingfisher, publisher group Future and utility firm National Gird, while in the macro diary UK inflation data will be the headline news alongside new unemployment figures.

Airlines taxi to the results runway

Budget airlines () and easyJet PLC () respectively report full-year results on Monday and half-year numbers on Thursday, with tough reading expected for investors in both due to the near-total shutdown of international travel in the pandemic, meaning cash burn will be one of the key issues for both companies.

Easyjet’s shares, after falling from around 1500p to below 500p last year, have rebounded above 1000p, while Ryanair’s at above €16 are higher than they were in early 2020 as investors anticipate it grabbing more market share in the fallout from the pandemic.

Ryanair Holdings PLC () also had a nervous time recently when it was revealed that Boeing’s 737 MAX aeroplanes were grounded again after technical problems were found, less than six months after being cleared to return to the skies following two fatal crashes which forced regulators to suspend their operation in March 2019. Ryanair is a major customer of Boeing and has dozens of these fuel-efficient planes on order.

While this latest issue was cleared up fairly quickly, Ryanair’s problems are far from over, with restrictions on foreign holidays still in place for most countries in Europe, with the UK’s ‘green list’ for quarantine free travel only including Portugal on the continent and unlikely summer beach vacation locations such as , Gibraltar and the Faroe Islands.

Ryanair said last month that it expects to report a full-year loss of €800-850mln, having carried 27.5mln passengers compared to 149mln, though it had more than €3.1bn of cash as of the end of March and 84% of the fleet unencumbered.

For the new year, boss Michael O’Leary was eyeing passenger volumes to be at the lower end of the 80-120mln range.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “Ryanair was banking on a vaccine led recovery to save the summer season but the limited number of green light destinations on the holiday list so far will be highly disappointing. Although Ryanair is used to belt-tightening, it is unlikely it will be able to withstand a further squeeze on revenues, if bookings don’t resume briskly over coming months the company may be forced to return to the market to drum up more financial support.”

As for easyJet PLC () on Thursday, these interims follow a statement last month where it guided to a pre-tax loss of £690-730mln and said it had liquidity of roughly £2.9bn.

Broker Peel Hunt said it believes this amount of cash “should be more than sufficient, as long as travel restrictions are eased over the course of the spring and summer and are not reintroduced over the next couple of years at least”.

The FTSE 250-listed flier’s holidays business is “a key differentiator” to other airlines, the analysts said, but the UK’s progress on traffic light tiering, vaccine passports and PCR testing has been “disappointingly slow”.

“Whilst progress on costs has been encouraging, this is unlikely to be enough to offset the challenges that further delays will bring.”

Vodafone dials in with results

Vodafone PLC () is not the sexy stock it was when it was sitting on a pile of Verizon Wireless shares but interest in the mobile phone networks operator has perked up recently.

Thursday’s fourth-quarter (Q4) and full-year (FY) results should give some…