Companies announcing results next week

Graham Spooner, investment research analyst at The Share Centre, gives his thoughts on what to expect from companies announcing their results next week

Companies announcing results next week
Monday

Intertek (Q2 results)

The global testing and quality assurance company has reached new highs, partly helped by its international nature and the devaluation of sterling but also its links to the commodities markets. Both oil and other commodities have bounced off their bottoms while increasing quality and safety standards in various regions around the world leading to an increase in demand for their services. Investors will be interested to see if cost controls have led to margin improvements and the progress in the integration of past acquisitions.

Companies also reporting today include: Keller (Q4 preliminary results) and Vedanta Resources (Q1 production report)

Tuesday

Travis Perkins (Q2 results)

There has been a decline in confidence in the sector and group post Brexit. Analysts are concerned over the uncertainty regarding the outlook. It will probably be too early for the group to assess the outcome for the business, but investors will be looking hard for any early indications.

Shire (Q2 results)

The shares have received a boost as investors switch to sectors deemed to be safe havens in times of stress. Shire’s large overseas exposures will benefit when earnings are translated back into sterling. Investors will be keen on finding out the progress in drug development along with sales of key ADHD related drugs and the integration progress of recent acquisitions including Baxalta, NPS Pharmaceuticals and Dyax. Other drugs are subject to increased generic competitions so investors will pay close attention here as well.

Companies also reporting today includes: Direct Line Insurance (Q2 results), Fresnillo (Q2 results), InterContinental Hotels (Q2 results)

Wednesday

HSBC (Q2 results)

The first quarter update in May reported a further fall in net profit and revenue, on the back of continued market volatility. Investors looking for signs of improvement will have noted the cost cutting, increased market share in some key areas and better than expected income. Followers of the shares will be noting comments on the health of emerging markets especially in Asia.

Income seekers in the banking sector have been hit hard in recent years. HSBC has remained a significant payer and though progress may continue to be slow in the face of many challenges, the shares could be a better option than other banks. They are viewed as being more conservatively managed with a superior balance sheet and deposits.

Next (Q2 trading update)

This major high street clothing retailer will be watched closely by the market given its gloomy outlook comments about 2016 provided in May. Recent data for clothing sales in the UK was also poor so expectations for Next’s figures will not be high. The performance of the directory business will be of interest and any comments on plans to expand the store network given the uncertainty in the wake of Brexit are likely to be a focus for the market.

Rio Tinto (Q2 results)

The latest half year production report was very encouraging as production of key commodites such as iron ore rose by 8% compared to the same period last year. At the same time we have seen commodity prices come off their lows so investors would expect to see some better revenue figures. These companies have also been cutting back in capital expenditure and cutting on costs so this should reflect well on the profits. Investors will be keen to see if they managed to lower the average cost of iron ore any further, already amongst the lowest in the industry.

Companies also reporting today include: Standard Chartered (Q2 results)

Thursday

Hill & Smith (Q2 results)

It’s been a good year so far for Hill & Smith. In March, the company reported full year results ahead of expectations and in May the company said trading in the new financial year had been encouraging up to that point and better than it had forecast. Revenues and profits have benefited from positive movements in both the US dollar and the euro against sterling. The shares have raced to record highs since the EU referendum thanks partly to the high proportion of sales in the US and the weak pound.

Companies also reporting today include: Aviva (Q2 results), London Stock Exchange (Q2 results), Mondi (Q2 results), RSA Insurance (Q2 results), Inmarsat (Q2 results) and Randgold Resources (Q2 results)

Friday

Royal Bank of Scotland (Q2 results)

The group is set to shift its business towards retail and commercial banking. The CEO’s restructuring plans will shrink the group further, through to 2020. The share price has continued to fall over the last fifteen months and took a further hit from the Brexit vote. Investors will be interest to hear about any comments regarding the effect of Brexit on the group’s future restructuring plans and timetable.

William Hill (Interim results)

These are interesting times for bookmaker William Hill. Shortly after surprising the market with the news that the chief executive was leaving the company, the group announced that it had received a joint merger proposal from Rank Group and 888 Holdings. The market will certainly be interested in any news on that front but will also be looking for an update on how online revenues are performing, how soon a new permanent CEO will be in place and whether the overseas operations continue to see good growth. Investors will be looking for full year profit guidance given that the merger talks are at an early stage.

Announcements for the w/c 1 August: 

1, 2 and 3 August, Purchasing Managers Indexes for July – Markit/CIPS

The Flash version of the composite purchasing managers index released on July 22 suggested that the UK economy was contracting at the quarterly rate of 0.4% in July. The PMI tracking manufacturing fell to 49.1, suggesting contraction, but this index has been hovering around the critical 50 no change mark for some time. More worryingly, the PMI for services fell to 47.4, an 88 month low, while the composite PMI fell to 47.7, an 87 month low. Will the more complete, and thus more accurate, readings out this week confirm this worrying impression?

4 August, Monetary Policy Committee Announcement and Minutes and Inflation Report – Bank of England

Last month the Bank of England surprised many by keeping interest rates on hold. But since then, various data, including the PMIs, point towards a slowdown in the UK Economy. The odds of a rate cut today are quite high. As for the Inflation Report, it will be interesting to see how the Bank of England now assesses the economic prospects for the next couple of years, in light of the Brexit vote.

5 August, US Employment Situation, July – BLS

After May’s disappointing figures on non-farm payrolls, June was a bumper month, with an increase in 287,000 non-farm payrolls. If we see many more positive months like June, then more rate hikes from the Fed will surely follow. If the trend continues, then it also illustrates how the US and more troubled UK economy are currently diverging in terms of economic growth.

Further announcements include:

3 August

  • Economic Review, August – Office of National Statistics

5 August

  • Profitability of UK companies, Jan to March – Office of National Statistics

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