What to expect from companies announcing results week commencing 13 May 2019.
Companies reporting w/c 13 May
The Share Centre gives its thoughts on what to expect from companies announcing results week commencing 13 May 2019.
Centrica (Q1 2019 Sales and Revenue Release)
Long suffering investors have seen the share price hit a 20-year low recently, following on from another profit warning in February. Confidence in the group and management is low and investors now have to consider the future sustainability of the dividend. The best the market will be hoping is for no more bad news.
We currently list Centrica as a HOLD
Land Securities Group (Q4 2019 Earnings Release)
After a tough period for the shares following the 2016 Referendum they have shown some better form so far this year, outperforming the sector and the wider FTSE 100. In these full year figures there will naturally be a lot of focus on how the retail assets are performing given recent events concerning Debenhams, but the market will also be interested in how demand for offices in central London is holding up given all the uncertainty around Brexit. The net asset value has fallen back slightly over the past couple of years so it is no surprise shares trade at a relatively high discount. Peer British Land is due to report the following day.
We currently list Land Securities Group as a HOLD
Vodafone Group Plc (Q4 2019 Earnings Release)
Investors in the telecoms giant will be very disappointed in the share price given it has nearly halved in just over a year following competition issues in India and growth concerns in its various European markets. This has brought about the question over whether management will seek to cut back on the very generous dividend, therefore any reassurances over this will give a significant boost to the share price. Investors will also look out for comment on the groups various M&A and partnerships activity.
We currently list Vodafone Group as a BUY
Experian (Q4 2019 Earnings Release)
Its important North American operations have been performing well with good organic growth. Experian have a dominant position in its market place and there has been steady expansion into emerging markets and new products in areas such as fraud, health and analytics. Other attractions include steady returns, strong cash flow and margins, limited concerns over competition and a diversification strategy that has moved it away from relying on the banking sector. Comments on the year ahead especially with regard to growth forecasts will be worth noting.
We currently list Experian as a HOLD
Kingfisher Plc (Q1 2019 Sales and Revenue Release)
There will be considerable interest in this first quarter trading update given that spring is usually a strong period for DIY activity and the Easter bank holiday weekend enjoyed exceptionally good weather this year. That should bode well for the B&Q and Screwfix businesses. The market will also be looking to see any improvement in the French operations, especially Castorama which has been weak for some time. Any update on the company’s search for a new CEO to replace Veronique Laury will also be of interest –although it may be a little too soon for anything firm on that.
We currently list Kingfisher as a HOLD
TUI AG (Q2 2019 Earnings Release)
Fair to say it’s been a fairly dismal 2019 so far for tourism group TUI. A profit warning in February was followed by the news in March that the company’s 737 MAX aircraft had been grounded and would probably reduce earnings by at least €200mn if flights resumed by mid-July. The market will be looking in these interim results for an update on that situation and also interested to see if there are signs of a fall away in UK demand for summer holidays due to the Brexit uncertainty. TUI’s forecasts for full year earnings, which the market expects to fall by 20%, will be interesting given their implications for dividends.
We currently list TUI as a HOLD
Other companies reporting this day include: The British Land Co. Plc (Q4 2019 Earnings Release) – HOLD, Compass Group Plc (Q2 2019 Earnings Release) – BUY, Hargreaves Lansdown Plc (Interim Management Statement) – HOLD, Marston's Plc (Q2 2019 Earnings Release) – BUY, Spirax-Sarco (Trading update) – HOLD
Burberry Group Plc (Q4 2019 Earnings Release)
Slowing global growth has had its impact on the group’s sales, more specifically sapping confidence among key Chinese consumers. Store closures will also hit sales making the numbers from online and app sales all the more important. It will also be a crucial indicator, although still at the early stages, of whether the new management and the new chief creative officers design strategies are transferring to increased interest among the wealthy fashion conscious. Cost control has also become a focus rather than store expansion and investors will also want updates of the integration of recent acquisitions.
We currently list Burberry as a HOLD
National Grid Plc (Q4 2019 Earnings Release)
Income seekers have long been attracted to the stock, but the sector has been under pressure from politicians and regulators, which has led to an increase in share price volatility. Investor focus may be on the US operations, where management has focussed on improving the returns. Other areas of interest will be costs and any news on its recent expansion into wind power in the US.
We currently list National Grid as a BUY
Other companies reporting this day include: Hill & Smith Holdings (Q1 2019 Sales and Revenue Release) – BUY, Wincanton (Q4 2019 Earnings Release) - BUY
easyJet Plc (Q2 2019 Earnings Release)
The budget airline’s last update in April was rather gloomy for investors as it spoke of weaker customer demand and forecast a first half loss of £275mn thanks partly to a steep rise in fuel costs. While the delay in the Brexit deadline may be a slight positive, it also means the uncertainty rolls on further and the company has already warned it is suffering from that to a degree. Investors will be keen to see if the company still expects revenue per seat to rise in the second half, after a 7.4% drop in the first half and flat earnings for the full year.
We currently list easyJet as a BUY
Other companies reporting this day include: Hikma Pharmaceuticals (Trading Update) – BUY
Next week will be relatively light in terms of UK economic data releases; we have the latest set of jobs figures for March and April. Not many economists are expecting much of a change in the unemployment rate, which has stuck at a rather low level of 3.9% recently, but this low rate seems to be slowly transferring into higher wage growth lately which for February stood at 3.5%, comfortably higher than the rate of inflation. As Brexit talks resume in parliament, all sides will no doubt use their own interpretation of the data as to how resilient or affected the UK economy has been.
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