Week ahead: BHP and Persimmon results in focus
Next week offers a true August holiday break in terms of macroeconomic data and central bank machinations, while there are some key results worth watching out for, including BHP Billiton and Persimmon.
Last month BHP agreed to sell its US shale assets to BP for $10.8bn and it also delivered better than expected fourth-quarter production and reiterated full year cost guidance, ahead of this coming Tuesday's final results.
Deutsche Bank said was an encouraging finish to the year following disappointing operational performance in H1 and industry inflationary pressures. Full year production guidance for iron ore was below analysts' estimate but the target to exit FY19 at 290m tonnes per annum remained unchanged. For FY18 Deutsche forecasts EBITDA of $24.3bn, net debt of $11.7bn and free cash flow of $12bn.
As well as selling its oil assets, a combination of improved production and higher prices are boosting revenues, which means BHP is awash with money, observed broker Hargreaves Lansdown, wondering what will directors do with all that loose cash.
"Some $10bn is already earmarked for return to shareholders – although in exactly what form remains to be seen – and in the past BHP has been willing to pay dividends that are far more generous than its stated 50% of earnings per share."
The other issue on investors minds is whether BHP should continue to be listed in both the UK and Australia. Activist investor Elliott Advisors has been pushing for a single Australian listing. BHP has so far rejected its calls but Hargreaves hoped to hear more details.
Looking at Persimmon, the shares have subsided badly since its half year update in early June. Revenues rose 5% to £1.84bn, helping solidify the housebuilder's position as the UK’s second largest housebuilder, but business was seen to be slowing.
Revenue rose 5% to £1.84bn in the six months to the end of June as completed sales increased 3.6% to 8,072 homes and the average selling price rose 1.2% to £215,000. A year ago revenue was up 12%, completions were up 8%, and the average selling price had risen 3.5%.
Persimmon said potential buyers of its homes remained confident and that customer enquiries were up 6%. At the end of June forward sales of new homes were 5% higher than a year ago at £1.68bn.
Investors will be wondering to see if the Bank of England's decision to raise interest rates at the beginning of August has impacted Persimmon’s selling power.
Mortgage approval rates for July showed another month of growth, Hargreaves noted, an indicator that the first time buyers Persimmon relies heavily on are continuing to find their way onto the property ladder.
"July’s results preview painted a bright enough picture, and we’ll be looking for further reassurance this time around."
Monday August 20
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Producer Price Index (GER) (07:00)
INTERIMS
Georgia Capital , NMC Health, Polymetal International, TBC Bank Group
EGMS
Public Joint Stock Company Severstal GDR (Reg S)
AGMS
Acorn Income Fund Ld, Northern Bear
Tuesday August 21
UK ECONOMIC ANNOUNCEMENTS
CBI Industrial Trends Surveys (11:00)
Public Sector Net Borrowing (09:30)
FINALS
BHP Billiton
INTERIMS
Charter Court Financial Services Group , Empiric Student Property , Hostelworld Group , Persimmon, Wood Group (John)
INTERIM DIVIDEND PAYMENT DATE
Dewhurst
QUARTERLY PAYMENT DATE
Supermarket Income Reit
GMS
Micro Focus International
ANNUAL REPORT
Renishaw
AGMS
Albion Enterprise VCT, Henderson Diversified Income Ltd.
FINAL DIVIDEND PAYMENT DATE
Gabelli Value Plus Trust
Wednesday August 22
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Crude Oil Inventories (US) (15:30)
Existing Home Sales (US) (15:00)
MBA Mortgage Applications (US) (12:00)
INTERIMS
Avast, Costain Group, Empresaria Group, Foresight Solar Fund Limited, Grafton Group Units, Hansteen Holdings, Headlam Group
TRADING ANNOUNCEMENTS
Proactis Holdings, Venture Life Group
GMS
Foresight Solar Fund Limited, Rightmove
AGMS
Collagen Solutions, Downing One VCT , Latham (James), Paragon Entertainment Ltd (DI), Puma VCT 10
QUARTERLY PAYMENT DATE
Merchants Trust
FINAL DIVIDEND PAYMENT DATE
Vedanta Resources
Thursday August 23
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Continuing Claims (US) (13:30)
House Price Index (US) (14:00)
Initial Jobless Claims (US) (13:30)
New Homes Sales (US) (15:00)
UK ECONOMIC ANNOUNCEMENTS
CBI Distributive Trades Surveys (11:00)
FINALS
Arcontech Group
INTERIMS
Anglo Pacific Group, Bank of Cyprus Holdings Public Limited Company, CRH, John Laing Group , Macfarlane Group, OneSavings Bank, Phoenix Group Holdings (DI), Playtech, Premier Oil, Sportech
Q2
MHP SE GDR (Reg S)
SPECIAL EX-DIVIDEND DATE
Quilter
AGMS
D4T4 Solutions, The Fulham Shore, The Fulham Shore
FINAL EX-DIVIDEND DATE
Cohort, Dixons Carphone , First Property Group, JPMorgan Brazil Inv Trust , Miton UK Microcap Trust, Park Group, Ramsdens Holdings , Stagecoach Group, Triad Group
INTERIM EX-DIVIDEND DATE
Apax Global Alpha Limited , Baronsmead Second Venture Trust, Baronsmead Venture Trust, CLS Holdings, Croda International, Devro, FDM Group (Holdings), Ferrexpo, Franchise Brands, Glanbia, Hikma Pharmaceuticals, Jardine Lloyd Thompson Group, London Stock Exchange Group, Marshall Motor Holdings, Mithras Inv Trust, Mobeus Income & Growth Vct, Mondi, Paddy Power Betfair, Plus500 Ltd (DI), Prudential, Rotork, Royal Bank of Scotland Group, Sabre Insurance Group
QUARTERLY PAYMENT DATE
BlackRock Latin American Inv Trust, Fair Oaks Income Limited 2014 Shs NPV, Fair Oaks Income Limited 2017 Shs NPV, M Winkworth
QUARTERLY EX-DIVIDEND DATE
Blackrock North American Income Trust , Carnival, HICL Infrastructure Company Ltd, NextEnergy Solar Fund Limited Red, Premier Global Infrastructure Trust, Real Estate Credit Investments Ltd
Friday August 24
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Durable Goods Orders (US) (13:30)
Gross Domestic Product (GER) (07:00)
UK ECONOMIC ANNOUNCEMENTS
BBA Mortgage Lending Figures (09:30)
FINALS
Byotrol
INTERIMS
Computacenter, Henry Boot, Kingspan Group
INTERIM DIVIDEND PAYMENT DATE
Independent Inv Trust, Microgen, Octopus Titan VCT
QUARTERLY PAYMENT DATE
APQ Global Limited, Primary Health Properties, Tetragon Financial Group Limited
SPECIAL DIVIDEND PAYMENT DATE
Artemis Alpha Trust
EGMS
Infrastructure India, PJSC Lukoil ADR
AGMS
Naspers Ltd. ADR
FINAL DIVIDEND PAYMENT DATE
Bloomsbury Publishing, CMC Markets, Downing One VCT , GB Group, Latham (James), Micro Focus International