Of all the results announcements in the City this week, the one you really don’t want to be involved with will be hosted by the leisure group Merlin Entertainments.
That’s not because the numbers might be disappointing (and they probably will be) but because the company is the owner of Alton Towers, the theme park where last month’s horrific rollercoaster accident left four people seriously injured.
To be scrupulously fair to the company, it did immediately take “full responsibility to those who had been injured in the accident” and confirmed it would “ensure that compensation will be provided to them” – but to City ears that just adds to the sense that spreadsheets now need to be tweaked.
In a research note, Barclays says: “We estimate that the incident on the Smiler rollercoaster will have negatively impacted performance from 1) park closure for five days; 2) slower volumes following reopening and more promotional activity; 3) some impact at Chessington and Thorpe Park due to other ride closures”, while UBS foresees the potential for the shares to fall (and then for someone else to cash in). “If the valuation becomes more attractive we could potentially become more positive on the shares,” the Swiss bank says, before considering “using any weakness as a buying opportunity”.
Pharma’s legal headaches
In the world of pharmaceuticals, it’s all about the pipeline – and this week gives an excellent chance to ask how efficiently it’s working, with results from the UK’s two big drugs groups.
In one sense, the answer will be “as brilliantly as ever”, as the top minds in both GSK and AstraZeneca retain a trail of blockbuster legal battles, requiring millions of pounds to cure.
Just under a year ago GSK paid a £301m fine to the Chinese government after it got caught (in its words) offering “money or property to non-government personnel in order to obtain improper commercial gains”. Undeterred, that still leaves five full pages of its annual report to deal with other legal matters, including the ongoing investigation by the UK’s Serious Fraud Office, plus another being conducted by America’s department of justice, which is examining the whole industry under its Foreign Corrupt Practices Act.
That one also affects AstraZeneca, whose own investigation into what its people have been up to has unearthed “indications of inappropriate conduct in certain countries”. Still, expect the City to ignore all that this week, and focus on the pipeline for products.
Greggs on a roll
The most important City news of last week was, of course, provided by Jake Gyllenhaal, the film actor who made his name in some critically acclaimed cowboy movie (City Slickers?). In an interview with Magic FM, he mused: “I eat Greggs, Greggs baguettes – that’s what I eat when I’m in London.”
Obviously, the latest edition of Hardens’ Best London Restaurants is being pulped as we write, while you’ll be astonished to discover that the bakery chain is reporting interim results this week, which will presumably involve a presentation on the sales of steak bakes from Leonardo DiCaprio, before Dame Judy Dench breaks off from munching a jam doughnut to dissect the group’s earnings per share.
Still, despite Greggs’s diligent PR efforts since the Gyllenhaal plug, one wonders if there might be some sort of Hollywood in-joke here? Strangely, the actor has form when it comes to sandwiches, what with snaps of him seemingly laughing at his butties going viral on the internet, plus a bizarre appearance on The Tonight Show with Jimmy Fallon, when he performed a song called Gonna Eat That Talkin’ Sandwich and told his host: “My favourite sandwich is a Primanti Brothers’ sandwich, it has the french fries in the sandwich and coleslaw.”
