What to expect from companies announcing results week commencing 10 September 2018.
Companies reporting w/c 10 September
Graham Spooner, Investment Research Analyst at The Share Centre, gives his thoughts on what to expect from companies announcing results week commencing 10 September 2018.
Associated British Foods (Q4 earnings release)
There shouldn't be too much surprise in terms of the top line figures in this update as the group reiterated its full year guidance in July. The focus for investors will be on the outlook for the sugar business given that forecasts for profitability have steadily worsened so far this year. Sales at Primark fell in the first half overall, although they remained good in the UK, so any comments on that will be of interest especially in light of the devastating fire at the Belfast store recently. The market is also expecting to see a big improvement in the profit margin at Primark in the second half of the year.
We currently list ABF as a HOLD
Ashtead Group (Q1 2019 earnings release)
Ashtead’s shares have powered ahead this year thanks to its strong performance, benefitting from the growth in the construction and housing markets in the US. The market will be looking to see if the good earnings momentum has continued into the new financial year. One of its main North American peers, United Rentals, announced good second quarter figures in July which augurs well for Ashtead. Any comments on further equipment purchases or costs associated with recent acquisitions will be of interest, along with guidance for the full year.
We currently list Ashtead as a BUY
Morrison (Q2 2019 earnings release)
Expectations have been growing for the group to report improvements in margins and revenue and they will be helped in the future by signs of slowing growth at some of its rivals. Market share has been holding at around 10.5%. The share price has picked up since March recently hitting a 4 year high. Areas to concentrate on will be cost cutting measures and the performance of wholesale sales, with the group targeting £1 billion of supply sales. Long suffering investors should however watch the situation closely, as the retail environment is changing and remains crowded.
We currently list Morrison as a HOLD
Announcements for the w/c 10 September 2018:
10 September: UK Industrial Production, Manufacturing Production and GDP for July
Both the Manufacturing and Industrial sectors showed growth during June but the question is whether they do as well as the services industry which published some good figures last week. The hope is that the July’s figures can build upon June’s and give us further evidence that Q3, like Q2 should demonstrate a bounce back from the weak Q1. The new monthly data for GDP should show a continued build-up of economic activity, but any comment on the impact of the heatwave during July will be noteworthy.
11 September – UK Jobs Data for July
The consensus view is that the UK unemployment rate should stick to historic lows of 4% for July, but focus will remain on the rate of wage growth which still sits low by historic standards when compared against the current unemployment rate and economic growth. Naturally the shift towards further adoption of technology and the gig economy may get part of the blame.
13 September – Bank of England’s Interest Rate Decision
No one is expecting any further hikes given the previous month’s rise to 0.75% but it will be interesting to see if Mark Carney has much foresight beyond Brexit given that he will be hanging around a bit longer now.
Outside of the UK look out for inflation and Industrial output data out of China (Monday & Friday), comments from the ECB after its interest rate meeting (Thursday) and multiple pieces of data out of the US on Thursday and Friday including inflation, retail sales, and industrial production.
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