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 in the week commencing 6 November 2017.

Companies announcing results next week

Tuesday

Associated British Foods (Full year results)

The last update in September showed a better-than-expected performance at high street clothing business Primark, although recent indicators have suggested some weakening in retail sales in the UK. Any comments on sales in the US will be of particular interest, as will any forecasts for profits at the firm’s recovering sugar business. These results are also likely to show that the translation benefit on sales of the weak pound has started to reduce whereas the increase in costs remains a factor. Investors are expecting to see a healthy rise in the dividend.

Other companies reporting today: Direct Line Insurance (Q3 trading update)

Wednesday

Marks & Spencer (interim results)

The well-known high street retailer is going through a big restructuring plan under new CEO Steve Rowe and the initial results have been less than exciting so far. In July, the company said like-for-like sales in the UK in the first quarter fell 0.5% with the performance of both the clothing and food divisions less than sparkling. Furthermore, it was revealed that the recently-appointed director of clothing had resigned and the firm’s rival, Next, reported a fall in high street sales in its third quarter update. Investors will be hoping for some good news ahead of the key Christmas trading period.

SSE (Q2 results)

The sector has been under pressure of late on the back of politicians on both sides of the house keen to cap energy costs for the consumer.The majority of investors in the company focus on the yield, which is currently around 6.6%. The firm’s growth prospects may not be as attractive for investors and the shares have underperformed year to date on the back of concerns over the threat of an energy cap, as well as falling dividend cover and customer numbers.

Other companies reporting today include: Tullow Oil (Q3 trading update),

Persimmon (Q3 trading update)

Thursday

Lookers (Q3 trading update)

There will be considerable interest in this update given recent news of a fall in new car sales in September and a profit warning at the group’s peer, Pendragon. Lookers itself said previously that it had a healthy order book of new car sales for September, although it was cautious about trading overall in the second half of the year. The strength of used car sales will also be important given that there have been hints of some weakening elsewhere.

National Grid (Q2 results)

For a share that is regarded as being defensive, increased volatility year to date is a concern for investors. Any further news regarding its plans to separate its electricity operator system will be worth noting, as will the performance of its US operations.

Sainsbury (Q2 results)

The share price has struggled to make any head way over the past two years, as a result of increasing competition in the sector. Investors are likely to concentrate on news regarding cost savings and the performance of Argos. The group’s market share continues to fall and currently stands at 15.8%.

AstraZeneca (Q3 results)

After the disappointing news from the Mystic trial in July, the share price has since recovered all the losses. In its last update, Management suggested that all is not lost from these trails and there could yet be some positives to come from this, so investors will be keen for an update here. There will still be pressure on sales from generics especially on Crestor, but we should slowly see sales of their Growth Platforms make up for the losses. Increased penetration into the emerging markets has also helped. Investors will expect to hear more positive news on other R&D projects and expect some operational efficiencies as a result of a cost cutting exercise.

Burberry (Q2 results)

After a troubled few years Burberry’s shares have staged a good recovery with the price back to an all-time high. The key reason for this is the recovery in some of the key markets for luxury goods, especially China and the Far East. Tourists travelling to the UK to take advantage of sterling’s weakness should also show through in the numbers. With the new CEO firmly in place, investors will be keen to see the impact of his less expansionary and more operational efficiency stance showing through in the latest quarter. Christopher Bailey’s recent announcement that he will step down as chief designer has created a little shock to the share price, so investors will be seeking some reassurances from the management in this regard.

Companies also reporting today include: Inmarsat (Q3 results), Wincanton (Q2 results), Hikma Pharmaceuticals (Q3 results), Informa (Q3 trading update)

Friday

Vedanta Resources (Q2 results)

Apart from oil production where there was a natural decline in the resource base, the group experienced good production growth across most other commodities during the last quarter and with generally improving commodity prices, the group should see a boost to its sales. Investors will hope that a strong Indian economy and improving sales figures will help reduce the group’s large debt burden. Investors will also expect commentary on exploration programmes, especially in their oil division.


Economic Diary

9 November, Residential Market Survey – Royal Institution of Chartered Surveyors (RICS) 

The RICS survey is closely watched, but after falling to a reading of just one in July, the index has been at six for the last two months, suggesting a quiet housing market, but very mild increases in prices. Will the pattern of the last two months be repeated?

10 November, Construction Output in Great Britain: September 2017 and new orders July to September 2017, UK overseas trade statistics: September 2017, UK index of production: September 2017 – Office for National Statistics 

Last month, saw the best combined data on UK manufacturing and construction for some time, although the deficit on goods and services widened. Manufacturing grew by 0.4% on the month before, and by 1.6%, quarter on quarter, while construction posted a 0.6% expansion after contracting in the two previous months. However, the data on UK trade was disappointing, with the overall trade deficit rising to £5.6 billion. Did growth in manufacturing and construction continue in September, and did the trade figures see the kind of improvement which some of the recent surveys, such as the purchasing manager’s indexes, have been predicting?

 

Please remember, no news or research item is a recommendation or advice to buy. Every Investor is not responsible for accuracy and may not share the author’s views. If you are unsure of the suitability of any investment for your circumstances please contact an adviser. All investments can fall as well as rise in value so you could get back less than you invest and tax policies may change.

 

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