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, the week commencing 24 October 2016.

Companies announcing results next week

Tuesday

Whitbread (Interim results)

It’s been a tough year so far for Whitbread shareholders with the stock substantially underperforming the market due to concerns about signs of weaker sales growth at Premier Inns. That will be a major focus for investors in these results and it was interesting to hear recently that rival Travelodge is planning a significant expansion of its operations over the next few years. The market will also be keen to hear of the company remains confident of making good progress for the full year, as it stated in June.

Companies also reporting today include: Anglo American (Q3 results), GKN (Q3 trading update) and St. James’s Place (Q3 results)

Wednesday

British American Tobacco (Q3 trading update)

Shares in BAT have proven popular since the EU referendum, rising more than 10% since the vote thanks to its defensive, cash-generating properties. In July the company said it expected to benefit from any weakness in the pound so the market will be interested to see if that has proven correct. The performance of the key global drive brands, especially volumes, will also be in focus and, as a stock which has long been popular with income seekers, any comments on dividend payments will be of interest.

Lloyds Banking Group (Interim management statement)

The news flow surrounding the UK listed banks isn’t improving much and investors are very cautious as to the implications on them of a “hard Brexit”. This will be the first quarter of full post Brexit results for them and management comments will be scrutinised very closely. Investors should expect to see PPI claims still being a drag while assets and the loan portfolio will still be written off. The current state of low interest margins will hurt them more while we should expect to see further branch closures.

The government will not now selloff the remainder of the shares to the retail public.

GlaxoSmithKline (Q3 results)

The shares have done very well recently partly down to the fact that a large portion of its earnings are from overseas which benefit from translations effects. However, operational performance has also been good with new product sales seeing rapid growth which should follow on from last year and the first quarter of this year. Vaccines and Consumer Healthcare are also doing well. A key future driver for the business is the progress from their R&D, investors will be expecting and update here along with the progress on the integration of the Novartis business and cost savings programme.

Companies also reporting today include: Antofagasta (Q3 production report), Bunzl (Q3 results) and Standard Life (Q3 results)

Thursday

BT (Q2 results)

A first quarter trading update in July was better than expected. The company said the mobile network EE was performing well and integration was also progressing well. Good uptake of the TV services has been a strong feature for the consumer division in recent times so those products will be of interest. The shares have underperformed this year due mainly to concerns about the group’s pension deficit and the future of the infrastructure division Openreach so any comments on those will be of interest to investors.

Barclays (Q3 results)

This will be the first full quarter trading since the Brexit vote so management’s comments surrounding this will be scrutinised very close, especially since Barclays is an international bank. For Barclays PPI claims and regulatory fines will continue to be an issue and we could expect further write-downs on assets. However, management have previously said that Brexit won’t impact on the pace of the group’s restructuring. Forward guidance will also be sought after especially since interest rates and fallen further which will no doubt hurt their net interest margin.

Companies also reporting today include: RELX (Q3 results)

Friday

Royal Bank of Scotland (Q3 results)

The news flow on RBS does not seem to improve much and the UK government is likely to write down the value of its stake soon. The interim report in August showed a net loss of roughly £2bn due to fines, we are unlikely to see much of an improvement this quarter as PPI claims and asset write-offs are an ongoing feature. Comments around Brexit, lower interest rates its potential implications will be sought after while the market will want to know more about the progress on the sale of Williams & Glyn which it failed to separate into a standalone bank earlier in the year.

Companies also reporting today include – International Consolidated Airlines (Q3 results) and WPP (Q3 results)

Announcements for the w/c 24 October:

UK Gross domestic product, preliminary estimate: July to September 2016 – Office for National Statistics

The UK economy grew by 0.7% in Q2, compared to the quarter before – a robust rate of growth. The economy slowed in Q3, of that there is unanimous consensus, but by how much? Recent purchasing managers’ indexes are consistent with quarterly growth of 0.2%, but the National Institute of Economics and Social Research (NIESR) recently estimated that growth was 0.4% in the quarter. If the NIESR estimate proves closer to the truth then this will be greeted well by the media, although the markets may fret that the data may mean a further rate cut by the Bank of England is less likely.

28 October, US Gross Domestic Product (Advance) – Bureau of Economic Analysis

The US economy grew at an annualised rate of 1.4% in Q2.  With both recent purchasing managers indexes and consumer confidence indexes rising recently, Q3 probably saw a much stronger performance. The recent purchasing managers’ indexes were in fact consistent with annualised growth of 2.5%, while the consumer confidence index from the Conference Board rose to a nine year high.

Further announcements include:

24 October

  • Quarterly Industrial Trends Survey – Confederation of British Industry

27 October

  • UK index of services, August 2016 – Office for National Statistics
  • Monthly Distributive Trades Survey – Confederation of British Industry

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