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 17 April 2017.

Companies announcing their results next week

Wednesday

Associated British Foods (Interim results)

In late February the group provided a fairly detailed trading update, in which it outlined its expectations of an increase in full year profits to occur in the first half of the year, any further update on that will be of interest. Therefore, the market will not be expecting any significant changes in terms of first half numbers. Primark’s sales rose 11% on a constant currency basis overall but investors will be focused especially on guidance for the UK stores in the second half, as like-for-like sales were disappointingly flat in the first half. Profits at the sugar division are expected to accelerate in 2017.

Burberry (Q4 results)

After a tough few years the group reported a more encouraging set of Q3 numbers and the market expects some of this to flow through to the Q4 results too. It seems as though confidence is returning amongst Chinese and Hong Kong based consumers and the UK retail business expects to do well on the back of travellers taking advantage of the weak pound. The online platform should continue to prosper, and further comments on the restructuring of the fragrance business will be expected. Meanwhile, investors will hope to see a payout ratio in the region of 40-50%.

Relx (Q4 trading update)

The majority of the firm’s restructuring programme is now over. These changes have moved the group away from its core trade journals base into one providing digital professional information services. There has been solid like for like growth across all of its divisions and an improvement in margins. This has led to a strong share price performance over the last 2 years, which is currently at an all-time high. Investors will be hoping for more of the same.

Companies reporting today include: Rentokil Initial (Q1 trading update)

Thursday

Unilever (Q1 trading update)

It’s been an interesting start to the year for Unilever with Kraft Heinz’s failed $143bn takeover bid in February. This was followed by a wide-ranging business review which has resulted in a number of significant changes and speculation about the future of CEO Paul Polman. While the market will be looking for more detail on how the different divisions are performing the group did say last week that trading so far this year remains on track to deliver sales growth of between 3% and 5%. Any further detail on dividend payments and potential changes to the group’s dual-headed legal structure will also be of interest.

Companies reporting today include: Sky (Q3 results)

Friday

Reckitt Benckiser (Q1 results)

The company produces a number of well-known brands and products that are generally considered as everyday necessities in developed markets. Therefore, sales of these products will not vary hugely through the economic cycle which results in a relatively steady earnings and cash flow stream. Investors will be hoping for a further update on its recently announced strategic review of its food business, along with emerging market performance and the health and hygiene business. After a poor finish to the year the share price has started once again to move in the right direction and the market, despite thinking the latest acquisition of Mead Johnson was overpriced, was generally positive towards it.

Economic Diary

Announcements w/c 17 April 2017

19 April, EU inflation, March – Eurostat

Although inflation in the euro area rose to 2.0% in February, recent data on German inflation revealed a sharp fall in March, dropping from 2.2% to 1.5%. Did the experience in Germany translate into a wider experience across the euro area? If so, given that inflation in China has fallen back recently, does it suggest that the indications of creeping inflation seen earlier in the year have reversed?

21 April, Retail Sales in Great Britain: March 2017 – Office for National Statistics
Although inflation in the euro area rose to 2.0% in February, recent data on German inflation revealed a sharp fall in March, dropping from 2.2% to 1.5%. Did the experience in Germany translate into a wider experience across the euro area? If so, given that inflation in China has fallen back recently, does it suggest that the indications of creeping inflation seen earlier in the year have reversed?

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