UK Supreme Court to rule on parliament prorogation, TUI provides travel update

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Tuesday’s big news is likely to be the delayed Supreme Court judgment on the prorogation of parliament, while investors will be interested to hear TUI AG‘s (LON:TUI) scheduled trading statement a day after the collapse of rival Thomas Cook.


Ruling on whether the advice given to the Queen by Boris Johnson regarding the prorogation of parliament was lawful, the Supreme Court judgment has been pencilled in for at 10.30am on Tuesday, having already been pushed back a couple of times from last week.


The urgency connected with the Court’s decision has abated after parliament rushed through legislation that would stop the government allowing a no deal to happen on October 31 without the consent of MPs.


“That said, the impact to Johnson’s reputation could be just as stinging and calls for him to resign are likely to ring louder if the Judges rule against him,” currency analysts at Rabobank said.


“The PM is already in murky waters after an accusation in the weekend press of a possible abuse of office while Johnson was London Mayor. If the clouds over the PM do thicken further […] GBP will be faced with another political headwind.”


Meanwhile, Johnson, who has history of being out of the country when something big is brewing, is in New York for the annual General Assembly of the UN, which should also generate some Brexit speculation, whispers and stories from the podiums and sidelines.


“I don’t wish to elevate excessively the belief there will be a New York breakthrough,” the Prime Minister urged, however.


TUI flying higher


TUI shares already enjoyed a fillip as the UK tour operator’s and on Tuesday the company is scheduled to post an update for its soon-to-conclude financial year.


Last month the Anglo-Germany company flagged a 7% increase in summer bookings with positive pricing in August in both UK and Europe, but underlying earnings almost halved in the third quarter.


With early signs for the winter schedules in the UK showing evidence of some customer hesitancy, analysts at UBS felt it was “unclear” to us how much of the strong August bookings were driven by a market recovery versus an easy comparative last year and how much was due to market share gains from Thomas Cook.


That note from UBS was written last week, before the liquidation of Thomas Cook.


Card message


Another industry enduring no little turbulence is retail, from where Card Factory PLC (LON:CARD) is due to send a message alongside on its half-year results.


The greetings card chain said last month that first-half revenues were up 5.5%, with sales rising by 1.5% on a like-for-like basis, but that reflected a strong first quarter containing Valentine’s and Mother’s Day.


Broker Peel Hunt does not expect current trading to be especially exciting either, with cost pressures dragging EBITDA slightly below last year’s GBP30mln.


“We will be very interested to hear management’s thoughts on returning to growth and the trials with the likes of Aldi and Matalan,” analysts said.


Checking in with Hotel Chocolat


Hotel Chocolat PLC (LON:HOTC) is having a sweeter time on the high street and is likely to report on what has most likely been another year of strong sales growth.


The chocolate maker, which owns its own retail outlets and a 140-acre cocoa plantation in Saint Lucia, has already revealed that revenue for the year to the end of June was up 14% to GBP132mln.


Profit before tax, according to the company, should be in line with expectations, which suggests a figure of GBP13.9mln.


“Online sales have improved but there is further to go in terms of the potency of the offer,” suggested analysts at Peel Hunt.


“Any word on current trading will, of course, be well scrutinised but a major shift in trading form is unlikely,” the broker added.


Shares in Hotel Choc are up 40% so far this year, but are still down from their peak in summer last year.


New products eyed as AG Barr looks to regain fizz


Over at Irn Bru maker AG Barr PLC (LON:BAG), shares have lost a fair amount of fizz since a profit warning in July, with the shares currently down 40% from an all-time high of 975p in June.


The group is estimating that revenues for its first half will be around 10% lower when it reports its results for the period on Tuesday, while full-year profits are expected to fall by around a fifth.


With the numbers already predicted to be gloomy, investors will be looking for what the new challenges mean for the company’s margins and volumes, as well as what management plans to do about them.


There may also be some more detail on upcoming launches of new products, with three new Rockstar energy drink products and a revamped recipe for Rubicon juice drinks currently in the pipeline for next year.


Tuesday September 24:


Finals: AA PLC (LON:AA.), 1pm PLC (LON:OPM), Blancco Technology Group PLC (LON:BLTG), Close Brothers Group PLC (LON:CBG), DX Group PLC (LON:DX), Hotel Chocolat Group PLC (LON:HOTC), Innovaderma PLC, (LON:IDP), Town Centre Securities PLC (LON:TOWN)


Interims: Alliance Pharma PLC (LON:APH), Animalcare Group PLC (LON:ANCR), Card Factory PLC (LON:CARD), Digitalbox PLC (LON:DBOX), DP Poland PLC (LON:DPP), Everyman Media PLC (LON:EMAN), Flowertech Fluidpower PLC (LON:FLO), Minds and Machines Group Ltd (LON:MMX), Moss Bros Group (LON:MOSB), Pennant International PLC (LON:PEN), Quixant PLC (LON:QXT), S&U PLC (LON:SUS), Ten Entertainment Group PLC (LON:TEG), Tremor International Ltd (LON:TRMR)


AGMs: Kibo Energy PLC (LON:KIBO)


Economic data: UK public sector borrowing, CBI industrial trends, US consumer confidence

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