Companies announcing 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 8 May 2017.

Companies announcing results next week

Monday

Centrica (Q1 trading update)

The share price has recently come under pressure as a result of the Conservative Party’s commitment to focus on energy providers. Investors will be looking at customer retention, costs and whether it remains on track regarding its financial targets and strategic review.

Tuesday

William Hill (Q1 trading update)

With a permanent CEO now appointed and better signs at the online channel sentiment towards the stock has improved. Investors will be interested in how recent sports results have affected the group and how the Australian business is performing. Any comments on how the government reviews gaming machine stake levels may impact the company would also be of interest as an announcement on that is due soon.

Wednesday

Barratt Developments (Q3 trading update)

Shares in Barratt Developments, like most other housebuilders, have staged a good recovery since the referendum outcome on the back of resilient consumer sentiment. The shortage of housing, attractive mortgage rates, good employment levels and government policies should see this trend continue into the latest trading update. This will be reflected in the group’s forward order book (expect it to be at record levels) and the group’s land bank and plot acquisition strategy. However, the shortage of skilled labour and rising material costs will begin to pose problems for the sector.

Compass Group (Q2 results)

The defensive nature of catering group Compass’ business has made it attractive to investors in uncertain economic times. The market will be watching to see if the North American business continues to perform well. Commodities-related markets have proven difficult for Compass in recent times so it will be interesting to see if there’s been any improvement in the second quarter.

ITV (Q1 trading update)

The news that the CEO is stepping down may continue to overshadow this trading update. There have long been rumours that the group could be a bid target and some may view the news as a sign that this is more likely. Elsewhere, the performance of the production unit and advertising revenue will be worth noting.

Thursday

BT  (Q4 results)

It has been a difficult year for BT so far, as can be clearly seen from the underperforming shares, so investors will be looking for some good news from the telecoms giant in these results. Third quarter figures in January were slightly better than expected with the consumer division continuing to perform well. The market will be focused on future revenue guidance, especially for the public sector business, as well as any comments on dividends.

Companies also reporting today Hill & Smith (Q1 trading update), Mondi (Q1 trading update), Coca Cola (Q1 trading update)

Friday

Provident Financial (Q1 interim management statement)

The group are regarded as the leading non-standard lender in the UK. Investors will be hoping for an update on the outlook, with Brexit looming large and as default rates have remained stable. So far demand for the groups offerings shows no signs of slowing and the cash generation is impressive, leading to a 4.5% prospective dividend yield.

Economic Diary

Announcements w/c 8 May 2017:

11 May, Inflation Report, Monetary Policy Summary and minutes of the Monetary Policy Committee meeting ending on 10 May 2017 – Bank of England   Three months ago, the Bank of England revised its projections for UK growth in 2017 upwards to 2%. It also forecasts that inflation would peak towards the end of this year/beginning of next, a little shy of 3%.   But UK growth did in fact slow markedly in Q1, and inflation has been surprising on the upside, will the bank lower forecasts for GDP and increase forecasts for inflation?  The MPC is however, unlikely to announce any major change in monetary policy today.

12 May, US Consumer prices, April – Bureau of Labor Statistics

US inflation fell last month, dropping from 2.7% to 2.4%.  Prices fell by 0.3%, month on month, while core inflation – with food and energy stripped out – also fell to just 2.0%.  Some speculated that the surprisingly low level of US inflation in the month may persuade officials at the Fed to stay their hand, and not increase rates in June, as widely expected. Conversely, it seems likely that the main factor behind the weak inflation figures was seasonal, namely weather related factors.  If this is so, then April should have seen a reasonably sharp jump in US inflation.

Further announcements include:

11 May

UK index of production, March 2017 – Office for National Statistics

UK trade, March – Office for National Statistics

Construction output in Great Britain: March 2017 and new orders January to March 2017 – Office for National Statistics

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