Companies reporting today include: Hammerson (Q4 results)
BHP Billiton (Q2 results)
The latest production figures showed the company making good operational progress across a range of commodities with rising production levels and better pricing characteristics. This is expected to be echoed through to improved revenues while the drastic cost cuts should result in improved earnings in comparison to last year. However, there have been issues regarding industrial disputes at some of the world’s largest copper mines in Chile, one of which is run by BHP. Investors will anticipate comment on how this will affect the group’s earnings going forward and on the negotiations progress. There was positive news from Rio Tinto in terms of the dividend and cash payouts and we’ll be wondering of the possibilities of the same from BHP (unlikely though given this will just be a quarterly update, not the full year).
HSBC (Q4 results)
With a significant amount of overseas earnings the shares have outperformed others in the sector post Brexit and are now at a three year high. Investors will be hoping for further signs of an improvement in performance, along with an update on key regions such as Asia. Other areas to concentrate on will be its efforts to reduce costs, organic growth, its dividend policy and its move away from high street branches as around 90% of its interactions with customers are now digital.
InterContinental Hotels (Q4 results)
Shares in the international hotel group have performed well over the past year. The company’s last trading update in October, covering the third quarter, reported a 1.8% rise in revenue per room although a strengthening in the dollar reduced that figure to flat at actual exchange rates. IHG expressed confidence in the outlook for the rest of the year and CEO Richard Solomons reiterated that at the World Economic Forum meeting in Davos in January. The performance of the boutique hotels and operations in Asia will be the main points of interest for many investors, as will the impact of currency fluctuations on this very international business.
Companies reporting today include: Anglo American (Q4 results)
Barratt Developments (Q2 results)
The news out of the housebuilding sector has continued to be positive despite Brexit fears. Consumer confidence seems to be resilient as well as supported by economic growth and the easy availability of mortgage credit. Investors should expect to see double digit increases in sales and forward bookings as enquiry levels remain high, completions go up and the average house prices continue to rise. However, the London market has been notably weaker and investors will look out for caution expressed by management in the statement or through the numbers shown on land bank and plot acquisitions.
Lloyds Banking (Q4 results)
Like most other banks the group has been cutting jobs and branches in order to target £1.4 billion of savings, invest in digital services and products and target a 13.5-15% return on equity. The company are now close to finishing the main restructuring, although there will be further branch closures. Investors will be hoping for no more PPI provisions and concentrating more on the future with regard to dividend payments, views on the UK post Brexit, its cost base target and the housing market.
BAE Systems (Q4 results)
Guidance given by management previously was for full year 2016 underlying EPS growth of 5-10% and we don’t see any reason for that to change. There will be a positive currency impact and we are likely to see continued momentum in the good news from the Middle East. The spending outlook from the US appeared to be rosier even before the election result and Trump’s win is expected to further boost spending in the defence sector which should result in management having a positive outlook for 2017. Investors will lookout for the size of the order book which last stood at £36bn, and to gage whether the company has done anything to reduce the £6bn pension deficit and the size of its debt load.
British American Tobacco (Final results)
In October the company provided an upbeat third quarter trading update which showed revenue and cigarette volumes rising. That news was rather overshadowed by the announcement that the group was proposing to buy the 57.8% stake in Reynolds American which it did not already own. The market will be interested in any further comments on future strategy as well as any information on whether the group has benefited from the weak pound. Comments on future dividends will also be of great interest to investors.
Centrica (Q4 results)
The group does not always get the best of press coverage and regularly comes under pressure from politicians, consumers and watchdogs, as a result of its charges. The news on 10 February that its price freeze has been extended to August could be well timed in light of other recent tariff increases. In December the firm provided much needed better news, with an improvement in customer retention and that it expected to exceed financial targets for the year. Furthermore, operating cash flow guidance was raised to be between £2.4bn and £2.6bn. This is another company involved in a new strategic plan and the market will be keen to hear an update on its progress.
Companies reporting today include: Intu Properties (Q4 results), Mondi (Q4 results), RELX (Q4 results), RSA Insurance (Q4 results), Barclays (Q4 results), Glencore (Q4 results)
William Hill (Q4 results)
The market will be looking for better news from the bookmaking group, especially in terms of customer-friendly results which have made a major dent on profits over recent months. Full year profits are expected to come in around £260m and investors will also be looking for an update on the level of mobile wagers and trading in Australia and the US. Any comments on the impact of the government’s expected clampdown on maximum bets on fixed odds betting terminals in its branches will also be of interest.
Standard Chartered (Q4 results)
The share price has staged a significant recovery over the past year and a number of analysts are more positive about the group, with hopes that the banking situation is stabilizing and that the momentum will continue in 2017. This is a bank that is focussed on emerging markets and has had a management shake-up and strategic review involving cutting costs and selling off riskier parts of the business. Comments on its outlook for Asia, especially China, Hong Kong and Singapore will be worth noting.
Companies also reporting today include: Pearson (Q4 results), International Consolidated Airlines (Q4 results), Royal Bank of Scotland Group (Q4 results), Standard Life (Q4 results)
Announcements w/c 20 February 2017:
22 February, UK GDP, second estimate: October to December 2016 – Office for National Statistics (ONS)
The ONS recorded a quarterly growth rate of 0.6% in Q4, when it last released its preliminary estimate last month. This was at the higher end of expectations, so it is unlikely to be revised upwards. But with purchasing managers indexes related to the period looking promising, if the data is revised downwards, it shouldn’t be by much. Today’s data will also tell us more about the drivers of growth in the quarter, and whether the UK is still possibly too reliant on consumer spending.
22 February, Federal Open Market Committee meeting of January 31 – Federal Reserve System (FED)
Janet Yellen, the FED chair, has been dropping very subtle hints that President Trump’s economic plans are causing some uncertainty. But what do the men and women who make up the FED’s rate setting committee, the FOMC, think? Do they believe that Trumponomics may warrant more interest rates hikes than had previously been forecast? Today’s minutes will throw some light on this question.
Further announcements include:
- UK Public finances, January – Office for National Statistics
- UK index of services: December 2016 – Office for National Statistics
- Monthly economic commentary: February 2017 – Office for National Statistics
- EU Inflation (HICP), January – Eurostat
- Quarterly Distributive Trades Survey – Confederation of British Industry