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 22 May 2017.

Companies announcing their results next week

Tuesday

AVEVA (Q4 preliminary results)

Despite the downturn in global oil and commodity prices and excluding the effects of merger news, AVEVA’s shares have held up since the group’s software helps design infrastructure in a way to reduce costs. Management have already indicated that they expect to return to growth in both revenues and earnings helped along by currency movements and that cash generation will be approximately £130m. Its new range of products has been attracting customer attention while weaker shipbuilding in Korea is expected to hit the numbers and investors may also want to focus on the pension deficit.

Severn Trent (Q4 results)

There is unlikely to be much excitement in the results with comments mainly on cost savings and efficiencies. The group, which is focussed on water services to more than four million households and businesses in Wales and the Midlands, may comment on the potential for political pressure on energy prices to grow. Analysts have also been turning a little more cautious ahead of the regulators initial proposals for 2020–25 price setting, which is due in December.

Wednesday

Dixons Carphone (Q4 trading statement)

Investors will be awaiting this update with considerable interest. The last report from the company in January showed good sales in the run-up to Christmas, especially in the UK & Ireland. However, retail sales data since then has shown a worsening trend while rising inflation has led to fears that consumers may pull back from discretionary purchases.

Marks & Spencer (Final results)

There have been better signs at the troubled clothing and home products side of this well-known business. In January the group reported better than expected numbers and since then the shares have been boosted by management changes including bringing in Jill McDonald from Halfords to take over the clothing side and Archie Norman as chairman. Any comments on how the restructuring plan is going will be of interest, as will any tweaks to the strategy.

Companies also reporting today include: Babcock International (Q4 results), Vedanta Resources (Q4 preliminary results) and Kingfisher (Q1 trading update)

Thursday

Tate & Lyle (Q4 results)

Once famous for its sugar business, it is now in the business of supplying ingredients and solutions to the food, drinks and other industries. The Speciality Food division produces sweeteners, texturants and food ingredients. The Bulk Ingredients manufactures and markets a range of products including liquid sweeteners, starch and ethanol. Investors will be hoping that the stronger performance in the third quarter has continued and that the group remains on track with its strategic targets.

Companies also reporting today include: AB Dynamics (Q2 results) and United Utilities (Q4 results)

Friday

Intertek (Q1 trading update)

We have long liked this low profile company who are now trading at an all-time having generated strong sales and earnings growth both organically and through acquisitions. The global quality assurance market continues to grow as a result of increasing regulatory, quality and safety standards in both developed and developing markets. Consensus expectations are that last year’s momentum has followed through in the first quarter and we will continue to the see the benefits of sterling’s weakness. The Resource division however faced a tough year so it will be interesting to see if there has been any improvement in infrastructure investments in the commodity sector.

Economic Diary

Announcements w/c 22 May 2017

23 May, Quarterly Distributive Trades Survey – Confederation of British Industry

UK retail has been struggling, but recent data has been distorted by the timing of Easter, with it occurring in March in 2016 but in April of this year. Today’s report from the CBI will give us the first indicator of retail sales  in May, and for the first time in two months we will get information on retail that is not distorted by the timing of Easter. Did May see an improvement on what has been a disappointing year for UK retail?

24 May, FOMC Minutes Meeting of May 2 – 3, 2017 – US Federal Reserve System

The FED’s FOMC elected to keep US interest rates on hold earlier this month, but expectations of a US rate hike in June are high.  Do today’s minutes lend support to these expectations?  The last time US interest rates went up was in March, when they were increased from 0.75% to 1%.

Further announcements include:

23 May

  • Public Sector Finances – Office for National Statistics

25 May

  • UK GDP, second estimate: January to March 2017 – Office for National Statistics
  • Business investment in the UK, provisional: January to March 2017 – Office for National Statistics
  • UK index of services: March 2017 – Office for National Statistics

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