What to expect from companies announcing results week commencing 19 March.
Graham Spooner, Investment Research Analyst at The Share Centre, gives his thoughts on what to expect from companies announcing results, week commencing 19 March 2018.
Finsbury Foods (Interim results)
In January the group stated that performance was in line with management expectations so investors will be expecting more of the same. There will be hopes for signs of improvement in its European operations and that sales have continued to rise in the UK. Other areas to concentrate on will be costs, debt and the bedding in of acquisitions.
We currently list Finsbury Foods as a BUY
Enquest (Q4 results)
We could see a mixed picture for Enquest from its full year results as production previously suffered due to the natural decline of resources at some of their fields but much improved oil prices should support revenues. Investors will focus on how the new fields such as Kraken are performing and whether the group have managed to reduce its high debt levels.
We currently list Enquest as a BUY
Kingfisher (Q4 results)
The owner of B&Q is gearing up for one of its busiest periods of the year, the Easter weekend, which is a time when many people use its products for spring cleaning and DIY jobs. The last update from Kingfisher, a third quarter statement in November, was notable for signs of continued weakness in its French businesses although the company said it remained on track to deliver full-year profit targets. The shares have recovered strongly since then, boosted by news in February of poor trading at Homebase. It will be interesting to see if B&Q benefited or was struck by the same malaise.
We currently list Kingfisher as a HOLD
Next (Q4 results)
Times are certainly tough for high street clothing retailers and Next is not alone in seeing weak trading in recent months. Full-year profits should not be a big surprise given the update in January which gave £725m as the forecast. The other main points for those investing will be whether the divergence in online and high street sales remains as wide as ever, whether costs are under control and whether the company still expects profits to fall in the new financial year to January 2019.
We currently list Next as a HOLD
Smiths Group (Q2 results)
Investors will not have high expectations for the industrial conglomerate’s oil services business John Crane as the sector still feels the impact of lower capital investment in general. There are hopes though that its Medical devices business has overcome its issues with product launch delays and the trading environment for Smiths Interconnect has improved. Meanwhile the Flex-Tek should have continued to benefit from good US construction activity.
We currently list Smiths Group as a BUY
Economic Diary: week commencing 19 March 2018
20 March, Consumer prices inflation, February – Office for National Statistics
Inflation has become stubborn, it was widely predicted to fall back towards the end of last year; instead it rose to 3.1% in November, and stood at 3.0% in both December and January. The effect of post Brexit falls in sterling should have worked its way out of the inflation figures by now, and inflation should start to fall very soon. But did this happen in February?
21 March, FOMC Meeting, Two-day meeting, March 20-21 – US Federal Reserve System
There will be few surprises if the FOMC announces a 0.25 percentage points increase in interest rates today to the 1.5%-1.75% range. More interest relates to what the new chair, Jerome Powell, says in the press conference about plans for future hikes. As it is, US rates are expected to rise three or four times this year and maybe on two occasions next.
22 March, Monetary Policy Committee Meeting and minutes – Bank of England
The Bank of England is expected to increase interest rates this year, maybe two or three times, but there will be surprise if it announces a rise today. However, the minutes may hint at when the next hike will occur, possibly as soon as May.
Further announcements include:
|20 March||Producer prices, February – Office for National Statistics|
|20 March||UK house price index, January – Office for National Statistics|
|21 March||Industrial trends survey – Confederation of British Industry|
|21 March||Labour market – Office for National Statistics|
|21 March||US public sector finances, February – Office for National Statistics|
All information given including prices, yields and our opinion is correct at the time of publication. Our opinions on investments can change at any time and for our latest view please go to www.share.com. To understand how our Investment research team arrive at their views please read our Investment Research Policy.