Companies announcing their 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 20 March 2017.

Companies announcing their results next week

Tuesday

EnQuest (Q4 results)

The company produced good operating numbers for 2016 showing that production was up by 8% to 39,751 boepd despite the maintenance shutdown of the Brent pipeline. With a stabilisation in the oil price in 2016 and field acquisitions the group is expected to report a rise in revenues to around $825m, up 28% on the previous year. With drastic cost cuts, debt restructuring and no further significant asset impairments, EnQuest is expected to report a profit in the region of $150m compared to the near $1bn loss the previous year. Investors will lookout for further signs that the oil market in the North Sea is beginning to turn by focussing on the group’s capital expenditure plans, further oilfield acquisitions and production guidance.

Wednesday

Kingfisher (Q4 results)

These are interesting times for retailers with some signs of a slowdown in sales across the sector in recent months. The last update in November covering the third quarter showed that like-for-like sales were up 1.8% and a continuation of the group’s long-running trend with strength in the UK, Ireland and Poland, offset by ongoing weakness in France. The market will be watching to see if there is any material change in that, along with any update on the plan to unify the group’s systems.

Thursday

Next (Q4 results)

The market will be hoping for better news from clothing retailer Next following its fourth quarter trading update in early January which showed Christmas sales at high street stores below expectations and an 8% lowering of 2018 profit guidance at the midpoint of the £680m-£780m range given. Profits for the current year are expected to be £792m, towards the bottom of the range previously given. A major issue for the group is the increase in import costs due to the weak pound and investors are keen to see if that is going to be passed on to customers or absorbed by the company. Any further news on plans for four special dividends, amounting to 180p, during 2017 will also be of interest.

Friday

Smiths Group (Q2 results)
The group’s shares have performed exceptionally well over a one year period reflecting a steady performance from its growth businesses which have been offsetting the tougher conditions faced by its oil services business, John Crane. Investors will be expecting the divisions that are exposed to government spending such as the Medical and Detection to do better as certain governments look to increase spending after some lean years. Meanwhile its Flex-Tek business which is exposed to the US housing construction market is expected to continue to do well. The Interconnect business could continue to face challenging conditions while investors may still focus on the group’s pension deficit.

Economic Diary

Announcements in the week commencing 20 March 2017:

21 March, UK consumer price inflation: February 2017 – Office for National Statistics (ONS)
In January, UK consumer prices rose by 1.8% year on year, most economists expect today’s data to point to a further increase.  Indeed, with producer prices surging worldwide and the effect of post Brexit vote falls in sterling beginning to show up  in the inflation data, many economists expect inflation to either go close to, or pass, 3% later this year.

23 March, Retail Sales in Great Britain: February 2017 – Office for National Statistics (ONS)
Last month, ONS data revealed a 0.3% fall in retail sales by volume, while the underlying rate, produced by comparing sales over the last three months with the previous three month period, revealed a 0.4% fall, the first fall in the underlying rate since December 2013. The most recent retail sales monitor from the BRC/KPMG pointed to a 0.4% fall in like for like sales in February, compared to the same month a year ago. But however well or badly retail performed in February, bear in mind that with growth in real wages expected to turn negative soon, the outlook for the remainder of the year looks less positive still.

Further announcements include:

21 March

Monthly Industrial Trends Survey – Confederation of British Industry (CBI)

Public Sector Finances, February 2017 – ONS

UK producer price inflation, February 2017 – ONS

UK House Price Index, January 2017 – ONS

23 March

Monthly Distributive Trades Survey – Confederation of British Industry

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