What to expect from companies announcing results week commencing 4 February 2019.
Companies reporting w/c 4 February
The Share Centre gives its thoughts on what to expect from companies announcing results week commencing 4 February 2019.
BP (Q4 2018 Sales and Revenue Release)
With far better average selling prices for oil during 2018 compared to 2017 and cost cutting measures that were put in place following the plunge in oil prices since 2014, investors should expect a huge improvement in operating profits. Expectations are that operating profits will have doubled from the previous year, similar to peer Royal Dutch Shell's latest set of results. Improved production levels during the year will also have made a major contribution. The better results will lead to investors still expecting a solid dividend, continued support to the share price through a buyback programme along with the debt being paid down further. Investors will also be keen to hear of the integration progress made with shales assets acquired from BHP.
We currently list BP as a BUY
Ocado (Final results)
Interesting rumours recently of secret talks between Ocado and M&S on a number of possibilities, including grocery deliveries and even a suggestion that M&S might buy Ocado’s entire supermarket delivery operation to leave Ocado free to focus on its technology side. Ocado currently has delivery deals with Morrisons and Waitrose. Shares in both companies rose and it was very interesting that neither issued denials. Last quarterly update showed good growth in revenues and average orders per week. In this full-year results statement investors will also be looking out for any further news on the deal with US grocery store group Kroger.
We currently list Ocado as a HOLD
St Modwen Properties (Final results)
Property company best known for developing brownfield sites for both residential and commercial. A number of assets were sold off in 2018 for around £529 million. Having stated in December that they are performing in line with expectations investors will not be expecting anything out of the ordinary. Any updates on future plans with regard to new build and of course their outlook in light of Brexit will be important.
We currently list St Modwen Properties as a BUY
GlaxoSmithKline (Q4 2018 Earnings Release)
The 2018 results will be much better now than anticipated this time last year due to the delay in the launch of generic rival to their blockbuster Advair drug. While other drugs continue to face generic competition, we have seen through the previous trading updates that sales of newer drugs are performing exceptionally well including Shingrix Shingles Vaccine. GSK have involved in a good deal of M&A activity and the disposal of consumer healthcare portfolios to Unilever will reflect well on the net profits while investors will be keen to hear of the integration progress of acquired businesses such as TESORO Inc. and the merger certain businesses with Pfizer.
We currently list GlaxoSmithKline as a BUY
Companies reporting this day include Barratt Developments (Q2 2019 Earnings Release) – HOLD, Severn Trent (Q3 2019 Sales and Revenue Release - Trading Update) – HOLD
Compass Group (Q1 2019 Sales and Revenue Release - Trading Update)
In this first quarter trading update the market will be watching out for the performance of the all-important North American business. The full-year figures in November were solid with a 5.5% rise in revenue and the company forecast a similar level of growth in the new financial year. Any comments on costs in the UK, which have been rising recently, will also be of interest, as will prospects for emerging countries given the slowdown in China. The market is expecting profit margins to increase slightly this year so any mention of that will be a focus as well.
We currently list Compass as a BUY
Tate & Lyle (Q3 2019 Sales and Revenue Release - Trading Update)
The new CEO came out with his strategy plan last year to concentrate on customers, accelerate portfolio development and simplify the business & improve productivity. The group now involved in sweeteners and food ingredients are focussing on drinks, dairy, soups, sauces and dressings. Investors tend to focus on North America which is its biggest market. The share price has been making steady progress and outperforming so an amount of positive expectations has been building.
We currently list Tate & Lyle as a BUY
Companies reporting this day include Smith & Nephew Plc (Q4 2018 Earnings Release) - BUY
SSE (Q3 2019 Sales and Revenue Release - Trading Statement)
The group had a difficult 2018 culminating in the failure to merge its retail business with Innogy. Investors will be expecting an update on the groups options going forward. Customer numbers have continued to fall and there may be other comments around cost savings and SSE Renewables. As ever with utility companies any news or comments in relation to regulatory matters will also be worth noting.
We currently list SSE as a HOLD
7 Feb, Bank of England Interest Rate Decision, Minutes and Inflation Report
It is highly unlikely that we will see any move from the Bank of England given the cliff edge scenario we could face from a No-Deal under two months away. Inflation has also been heading back in the right direction towards the bank’s 2% target range while economic indicators suggest slowing growth rates from some of our key trading partners including European countries and the US. There will though be a very keen following for the press briefing for signs of contingency planning from a no deal scenario and interest rate expectations and inflation paths from their famous fan-tail charts.
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.