What to expect from companies announcing results week commencing 29 April 2019.
Companies reporting w/c 29 April
The Share Centre gives its thoughts on what to expect from companies announcing results week commencing 29 April 2019.
Whitbread Plc (Q4 2019 Earnings Release)
Whitbread is now mostly a hotels company as Premier Inn dominates its operations following the sale of the Costa coffee business last year. It has around 75,000 rooms in the UK and plans to increase that to 100,000 in the future, along with expansion overseas in markets such as Germany. The third quarter update in January showed a drop in like-for-like sales in both the accommodation and food businesses. Strength in London was offset by weakness in the regions but recently there have been concerns the weakness may now be creeping into London so the market will focus on any comments on that.
We currently list Whitbread as a HOLD
Companies also reporting this day include: St. James's Place Plc (Q1 2019 Sales and Revenue Release) – BUY and Standard Chartered Plc (Q1 2019 Sales and Revenue Release) – HOLD
Next Plc (Q1 2019 Sales and Revenue Release)
Shares in the clothing retailer have recovered strongly this year, comfortably outperforming the market. In this first quarter update the market will be looking to see if the company still expects full-year profit to drop to £715m. In January the company said it expected trading on the high street to remain challenging but there have been some more positive indications about retail sales since then. Online sales have been growing nicely in recent years and investors will expect to see another strong number for that side of the business. The CEO Simon Wolfson has been one of the few executives to sound fairly upbeat about the impact of Brexit on the business and he may well provide further comments alongside these figures.
We currently list Next as a HOLD
J Sainsbury Plc (Q4 2019 Earnings Release)
With the share price hovering close to a 10-year low and market share falling to around 15.3% long suffering investors are in need of a confidence boost. However, where this will come from remains difficult to see. The main interest could be on the proposed merger with Asda which the regulator has frowned upon. In late March the two groups proposed selling up to 150 stores in order to placate the watchdog.
We currently list J Sainsbury as a HOLD
GlaxoSmithKline Plc (Q1 2019 Earnings Release)
Investors will be hoping these first quarter numbers from the pharma giant can emulate the fourth quarter figures in February by comfortably beating market expectations. The performance of new drugs such as Shingrix will be watched closely. Sales doubled last year while those of long-established Advair waned. The company saw a lot of M&A activity last year, including the acquisition of TESARO, a commercial stage biopharmaceutical company with a portfolio of drugs focussed on oncology. Any comments on the level of synergy benefits will be of interest, as will any news on the expected listing of the new consumer health joint venture with Pfizer.
We currently list GlaxoSmithKline as a BUY
Companies also reporting this day include: London Stock Exchange Group Plc (Q1 2019 Sales and Revenue Release) – HOLD, Persimmon Plc (Q1 2019 Sales and Revenue Release) – HOLD, BP (Q1 2019 Earnings Release) – BUY, Inmarsat (Q1 2019 Earnings Release) – HOLD and James Fisher & Sons Plc (Q1 2019 Sales and Revenue Release) – BUY
Lloyds Banking Group Plc (Q1 2019 Sales and Revenue Release)
There has been a V-shaped recovery in the share price over the past year helped by the CEO's confidence in February with regard to hitting cost cutting targets and a larger than expected share buyback. With its business predominately in the UK and the biggest mortgage provider any comment on the effects of Brexit will be of interest. Investors will be hoping that the groups improving financial performance can be maintained.
We currently list Lloyds Banking Group as a HOLD
Reckitt Benckiser Group Plc (Q1 2019 Sales and Revenue Release)
Recent concerns over charges from the US relating to Indivior which was spun off from Reckitt’s is unlikely to be commented on in this trading update. Instead investors will be concentrating on emerging market performance, margins and hoped for revenue growth. The company produces a number of well-known brands and products that are generally considered as everyday necessities. Market confidence in the group has faltered after a number of trading hiccups.
We currently list Reckitt Benckiser Group as a HOLD
Companies also reporting this day include: Schroders Plc (Q1 2019 Sales and Revenue Release) – HOLD, Coca-Cola HBC AG (Q1 2019 Sales and Revenue Release) – HOLD and Smith & Nephew Plc (Q1 2019 Sales and Revenue Release) – BUY
HSBC Holdings Plc (Q1 2019 Earnings Release)
Speaking recently at the AGM the CEO pointed to a worsening of the global economic outlook but kept targets on return on equity and to maintain the dividend as well as revenue to grow faster than costs this year. The banking sector came under pressure again in 2018 and the group's results in February were underwhelming. With an increasing focus on Asia any comments on the region will be worth noting.
We currently list HSBC Holdings as a BUY
Companies also reporting this day include: InterContinental Hotels Group Plc (Q1 2019 Sales and Revenue Release) – HOLD and Smurfit Kappa Group Plc (Q1 2019 Sales and Revenue Release) – BUY
Next week investors will be keeping an eye on a couple of important economic releases. In the UK, Consumer confidence figures will be announced on Tuesday and the current expectation is for the previous number of -13.00 Index points to remain unchanged. Then on Thursday the Bank of England will announce its latest interest rate decision, while economists’ do not expect a change to the current rate of 0.75%.
In the US, on Wednesday the Fed will announce its interest rate decision. The general consensus is that the rate will remain at 2.5%, since the FOMC have already signalled slowing in rate hike plans. Meanwhile, the latest job creation numbers will be released on Friday. In March, the US economy added 196K new jobs, while the forecast for April stands at 178K.
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