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 15 May 2017.

Companies announcing results next week
Tuesday

easyJet (Q2 results)

The shares have rebounded strongly in the last three months thanks partly to some strong monthly passenger statistics which have reassured investors worried about the impact of Brexit. The last update from the budget airline in January gave a rather mixed picture. On the one hand it showed that passenger numbers and revenue rose but it also revealed that the weak pound was impacting profits. Investors will also be watching out for guidance on fuel costs given the fall in the oil price.

Vodafone (Q4 results)

Consensus expectations are that group revenues will fall by roughly 5% in Euro terms but UK investors will still see the positives due to sterling’s plunge. The decline in revenues will be blamed on tough conditions in Europe even though recent trading updates have been a little more positive on the region. There will also be a large impact from the intensification of competition in India and there will therefore be a great deal of interest regarding the merger of operations with Idea. The group will still expect to see organic EBITDA growth in the region of 3-6% as management have guided. We should still expect to see good growth rates for data services and emerging markets.

Companies also reporting today include: NewRiver REIT (Q4 results)  

Wednesday

SSE (Q4 results)

The share price has come under pressure recently from the Conservative Party manifesto proposed cap on energy prices.The majority of investors in the company focus on the yield, which is currently around 6.2%, growth prospects may not be as attractive and the shares have underperformed over the last twelve months. The group are aiming for dividend increases to be at least equivalent to inflation. Any comments on the proposed caps will be worth noting, along with any further comment on its dividend cover targeted range.

Wincanton (Full year results)

The growth in online retailing activity has provided logistics groups such as Wincanton with a good boost to its growth. While first half revenues fell slightly, partly due to exiting some contracts, profits rose 36% and in March the company said it expected its full year performance to be in line with expectations. New contracts have been secured with Britvic and Wilko this year and the market expects full year profits to rise by 12% with dividends also forecast to go up by more than inflation.

Companies also reporting today include: British Land (Q4 results)

Thursday

Royal Mail (Q4 results) 

The group has come under pressure from the trade union over proposals to close its current pension scheme. Royal Mail will be continuing its’ restructuring, as a result of the decline in the letters part of the business and the boom in parcels, on the back of internet shopping. In recent years management have been improving the performance and cutting costs. There remains a divergence of opinion amongst analysts as to the prospects for the group. Income seekers may be attracted, with the shares close to a 12-month low, a prospective yield of around 5.6% and a P/E of 10.5. For the time being the market appears to be focussed on the growing threat of competition and falling letter volumes.

Other companies reporting include: Hargreaves Lansdown (interim management statement), 3i (Q4 results), Land Securities (Q4 results), Marston’s (Q2 results), National Grid (Q4 results) and Burberry (Q4 preliminary results)

Friday

Hikma Pharmaceuticals (interim management statement)

The group’s earnings from Egypt will still be impacted by the plunge in the Egyptian pound in late 2016 and investors will also look to see if the issues with the acquisition of West Ward Columbus are now in the past. In the last update, management were upbeat on the prospects of regulatory approval on a number of R&D pipeline drugs. Overall, the group should continue to see improving sales in the Middle East while the shortage of certain drugs in the US should still be a boost for Hikma.

Economic Diary

Announcements w/c 15 May 2017

16 May, UK consumer price inflation, April – ONS                                                

Last month, UK inflation surprised on the downside, sticking at 3.2%, with core inflation – ex food, drink and tobacco – dropping back to 1.8% from 2.0% the month before. But the timing of Easter compared to the year before had much to do with this. In April, the upwards trend is likely to be resumed, and further supported by the fact that Easter occurred in the month.  Recent falls in the oil price are not likely to show up in the inflation data in any significant way until May.

17 May, UK labour market statistics, May 2017 – ONS                                         

April was another positive month for the UK labour market, with a 39,000 increase in employment in the three months to April, compared to the previous three month period. But wages rose by 2.3% over the same period. If UK inflation increased in April compared to the month before, and average wages grew at the same pace or slower in the month, then real wages will have fallen.

18 May, Retail Sales in Great Britain: April 2017 – ONS                                               

In March, UK retail sales fell by 1.8% month on month and in the three months to March they fell by 1.4% compared to the previous three month period. The three monthly rate has now fallen for three times in a row.  With Easter occurring in the month, April probably saw a better performance, the BRC Retail Monitor certainly pointed to a big jump.

Further announcements include:

16 May

  • UK House Price Index: March 2017 – ONS
  • Flash Estimate EU and euro area GDP, Q1 2017 – Eurostat

17 May

  • UK productivity flash estimate: January to March 2017 – ONS
  • EU Inflation, April – Eurostat

19 May

  • Monthly Industrial Trends Survey – Confederation of British Industry

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