Tuesday preview: WPP interims, Redrow finals, construction PMIs
Tuesday will see WPP's new boss unveil half-year results that some analysts think could be better than the market expects, while there's also finals from Redrow in a busy week for housebuilders.
As leaks emerge about a possible extension to Bank of England Governor Mark Carney's contract, the Canadian will have an extra line of questioning to field as he gives testimony to parliament's Treasury Select Committee.
UK data on the day also will include a construction PMI survey to follow a disappointing manufacturing one the day before. There's also a retail sales report from the BRC and the house price index from Halifax.
Overseas, Wall Street begins September after its Labor Day holiday break, while Australia's central bank is due to announce its latest decision on interest rates, with no change expected.
WPP will provide its half-year update a day after announcing that Mark Read will be its new permanent chief executive with immediate effect.
The advertising sector been an inconsistent recently as proved by WPP's rivals Omnicom and Publicis missing the mark with recent results, which may have tempered expectations ahead of its half year results. However, Interpublic delivered organic revenue growth well ahead of forecasts and raised its guidance for the full year and Vivendi's Havas delivered a better performance than the market expected too.
WPP's shares, having lost around a third of their all-time high from early 2017, are pretty much flat since the end of April, when Read was installed as a co-CEO with Andrew Scott after the acrimonious departure of former CEO Sir Martin Sorrell.
"Coming at the end of a quarter where the ad agency sector has delivered volatile organic growth, we think WPP will report a solid, unspectacular set of results, with broadly flat organic growth," predicted analysts at Deutsche Bank.
If anything, they saw a chance of upside with comparative figures from last year easing 250 basis points compared to the first quarter.
With the shares fall over the past 12 months the current valuation of the shares could see an in-line set of results "provide some modest upside for the shares".
Analysts expected Read's appointment the top role "should provide more stability than an outside appointment" and don’t expect any modifications to guidance or a marked change of strategy.
Full-year figures will also come from Redrow after its shares have fallen slightly more than the sector as a whole, which is down around 14% in 2018.
The results should continue to see the group performing well with a focus on growth certainly relative to the sector average, predicted broker Peel Hunt.
"The market will be watching for news on build costs versus house price inflation as well as how recent trading has been. One of the ongoing debates for the group is what sort of dividend growth it delivers as we are currently factoring in dividend cover of nearly 3x for FY19," analysts wrote.
Analysts at UBS expect 6.0% volume growth and +5.5% in average selling prices to £327,000, resulting in 12% revenue growth to £1.86bn, operating profit of £374m, PTP of £367m and EPS of 82p.
"Key incremental news will be trading since Feb-18 with private sales rates likely remaining at high levels of close to 0.70 sales per site per week. We expect FY20 targets to be confirmed and new FY21 targets to be announced."
Tuesday 04 September
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Auto Sales (US) (20:30)
Construction Spending (US) (15:00)
ISM Manufacturing (US) (15:00)
ISM Prices Paid (US) (15:00)
PMI Manufacturing (US) (14:45)
Producer Price Index (EU) (10:00)
UK ECONOMIC ANNOUNCEMENTS
PMI Construction (09:30)
FINALS
A&J Mucklow Group, Craneware, Mattioli Woods, Redrow
INTERIMS
Alfa Financial Software Holdings , Boku, Inc (DI) Reg S, Cairn Homes , Dalata Hotel Group, European Wealth Group Limited, Filta Group Holdings, Gulf Marine Services, Highland Gold Mining Ltd., India Capital Growth Fund Ltd., Inspired Energy, Johnson Service Group, Lighthouse Group, Michelmersh Brick Holdings, Porta Communications , Taptica International (DI), Telit Communications, WPP
TRADING ANNOUNCEMENTS
Halfords Group, McColl's Retail Group , Smith (DS)
AGMS
Bagir Group Ltd. (DI), Boxhill Technologies , Downing Four VCT DP67 , European Wealth Group Limited, Hargreaves Lansdown, Jupiter Green Inv Trust, Monks Inv Trust, Severfield, Smith (DS)
FINAL DIVIDEND PAYMENT DATE
Pennon Group
INTERIM DIVIDEND PAYMENT DATE
St. Modwen Properties
QUARTERLY EX-DIVIDEND DATE
Schlumberger Ltd.