Companies reporting w/c 14 May

What to expect from companies announcing results week commencing 14 May 2018.

Article updated: 10 May 2018 11:00am Author: Graham Spooner

Graham Spooner, Investment Research Analyst at The Share Centre, gives his thoughts on what to expect from companies announcing results week commencing 14 May 2018.

Monday

Centrica (Q1 trading update)

Pressure continues to remain on the company, especially from politicians. Analysts are concerned over future growth and the dividend. Investors will focus on costs and the group’s efficiency programme, along with the performance of its North American business. Confidence in the group and management is at a low ebb so investors will also be looking at comments regarding the year ahead.

We currently list Centrica as a HOLD

Tuesday

easyJet (Q2 earnings)

The last trading update in January was very positive with revenue per seat up 6.6% in the first quarter on a constant currency basis. The market will be hoping for full-year profit guidance alongside the interim results and any update on fuel costs, which were expected to fall this year, will also be of interest. The company said previously that it expects to increase seat capacity by 5-6% in 2018 and sector consolidation is firmly underway at present with easyJet part of a consortium which has bid for Alitalia, while IAG is looking at a bid for Norwegian Air Shuttle.

We currently list easyJet as a BUY

Vodafone (Q4 earnings)

The recent announcement of the €18.4bn acquisition of cable networks in Germany and Eastern Europe from Liberty Global somewhat plugs the gap that Vodafone has been lacking. Markets have also welcomed the deal as the group finally puts their large cash pile to work and transitions towards being more of a telecoms provider than just a mobile operator. From their full year results we would hope to see the recovery in the European economy feeding through to service revenue growth and also a progress report of their Indian business which merged with a local rival. Mobile data demand and emerging markets should still be the drivers of growth for the business.

We currently list Vodafone as a BUY

Companies also reporting today include:

Hargreaves Lansdowne (Q3 sales and revenue release) – HOLD, Land Securities Group (Q4 earnings) - HOLD

Wednesday

Burberry (Q4 earnings)

After a difficult few years, 2017 has seen better trading conditions especially in the emerging markets and key areas including Hong Kong and China. The new management have indicated a more cautious approach to expansion, preferring to increase productivity and sales from existing floorspace and we’ll see how this is has been implemented. For the final quarter of their financial year we should see a dampening effect of sterling’s recent strength.

We currently list Burberry as a HOLD

Marston’s (Q2 earnings)

Bad weather has dogged the pub sector over the winter and Marston’s has been no exception. It had an impact in December and this update is expected to show a further impact. The focus will be on the performance of the Destination and Premium pubs, while cash flow will be another keenly watched figure given the implications for dividend payments. The company plans to open 15 new pubs this year and with major sporting events such as the World Cup in June there are hopes that will boost takings.

We currently list Marston’s as a BUY

Companies also reporting today include:

Mondi (Q1 trading update) - BUY

Thursday

The British Land Company (Q4 earnings)

Interesting times for property developers with Hammerson having declined a takeover bid and then decided against a merger with rival Intu Properties. With British Land’s portfolio of retail and office property in London this update will provide an interesting snapshot of demand, especially given the backdrop of concerns about high street retailing and the uncertainty caused by Brexit. The volatility in the shares over the past year reflects that, and they still trade on a fairly high discount to net asset value.

We currently list The British Land Company as a HOLD

Royal Mail (Q4 earnings)

The share price has powered ahead in recent months on the back of reaching a deal with the Communication Workers Union regarding pensions and pay. Investors have been hoping that as a result productivity will improve, helped further by greater use of technology. Restructuring is set to continue with the continuing decline of letters and the increase in parcels from internet shopping.

We currently list Royal Mail as a HOLD

Companies also reporting today include:

Wincanton (Q4 preliminary earnings) – BUY, Hill & Smith Holdings (Q1 trading update) - BUY

Economic diary

15 May: UK Unemployment data for March/April

The unemployment rate for March is expected to remain near its lows of 4.2%, but more encouraging is the fact that wage growth is expected to build on the previous month’s improvement to 2.9% and above the recent down trending rate of inflation.

15 May: US Retail Sales for April

March’s figure received a big boost from surge in car buying activity after a poor few months. However, the April figures are expected to moderate a little to 0.45% month on month growth, this could be partly explained by lower consumer sentiment indicators in April amid concerns of Trump’s policies stoking fears of trade wars.

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.

Graham Spooner portrait photo
Graham Spooner

Investment Research Analyst

Graham started out as a fully authorised dealer on the Stock Exchange trading floor and for various banks, before becoming an FSA-approved investment adviser. Now a respected voice in the media, Graham’s share tips and comments on the markets are frequently sought by the national press.