What to expect from companies announcing results week commencing 6 May 2019.
Companies reporting w/c 6 May
The Share Centre gives its thoughts on what to expect from companies announcing results week commencing 6 May 2019.
Direct Line (Trading Update)
Political uncertainty casts a shadow over the full-year results in March as the company opted to increase its capital reserves and lower its dividend pay out to shareholders. Brexit was one of the reasons cited for keeping the solvency capital ratio at the upper end of the 140-180% range given previously. In this first quarter update investors will be looking to see if gross written premiums are still falling and whether the combined operating ratio, a commonly used measure of profitability among insurers, is once again heading in the right direction after deteriorating last year. Any further news on the plan to launch new brand Darwin on price comparison websites will also be of interest.
We currently list Direct Line as a HOLD
ITV (Q1 2019 Sales and Revenue Release)
The shares have continued to be rather lacklustre this year despite news that the company plans to launch a streaming service in conjunction with the BBC. That is due to begin later this year and is recognition the media landscape is changing quite rapidly at present given that Apple has set up its own TV service and Disney has launched a streaming service to compete with Netflix. In this first quarter update investors will be most interested in the level of revenue from advertising, which is forecast to drop by 3-4%, and also that from the studios business.
We currently list ITV as a HOLD
Imperial Brands (Interims)
Like all of its peers Imperial has to cope with increasing levels of regulation and restrictions on tobacco products around the world. Part of its strategy for managing this is to develop vaping products and investors will be looking at how sales of those are performing in these interim results. Imperial has previously said that it expects revenues of £250m-£1.5bn from its blu vaping brand by 2020. Another part of the strategy is to sell non-core parts of the group and the latest move is to offer up the premium cigar business, which owns a 50% stake in the Cuban national cigar export company. The market is expecting another 10% rise in the dividend this year.
We currently list Imperial Brands as a BUY
Mondi (Q1 2019 Sales and Revenue Release)
Despite being a FTSE 100 company the paper and packaging group has a comparatively low profile. Analysts have been highlighting lower containerboard prices which could hit earnings in the sector over 2019. This has been reflected in the share price performance year to date. Other areas to focus on will be cost pressures, profit margins, maintenance on its mills and the group’s outlook for the year ahead.
We currently list Mondi as a BUY
Morrison Supermarkets (Q1 2020 Sales and Revenue Release)
Morrison’s market share continues to fall with recent industry figures showing it currently standing at 10.3%. There is unlikely to be anything dramatic in its first quarter numbers, with investors hoping that the milder weather so far this to have helped sales especially when compared to last year and the 'Beast from the East'.
We currently list Morrisons as a HOLD
BT Group (Q4 2018 Earnings Release)
The telecoms giant has performed better than expected over the past six months but the shares have yet to respond, underperforming the market over that period. Third quarter figures in January showed both revenues and earnings easing down slightly although the consumer business continued to see good growth. In these full-year figures the market will be watching to see if that key part of the business remains strong, and is expecting operating profits of around £7.4bn. Any update on the progress of the 5G roll-out so far will also be of interest, but more critical for investors will be the dividend and any comments on future expectations for that.
We currently list BT as a HOLD
Other companies reporting this day include: Barratt Developments (Q3 2019 Sales and Revenue Release) – HOLD, RSA Insurance (Trading update) - HOLD
International Consolidated Airlines Group (Q1 2019 Earnings Release)
These are certainly interesting times for airlines with all the uncertainty around Brexit, the global economy and the sharp rise in the oil price so far this year which is naturally raising concerns about fuel costs for airlines. The market will be looking for any information on that last subject in these first quarter figures, along with an update on where the company sees full-year earnings. The guidance for 2019 given in February was better than expected although hardly scintillating as the company said overall profits were forecast to remain at the same level as the Eur3.2bn seen last year.
We currently list International Consolidated Airlines Group as a BUY
Next week the most anticipated announcement will come from the US on Friday when the latest inflation figures will be released. Analysts expect 2.1% annual price increase compared to 1.9% in the previous month.
Meanwhile, back in the UK, the latest GDP figures will also be announced on Friday. It is expected the economy will have grown at the same rate as the previous release in April at about 0.2% month-on-month.
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.