Companies announcing results next week

Graham Spooner, investment research analyst at The Share Centre, gives his thoughts on what to expect from companies announcing results week commencing 10 July 2017.

Companies announcing results next week

Tuesday

Marks & Spencer (Q1 trading update)

There’s been a lot of focus on the retail sector in recent times as inflation has risen and there have been signs of a fall in consumer sentiment.  A survey by The Times in May suggested many retail groups had fairly low expectations for the current year. M&S’ full-year figures in the same month showed robust sales on the food side and some positive signs in the clothing and homeware business. The market will be keen to hear how the extensive restructuring programme is going and looking for early guidance on full-year earnings and sales.

Wednesday

Barratt Developments (Q4 trading update)

We have continued to see some excellent trading figures from companies in the sector with double digit revenue growth. It should be no different with Barratts who are expected to show legal completions and average high prices continuing to rise. As with their peers, we will probably see a statement suggesting that the UK general election did not cause too much of a disruption as consumer confidence levels remain high with good mortgage rates and availability.  It would be interesting to see what their plans are going forward such us land bank acquisition strategies and plans for new retail showrooms.

Micro Focus International (Q4 results)

It’s been quite a volatile year so far for shares in the software group Micro Focus International. Much of that is due to news about the newly acquired Hewlett Packard (HPE) software assets. Some upbeat comments on the potential for margin improvement in April were rather overshadowed by disappointing news on sales in May. Full year revenues are expected to remain fairly flat but the main focus for the market will be any news on expectations for sales at HPE in the new financial year. The level of dividend payments will also be of considerable interest.

Burberry (Q1 trading update)

Key to the group is the health of the Chinese economy, but the latest evidence is that China is beginning to show some weakness again. However, for the group as a whole, it was reporting better quarterly updates lately and there is expectation for some of the momentum to continue. There may be a continued pickup in the European markets while UK sales should be boosted by a weak sterling and overseas travellers shopping over here. Licensing and Wholesale will probably continue to fall, as planned while investors will look forward with interest in the style and tone of comments from new CEO Marco Gobbetti.

Thursday

Babcock International Group (Q1 trading update)

The share price has struggled to make any headway this year and the recent election result in the UK has added a further element of uncertainty. In the last update the group stated that they have identified significant opportunities across their core markets and that they remain confident to achieve mid-single digit organic revenue growth this year. Investors will be hoping for further news on these opportunities.

Economic Diary

Announcements w/c 10 July 2017:

12 July, UK Labour market, three months to May – Office for National Statistics

Last month, the news that UK unemployment had fallen to 4.6%, the joint lowest level since 1975, was warmly received, as was the news that the employment rate rose to the joint highest level since comparable records began. Unfortunately, the report also revealed that wages with bonuses, in the three months to April, rose by 2.1% and by just 1.7% excluding bonuses. Real wages fell by 0.6%, excluding bonuses. The fall in real wages is beginning to have an adverse effect on retail sales. UK inflation rose to 2.9% in May; it is likely that real wages fell at an even faster rate in May.

13 July – Residential Market Survey, June – Royal Institute of Chartered Surveyors

The closely watched Residential Market Survey pointed a further slowdown in May, with the headline index falling from plus 22 to plus 17. But lack of supply is supporting prices. Both new buyer enquiries and new sales instructions fell in the month. The UK housing market continues to be haunted by poor demand and supply, but with real wages falling and the Bank of England apparently contemplating a hike in interest rates, can house prices continue to rise for much longer?

14 July, US consumer prices, June – Bureau of Labor Statistics

While UK inflation continues to rise, US inflation seems to be on a downward trajectory, with the headline rate falling to 1.9%, from 2.2% the month before, and core inflation – without food and energy – falling to 1.7%, a two year low. Did US inflation continue to fall in June, and if it did, will this persuade the Fed to drop its plans to gradually increase US interest rates?

Further announcements include:

10 July

Quarterly Financial Services – Confederation of British Industry

13 July

Profitability of UK companies, January to March 2017 – Office for National Statistics

UK economic review, July – Office for National Statistics

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