Associated British Foods (Q2 trading update)
The market will be focused on the performance of value clothing chain Primark given recent updates indicating that sales growth has slowed sharply and sourcing costs have risen. Investors will be interested to hear if the group still sees the weak pound leading to lower profit margins this year. There should be better news from the sugar business as well as an update on full year profit guidance.
Keller (Q4 results)
Keller reported some disappointing numbers at interim stages due to project delays and tough market conditions in its Asia Pacific operations. The company issued a profit warning and as a result, group earnings were guided down by roughly 15%. We now look to see whether things have picked up in those regions. However, Keller was still performing well in its key European and US markets where a boost to infrastructure spending should see a more positive 2017. The size of the order book will therefore be monitored closely.
Fresnillo (Q4 results)
The full year production results were on the whole encouraging with silver production up by 7.1% during 2016, mostly as a result of higher grades of ore and the start-up of production at new projects. Gold sales were also up but were driven mainly by reduced inventories. Group revenues should get a boost as average selling prices of both silver and gold should have risen compared to the previous year. Investors will expect progress on newer mines which must raise production as older mines are maturing and experiencing lower grades of ore.
GKN (Full year results)
The market is expecting to see overall growth in these figures, despite comments from GKN previously about a slowdown in growth in some of its markets. Management sales in the first nine months were up 21% with a boost from favourable currency translation, but the trading margin fell back. The first half saw growth in the aerospace and automotive divisions offset partly by a drop in sales at the agricultural equipment business. Given expectations of a big rise in US defence spending, and calls for other Nato members to increase theirs, any comment on the military aircraft component business will also be interesting.
Persimmon (Q4 results)
The company has already provided some of the core numbers relating to 2016 in their latest update where revenues rose to £3.14bn led by a rise in completions and average selling prices. Focus in the full year results will be on operational efficiency and how rising costs of labour and materials has impacted the earnings. Investors will also focus on the forward sales and management prospects for the year given the uncertainties in consumer confidence due to Brexit. Commentary on whether housebuilders are willing to develop their land band quicker will also be interesting to see.
Companies also reporting today include: Babcock International (Q3 trading update), Croda International (Q4 results), OPG Power Ventures (Q3 results), Provident Financial (Q4 results), St James’s Place (Q4 results) and Taylor Wimpey (Q4 results)
ITV (Q4 results)
Results have demonstrated that the business is continuing to move in the right direction. Analysts are encouraged by the improvement at its Studios business, with a significant increase in new commissions and its digital offering. There have even been suggestions that the group could be a bid target. However, there has been pressure on advertising revenue since Brexit and investors will be hoping for signs of an improvement in this area.
Companies also reporting today include: Admiral (Q4 results), Costain (Q4 results), James Fisher & Sons (Q4 results) and CRH (Q4 results)
Merlin Entertainments (Full year results)
There should be no surprises in terms of full year profits as the company said in November that it expected them to be in line with previous guidance. The market will be looking for an up to date commentary on the performance of the Legoland parks, especially in Florida where they have been a little soft of late. Other companies in the leisure sector have reported an uptick in tourist numbers in London in recent times due to the weak pound, so it will be interesting to hear if Merlin has itself benefited from that. We are also likely to hear more on plans for future international expansion ranging from North America to China, Japan, Dubai and South Korea.
Melrose Industries (Q4 results)
Investors will be keen to hear an update on its latest acquisition Nortek, which has geared the group to the US housing market. Melrose see potential for improving performance by refocusing its product range, overhauling the supply chain, debt structure and back office, leading to improved margins. Management have an excellent track record on improving businesses that it has acquired.
Companies also reporting today include: Capita (Q4 results) and Schroders (Q4 results)
WPP (Q4 results)
WPP is the bellwether of the advertising industry and as such is widely regarded as a global economic barometer. It offers a wide range of exposure to both digital media and global markets. New technology should help open up avenues for growth over the longer term, this is reflected in new media related business being WPP’s fastest growing area. With the shares close to an all-time high investors will be expecting another solid trading update, concentrating on emerging markets, digital media and the groups outlook for the US and Europe.
Companies also reporting today include: London Stock Exchange (Q4 results)
Announcements w/c 27 February 2017:
1, 2 and 3 March, purchasing managers indexes for UK manufacturing, construction and services – Markit/Chartered Institute of Purchasing and Supply.
Last month the manufacturing PMI stood at 54.9, down very slightly on the reading from the month before, but a sub-index tracking output rose to a 32-month high, the PMI for construction fell to 52.2 from 54.2 and the Business Activity Index tracking services fell to 54.5, the lowest level since September. However, the three indexes collectively pointed to GDP growth of around 0.5%, quarter on quarter. The indexes were consistent with some-rebalancing towards manufacturing, but also pointed to growing cost pressures. Was this pattern repeated in February?
2 March, EU flash inflation, February – Eurostat.
The flash EU inflation data is released 10 to 14 days or so before inflation data covering the US and UK, so it gives a good early indication. Last month, inflation in the EU area rose to 1.8%, from 1.1% in December. The euro area data turned out to be typical. With cost pressures growing, did the region see another big jump in inflation in February, if so, the UK and US will probably follow.