Ashtead Group (Q3 results)
Ashtead has been performing well recently, mostly thanks to better market conditions in US construction and the weakness of the pound. With the new Trump administration keen to significantly increase federal spending on infrastructure, the company looks well set to benefit further. Interim results in December beat market expectations and investors will be interested to see if the company raises its guidance once again.
Intertek (Q4 results)
The global testing, inspection and quality assurance company’s share price has performed well lately, helped by a recovering commodities market to which it has material exposure to. In the firm’s last update it reported organic sales growth of 7% and there is no reason why this shouldn’t follow through to the full year results. The trend of increasing quality, safety and regulatory standards in developed and developing nations continue to drive the group’s prospects and acquisitions will further boost the reported sales and earnings figures.
Direct Line Insurance (Q4 results)
Interesting times for general insurers following the news from the Ministry of Justice this week which stated that the discount rate for injury claims is to be lowered by more than expected, thereby increasing the amount needed to cover future claims. Direct Line had delayed its results in anticipation of the announcement but has already given an initial reaction, saying 2016 pre-tax profits will be reduced by £215m-£230m. Any further comments about the follow-on consequences of the decision will be of interest, such as whether premiums will have to rise and by how much.
Companies also reporting today include: Informa (Q4 results), Paysafe Group (Q4 results), Worldpay (Q4 results)
Breedon Group (Q4 results)
The company has been positioning itself to benefit from any pick-up in the economy and demand for its products, leading to a number of acquisitions. These acquisitions should help expand its geographical presence in the UK. Management expect a significant and improving contribution to come from the acquisitions which is important as the majority of its customers will be local to the site. Any comments on the housing market, where much of the growth has come from will be worth noting.
G4S (Q4 results)
The shares have staged an impressive recovery over the last 6 months on the back of hopes that the strategic review is starting to restore faith in the group. The last trading update saw a rise in revenue and earnings growth, along with an improvement in cash flow. Followers of the company will be looking at the debt situation, cost cutting and the group’s views on Brexit and its future outlook.
Companies also reporting today include: Hill & Smith (Q4 results) Legal & General (Q4 results)
Aviva (Q4 results)
At the last interim update we saw the company making good progress with its restructuring plans and the Friends Life business was being integrated well. The underlying performance of the group has also been encouraging and it is expected to report good growth in operating profits and solvency ratios. However the uncertain political environment made business for firms such as Aviva more challenging. Investors will therefore be interested in the outlook from management given the threat to passporting rights due to Brexit and the impact from the recent change to personal injury damage awards.
Lookers (Q4 results)
Shares in car dealership group Lookers have performed poorly over the past year with some people fearing that rising inflation, sluggish wage growth and economic uncertainty might hit big-ticket retail items such as cars. However, recent trading at the company has been encouraging. The last update in November showed that third quarter gross profits from new and used car sales continued to rise, as they did in the aftersales business too. The group said it had still not noticed any change in consumer behaviour since the EU referendum and remained confident of achieving growth in revenues and profits for the full year. Data in January recorded that new car registrations reached a 12-year high.
Wm Morrison Supermarkets (Q4 results)
Can the improvement in performance continue and for how long? These are questions that investors will be asking. The firm’s trading update in January reported its best Christmas trading period for seven years. This encouraging performance was achieved by the group improving products on offer, continuing to be competitive and a better customer experience. The recently introduced automated ordering system has also been viewed as a success. The shares outperformed in 2016, as a result of the ongoing recovery in sales and this has pushed the rating higher than its rivals. Competition concerns are not going to go away and the management initiatives will take time to execute, however the company has built up some momentum and this trend could have further to run.
Companies also reporting today include: Old Mutual (Q4 results), Restaurant Group (Q4 results), DS Smith (Q3 trading update)
Announcements for the w/c 6 March:
7 March, Residential Market Survey, February – Royal Institution of Chartered Surveyors (RICS)
There have been signs of a slowdown in the growth of UK house prices in recent weeks, with the latest Halifax Index, for example, pointing to falling house prices in January. The closely watched index from RICS has fallen slightly from November’s post Brexit high of 29. Did the index continue to fall in February?
10 March, US Employment Situation, February – Bureau of Labour Statistics (BLS)
US non-farm payrolls rose by 227,000 in January, and unemployment was little changed at 4.8%. But attention is now focused on the number of potential US workers who do not show up in the jobs stats. Last month, the BLS said that there were 1.8 million people marginally attached to the US labour market, but President Trump claims that 94 million Americans are out of the labour force, although a large proportion of this number includes people in full time education, over 65 or disabled.
10 March, UK index of production: January 2017 – Office for National Statistics and UK trade (ONS)
Recent surveys, such as PMIs, have pointed to strong growth in manufacturing and exports, but will the official data back this up? In December 2016 production increased by 1.1%, with manufacturing providing the only contribution to the increase, while the trade deficit narrowed in December by £0.3 billion to £3.3 billion, this was largely due to an increase in exports of goods to non-EU countries.
Further announcements include
- EU GDP and main aggregates, Q4 2016 – Eurostat
- Governing Council of the European Central Bank (ECB): monetary policy meeting in Frankfurt – ECB
- Construction output in Great Britain, January 2017 and new orders October to December 2016 – ONS
- Bank of England/TNS Inflation Attitudes Survey – Bank of England
Please remember, no news or research item is a recommendation or advice to buy. Every Investor is not responsible for accuracy and may not share the author’s views. If you are unsure of the suitability of any investment for your circumstances please contact an adviser. All investments can fall as well as rise in value so you could get back less than you invest.