What to expect from companies announcing results week commencing 9 July.
Companies reporting w/c 9 July
Graham Spooner, Investment Research Analyst at The Share Centre, gives his thoughts on what to expect from companies announcing results week commencing 09 July 2018.
Barratt Developments (Q4 sales and revenue release)
Investors should still expect to see strong forward orders supported by several factors including ‘Help to Buy’, low mortgage rates and the shortage of housing in the UK. However, there has been a notable fall in activity in the London market and investors will want to hear if this is impacting on the rest of the country. With the increased level of macro-economic uncertainty investors will look to see if management are taking on a more cautious stance to land and plot acquisition strategy.
We currently list Barratt Developments as a HOLD
Burberry Group (Q1 sales and revenue release)
The last set of full year results closely reflect management’s aims of increasing productivity and efficiencies vs sales expansion as sales fell by 1% while operating profits grew by 4%. Investors will still expect a period of rationalisation but they will certainly be on the lookout for expansionary signs from management after a difficult number of years. Investors will expect an update on the integration progress of Italian handbags and leather goods and will also focus on the performance of key regions including Hong Kong, China and Japan.
We currently list Burberry as a HOLD
Micro Focus International (interim results)
It’s been quite a dramatic year for the software group with problems at its newly-acquired HPE Software assets leading to a lowering of revenue forecasts and the departure of the CEO. Most recently the company announced the sale of its German open source software business SUSE for $2.5bn. Part of the proceeds will be returned to shareholders. These results will be the second set of interims this year following the decision to move the financial year end to October. Investors will be looking to see if the slightly more positive tone on trading given in May has continued. With the shares having halved in value this year the market will be very sensitive to any indication of further problems.
We currently list Micro Focus as a HOLD
Experian (Trading update)
The share price hit an all-time high in June on expectations that the group will continue to make steady progress and the fact that they have a dominant position in its market place. One analyst recently expressed concern that progress may slow in the second half. Areas to concentrate on will be emerging market performance, its key Credit Services and Decision Analytics businesses, effects of FX movements and the UK and Ireland business which has been under pressure.
We currently list Experian as a HOLD
Announcements for the w/c 9 July 2018:
10 July: UK Industrial, Manufacturing and Construction data for May
After a surprisingly good set of forward looking Services PMI data this week, investors will hope that actual production data from these industries will also reflect the positive mood and give us further evidence that weakness in Q1 was impacted by poor weather rather than being more fundamental. Positive data here will go some way toward confirming that Q2 GDP should see a bounce back and will increase the likelihood of an August rate rise.
12 July: US Inflation for June
The year-on-year inflation is expected to tick up higher to 2.9% which should partly reflect higher energy prices in recent months. However, the core rate remains much closer to the target at around 2.1% which shouldn’t cause too much concern for Federal policy makers, however, should this also rise then we could expect the pace of interest rate rises to be quicker. Currently policy makers have signalled that there will be two rises before the end of the year.