What to expect from companies announcing results w/c 12 February
Companies reporting w/c 12 February
Graham Spooner, Investment Research Analyst at The Share Centre, gives his thoughts on what to expect from companies announcing results week commencing 12 February 2018.
Coca Cola HBC (Final results)
In November, the company said it was confident of achieving full-year expectations with good trading in all three of its main geographical markets. The shares enjoyed a strong recovery for over a year up to September last year but have since fallen back. A new sugar tax on soft drinks is due to come into effect in April which will impact the sector although many have already reduced sugar levels and are planning to make product changes. Any comments on the possible acquisition of fellow bottling group Coca Cola Bottling Africa (CCBA), which Coca Cola is currently looking to sell, would also be of interest.
We currently list Coca Cola HBC as a HOLD
Shire (Trading update)
The inclusion of acquired business Baxalta will improve overall results and this will somewhat mask the issues that Shire faces from generic competition, just like any other large pharmaceutical. However, investors will expect integration synergies from acquisitions along with improved prospects going forward from new drugs in the R&D pipeline. Investors will also await decisions on previously suggested businesses that they contemplated putting up for sale. Investors will also want an update on the debt position which has risen to fund acquisitions.
We currently list Shire as a HOLD
Convatec (Final results)
The medical supplies group’s share price has been very disappointing following a profit warning late last year as the group faced operating challenges in transferring manufacturing capacity from the US to the Dominican Republic, these efforts were not helped by the series of hurricanes in the Caribbean during this period. Investors will hope that there were improvements in the final months to drive sales higher than their indicated 1-2% rate of organic growth. Hopefully backorders will have been fulfilled and not cancelled. Investors will also keep an eye on the level of competition from larger businesses in the industry.
We currently list Convatec as a BUY
Relx (Q4 results)
The share price has come under pressure this year, following on from the acquisition of ThreatMetrix in January. Investors will be hoping that solid like for like growth continues across all of its divisions as well as with its margins. Risk Solutions has been the best performing division of late, providing information to help prevent and spot fraud. The outlook for the year ahead will also be worth noting.
We currently list Relx as a HOLD
Segro (Final results)
Segro’s shares have had a good run over the past year, taking them close to the 600p mark last seen in 2008. The property developer has benefited from the growth of online retailing and the subsequent increased demand for warehousing. In its third quarter update in October the company said demand for prime warehouse assets, especially related to ecommerce, remained strong. Investors will be looking for information on how rents are performing as well as any change in the vacancy rate. Also an update on how the APP cargo assets at Heathrow, acquired last year, are performing.
We currently list Segro as a HOLD
Announcements for the week commencing 12 February 2018
13 February, UK consumer price inflation and producer prices, January 2018 – Office for National Statistics
Last month, UK inflation fell, dropping from 3.1 in November to 3%. During the first half of last year, analysts had forecast that inflation would peak at around 3%, towards the year’s end. Their forecast may have been out by 0.1 percentage points, but it does seem that inflation is set to fall. However, recent rises in the oil price may start pushing up on inflation and the view that inflation will steadily fall this year may prove to be an exaggeration.
14 February, US Consumer prices, and producer prices, January – U.S. Bureau of Labor Statistics
Following recent falls in stock markets over fears that US interest rates may be forced to rise faster and higher than previously expected, even more attention than normal will be paid to the data on US inflation. In December, headline inflation was 2.1%, but core prices (ex food and energy) rose by 1.8%. Recent purchasing managers’ indexes have suggested that cost pressures are building.
16 February, UK sales in Great Britain, January – Office for National Statistics
According to the latest survey from the British Retail Consortium, January saw growth in retail sales which was roughly on par with the 2017 average. With inflation expected to fall, and thus real wages rise, there is a view that retail sales may increase at a faster rate later in the year.
Further announcements include:
|13 February||UK House Price Index: December 2017 – Office for National Statistics|
|14 February||Flash Estimate EU and euro area GDP, Q4 2017 – Eurostat|
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