Graham Spooner gives his thoughts on what to expect from companies announcing results week commencing 5 March 2018.
Companies reporting w/c 5 March
Graham Spooner, Investment Research Analyst at The Share Centre, gives his thoughts on what to expect from companies announcing results week commencing 5 March 2018.
Intertek (Q4 results)
A steadily improving global economy is fantastic news for this company which is heavily dependent on global trade flows. The commodity markets have been improving, and increasing regulatory, quality and safety standards means a steady increase in demand for its services from labs that are dotted in locations all over the world.
Weak sterling will therefore boost the full year figures and investors will expect acquired businesses to be progressing well towards integration.
We currently list Intertek as a BUY
Just Eat (final results)
The food delivery platform has enjoyed strong growth for many years and has been a stellar performer on the market since it floated in 2014. In December, it moved up to the FTSE 100 index following a third quarter update which showed revenues were up by 47% while full year profit guidance was raised from £500-515m to £515-530m.
Investors will be keen to see if the UK business remains strong, but will also be looking at the overseas operations. Any hints of possible dividend payments will also be of great interest.
We currently list Just Eat as a HOLD
Companies also reporting today include: Ashtead (Q3 results) - BUY
Breedon Group (Q4 results)
There has been recent news that the group is looking to make another acquisition of Belfast based Lagan Group. Investors will be keen to hear its outlook for the year ahead, especially with regard to housing, which is where much of the recent growth has come from.
The company has been expanding its geographical presence in the UK and the performance of acquisitions will also be worth noting.
We currently list Breedon Group as a BUY
Hill & Smith (Q4 results)
The last update from this infrastructure products group in November was fairly upbeat and there shouldn’t be any big surprises here. The company said that its international operations had performed well but there had been signs of some signs of weakness in the UK roads and utilities businesses.
Any comments on plans for the profitable and growing galvanizing business will also be of interest to the market.
We currently list Hill & Smith as a BUY
Rolls-Royce Holdings (Q4 results)
The group’s restructuring a little while ago seems to have gone well. We had a good set of first half results and the trading update late last year was also encouraging so investors should expect more of the same for the full year. However, weak conditions in maritime have been affecting most companies and this should be no different for Rolls Royce.
There was a positive reaction when management earlier this year mentioned the possible sale of the unit; further news on this will be expected along with other reorganisations within the group.
We currently list Rolls-Royce Holdings as a BUY
Paddy Power Betfair (Q4 results)
These will be the first results delivered by new CEO Peter Jackson who takes over from long-serving Breon Corcoran. The market will be interested to hear his initial thoughts on the company which has seen good trading at its Australian and US businesses in recent times. Online sports betting has also been a strong point and the market will be looking to see if it achieves its £450m-£465m forecast for profits.
We currently list Paddy Power Betfair as a HOLD
Restaurant Group (final results)
The sector has been in the spotlight of late as a result of some high profile closures. Areas to concentrate on will be costs, dividend policy and whether volume momentum has been maintained. Competition and consumers eating out less has made life tough for the group, leading to management instigating a strategic review, which is now complete. The group is pushing the focus on its brands and improving the customer experience.
We currently list Restaurant Group as a BUY
Companies also reporting today include: DS Smith (Trading update) – BUY, Lookers (Q4 results) – BUY, Legal & General (Q4 results) – HOLD and Anpario (Final results) - BUY
G4S (Q4 results)
Analysts have been highlighting improvement in profit margins, productivity programs and especially demand for its automated cash handling business. Its Cash360 system allows retailers to outsource their cashing up process.
Investors who have seen a decline in the share price since last spring will be looking for further signs of improvement as a result of restructuring in an attempt to improve efficiency, cut costs and debt.
We currently list G4S as a BUY
Companies also reporting today include: Aviva (Q4 results) – BUY
Inmarsat (Q4 results)
The stock has been a very disappointing performer in the last couple of years, mainly due to the weakness in the Maritime division caused by the lower oil price, but other divisions have performed much better. Improving government budgets and increased spending by airlines on in-flight broadband are key growth areas.
Investors will be keen to hear if customers are more welcoming now to adopting the newer technologies the group has offered. With a high dividend yield, and given the difficult period the group has faced, investors will hope that management can carry on to reward investors well with income.
We currently list Inmarsat as a BUY
Economic Diary: week commencing 5 March 2018
5 March, Purchasing Managers Index, services and composite index, February – Markit/CIPS
Last month, the purchasing managers index (PMI) tracking services fell sharply to 53.0, pointing to expansion in the sector being at a 16-month low.
The three PMIs tracking manufacturing, services and construction pointed to a quarterly growth rate of just 0.3% in January and February. To note will be whether, when the quarter is completed, there will be a more encouraging set of figures.
8 March, Governing Council of the ECB: monetary policy meeting in Frankfurt – European Central Bank
We are as certain as you can be with these things that UK and US interest rates are going up this year, but what about in the euro area? Recent data showed a fall in inflation in the region, which, at 1.2%, shows no sign of becoming a problem. The message from the ECB may turn out to be quite dovish.
9 March, US employment situation, February – U.S. Bureau of Labor Statistics
It was the continued robustness of the US jobs market that led to sharp falls in stock markets at the beginning of February. Markets feared that the continued strength of US employment meant that the FED was more likely to increase interest rates at a pace which was faster than previously expected. Last month, US non-farm payrolls increased by 200,000 and unemployment stayed on hold at 4.1%.
If the news on jobs continues to be good, the markets may engage in more selling and when it comes to interest rates, good news can be bad news.
Further announcements include:
|5 March||Purchasing managers indexes, services and composite, euro area (Markit), US (Markit and ISM) and China (Caixin and official).|
|7 March||EU GDP and main aggregates, Q4 – Eurostat.|
|9 March||UK index of production, January 2018 – Office for National Statistics.|
|9 March||UK trade, January 2018 – Office for National Statistics.|
|9 March||Construction output in Great Britain: Jan 2018 and new orders Oct to Dec 2017.|
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