Week ahead: London's summer results season kicks off
Next week sees the results season kick off for London-listed stocks, with the likes of media and tech stocks BT, ITV, Pearson and Vodafone, defensive favourites AstraZeneca, BATS, Diageo and GlaxoSmithKline
In macroeconomic news, Thursday's European Central Bank meeting would usually be the main event. It has been rendered less important by the last meeting, however, where ECB President Mario Draghi announced the end of the central bank's asset purchase programme at the end of this year, although interest rates will remain at their current levels through the summer of 2019, at least.
"A by-product of that is that upcoming meetings, starting with this month’s, are likely to be relatively low-key affairs," said RBC Capital Markets. "It’s very early days but, so far, the economic data are largely in line with the latest set of ECB staff projections which should allow President Draghi to express some satisfaction that things are proceeding as the ECB expected when it made that announcement, even if trade war threats are likely to loom large in its thinking."
Since the last meeting, a number of ‘ECB sources’ stories have emerged on how the ECB will conduct reinvestments and RBC's economists said the main interest for markets in the near term will be on "whether or not the ECB will give any further details on how its reinvestment strategy will work".
The principal economic data points through the week include eurozone consumer confidence and US existing home sales on Monday; then eurozone flash PMIs surveys and UK CBI Industrial Trends on Tuesday; Wednesday sees Germany's IFO survey and a UK retail survey from the CBI, plus US new home sales; Thursday's US durable goods; and finishing the week with UK Nationwide house prices, US gross domestic product and the University of Michigan sentiment index.
LONDON REPORTING SEASON
UK results season kicks in, with a tumult of FTSE 350 companies posting results or quarterly trading updates, starting with a quiet Monday as Ascential, Paragon Banking, Petra Diamonds, Ryanair and SThree report, with Tuesday only a little busier as Britvic, Drax, IG Group, Fevertree, Hammerson, PZ Cussons, Spectris and Unite report; with things properly kicking off on Wednesday as we welcome updates from 3i Group, Antofagasta, Brewin Dolphin, CapCo, Croda, Fresnillo, GlaxoSmithKline, Indivior, Informa, IP Group, ITV, Marston's, Metro Bank, Pearson, Primary Health Properties, QinetiQ, Rathbone Brothers, Staffline Group, Tullow Oil, Victrex, Vodafone and Wizz Air.
As is often the case, Thursday is the busiest, with finals from Diageo, Renishaw and Sky, interims from Anglo American, AstraZeneca, Bodycote, BAT, Countrywide, Howden Joinery, Inchcape, Intu Properties, Jardine Lloyd Thompson, Lancashire, Morgan Advanced Materials, National Express, Relx, Shell, Schroders, SEGRO, Smith & Nephew, UBM, Vesuvius and Virgin Money, not to mention trading updates from Aveva, CMC Markets, Compass, Countryside Properties, DMGT, Evraz, Intermediate Capital, Kaz, PayPoint, Polymetal, Sophos Group and Tate & Lyle. After that deluge, Friday ends in relatively becalmed fashion with the likes of BT, CYBG, Equiniti, Greencoat UK Wind, Jupiter Fund Management, Reckitt Benckiser and Rightmove.
Picking out a few of those, Vodafone and BT investors will be seeking reassurance from the first-quarter figures after the announcement of a change at the top caused differing reactions, with VOD shares down around a quarter since the start of the year and BT's looking for a similar slide until rallying a little as CEO Gavin Patterson got the heave-ho.
AstraZeneca and Diageo meanwhile are trading around all-time highs and could push on or be knocked off their perches by these numbers.
Deutsche Bank analysts like the look of AstraZeneca even if they expect it to report a further modest decline of around 2% in product sales at in the second quarter, with core EPS to be down roughly 19% year-on-year given investments behind new launches. However, industry data continues to supports strong performance of the new drug portfolio "and we expect product sales growth to accelerate through 2018 as launches gain momentum. We expect guidance to be reiterated." On Diageo they expect the full year results to confirm "good momentum" in the business and "see some potential upside to consensus on organic sales and EBIT, but we don’t expect new announcements on cost savings, on the medium term margin target or on size of share buy-back".
On Reckitt Benckiser, analysts at Hargreaves Lansdown said investors' expectations for the half year numbers were dampened by a fairly disappointing set of full year results and further disappointments in the April update, but the hope is that management will not reduce their guidance for the full year’s revenues of between 2-3%. "However, currency tailwinds turning into headwinds will make this task more difficult. Investors will expect a progress report on the preparations to split the group into two separate divisions, Health and Hygiene and an update on the integration of the Mead Johnson acquisition." HL also looked at Pearson, which delivered a better performance in its first quarter results, but is not out of the woods just yet, with a declining market for higher education textbooks needing to be offset by boss John Fallon's strategic shift towards providing the next generation of educational resource.
For ITV, the market is expecting to hear good news about the impact of the Fifa World Cup on TV ad sales, with broker Shore Capital hoping to see confirmation that this momentum has been maintained or possibly accelerated since the first quarter. More importantly, analysts look forward to hearing the conclusions of McCall’s “strategic refresh” – and particularly how she plans to accelerate growth in digital and content revenues both organically and through acquisitions.
UBS previewed British American Tobacco, forecasting a 4.1% volume decline due to more challenging trading conditions in several market. "However on an underlying basis we believe BAT continues to gain market share (+30-40bps). We forecast H1 margins +44bps with the benefits of price/mix and cost savings part offset by investments in Next-Generation Product's...We expect sequentially stronger H2 volume performance with FY18 volumes down -2.5% and price/mix of +5.8%. We forecast +47bps progression on constant currency basis or +53bps on reported basis."
While Britvic has faced headwinds including the UK CO2 shortage, sugar tax in UK and Ireland and disruptions caused by strikes in Brazil, UBS forecast third-quarter net sales up 9.1%. "On divisional level we expect strong growth in GB stills to be part offset by weaker trends in GB carbonates (CO2 disruption), France and Brazil...Despite numerous headwinds we expect Britvic reiterate that it is happy with consensus for FY18."
Monday July 23
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Existing Home Sales (US) (15:00)
FINALS
SRT Marine Systems, Tungsten Corporation
INTERIMS
Ascential, McColl's Retail Group, Microgen, SThree
TRADING ANNOUNCEMENTS
JTC, Paragon Banking Group, Petra Diamonds Ltd.(DI), Ryanair Holdings
ANNUAL REPORT
SRT Marine Systems
SPECIAL DIVIDEND PAYMENT DATE
Plus500 Ltd (DI)
AGMS
Active Energy Group, B.S.D Crown Ltd (DI), Castleton Technology, Ethernity Networks Ltd, Global Resources Investment Trust
FINAL DIVIDEND PAYMENT DATE
Mission Marketing Group, Plus500 Ltd (DI)
Tuesday July 24
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
House Price Index (US) (14:00)
UK ECONOMIC ANNOUNCEMENTS
CBI Industrial Trends Surveys (11:00)
FINALS
Highlands Natural Resources, IG Group Holdings, PZ Cussons, The Fulham Shore, Victoria
INTERIMS
Centaur Media, Drax Group, Fevertree Drinks, Gresham Technologies, Hammerson, Huntsworth, Proteome Sciences, Science Group , Spectris, Unite Group
TRADING ANNOUNCEMENTS
Britvic
ANNUAL REPORT
1Spatial
IMSS
Wizz Air Holdings
AGMS
Bluerock Diamonds, Chariot Oil & Gas Ltd., Chariot Oil & Gas Ltd., Charles Stanley Group, EPE Special Opportunities, Eurasia Mining, Fuller Smith & Turner, Gresham House Strategic , Halfords Group, Motorpoint Group, TR Property Inv Trust, Wizz Air Holdings
FINAL DIVIDEND PAYMENT DATE
Coca-Cola HBC AG (CDI), Edinburgh Inv Trust, MS International
Wednesday July 25
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Crude Oil Inventories (US) (15:30)
IFO Business Climate (GER) (09:00)
IFO Current Assessment (GER) (09:00)
IFO Expectations (GER) (09:00)
M3 Money Supply (EU) (09:00)
MBA Mortgage Applications (US) (12:00)
New Homes Sales (US) (15:00)
UK ECONOMIC ANNOUNCEMENTS
BBA Mortgage Lending Figures (09:30)
CBI Distributive Trades Surveys (11:00)
FINALS
Angle, Joules Group
INTERIMS
Burford Capital , Capital & Counties Properties , Croda International, GlaxoSmithKline, IDOX, Indivior, Informa, International Personal Finance, IP Group, ITV, Metro Bank, Primary Health Properties, Quartix Holdings , Rathbone Brothers, Staffline Group, Tullow Oil, Tyman
TRADING ANNOUNCEMENTS
3i Group, Antofagasta, Brewin Dolphin Holdings, Empresaria Group, GlaxoSmithKline, Marston's, QinetiQ Group, Victrex plc, Vodafone Group, Wizz Air Holdings
DRILLING REPORT
Antofagasta, Fresnillo
AGMS
Advanced Oncotherapy, Circle Property , Clear Leisure, Connemara Mining Co, Cropper (James), Mediclinic International , Norcros, Palace Capital , Petrel Resources, Polar Capital Holdings, QinetiQ Group, QinetiQ Group, Richland Resources Ltd, System1 Group, Trifast, ULS Technology , Vertu Motors
FINAL DIVIDEND PAYMENT DATE
Electrocomponents, Gama Aviation , Trans-Siberian Gold
QUARTERLY PAYMENT DATE
General Electric Co
Thursday July 26
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Continuing Claims (US) (13:30)
ECB Interest Rate (EU) (12:45)
GFK Consumer Confidence (GER) (07:00)
Gross Domestic Product (US) (13:30)
Initial Jobless Claims (US) (13:30)
FINALS
Diageo, Renishaw, Sky
INTERIMS
Anglo American, AstraZeneca, Bodycote, British American Tobacco, Countrywide, Franchise Brands, GKN, Howden Joinery Group, Impellam Group, Inchcape, Intu Properties, Jardine Lloyd Thompson Group, Lancashire Holdings Limited, Law Debenture Corp., Mail.ru Group Ltd GDR (Reg S), Morgan Advanced Materials , National Express Group, Relx plc, Robert Walters, Royal Dutch Shell 'A', Royal Dutch Shell 'B', Schroders, SEGRO, Smith & Nephew, Tarsus Group, Telefonica SA, UBM, Vesuvius, Virgin Money Holdings (UK)
TRADING ANNOUNCEMENTS
Aveva Group, AstraZeneca, CMC Markets, Compass Group, Compass Group, Countryside Properties, Daily Mail and General Trust A (Non.V), Discoverie Group, Evraz, Intermediate Capital Group, Lancashire Holdings Limited, PayPoint, Royal Dutch Shell 'A', Royal Dutch Shell 'B', Smith & Nephew, Sophos Group
GMS
Discoverie Group
DRILLING REPORT
Kaz Minerals, Polymetal International
SPECIAL DIVIDEND PAYMENT DATE
EIH Plc
SPECIAL EX-DIVIDEND DATE
LXB Retail Properties, M Winkworth
EGMS
MHP SE GDR (Reg S)
AGMS
Avocet Mining, Bonmarche Holdings, CMC Markets, De La Rue, Discoverie Group, EIH Plc, Evgen Pharma, Findel, Immunodiagnostic Systems Holdings, Intermediate Capital Group, Johnson Matthey, PayPoint, Record, Tate & Lyle, Telecom Plus, Triple Point Income VCT, Two Shields Investments , Two Shields Investments , Weiss Korea Opportunity Fund Ltd
FINAL DIVIDEND PAYMENT DATE
Calculus VCT , Fuller Smith & Turner, Mckay Securities, System1 Group, Triple Point Income VCT, Triple Point Income VCT C, Triple Point Income VCT D
FINAL EX-DIVIDEND DATE
Bilby, Bloomsbury Publishing, Blue Planet Investment Trust, Halfords Group, Investec, Royal Mail, SSE
INTERIM EX-DIVIDEND DATE
Blackrock Income And Growth Investment Trust, Nichols, Porvair, Sanderson Group, Stenprop Limited
QUARTERLY PAYMENT DATE
Fair Oaks Income Limited 2014 Shs NPV, Fair Oaks Income Limited 2017 Shs NPV
QUARTERLY EX-DIVIDEND DATE
APQ Global Limited, City of London Inv Trust, Custodian Reit , M Winkworth, Supermarket Income Reit
Friday July 27
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
GDP (Preliminary) (US) (13:30)
Personal Consumption Expenditures (US) (13:30)
U. of Michigan Confidence (US) (15:00)
UK ECONOMIC ANNOUNCEMENTS
Nationwide House Price Index (07:00)
FINALS
Premier African Minerals Ltd
INTERIMS
Equiniti Group , Greencoat UK Wind, Hutchison China Meditech Ltd, Jardine Matheson Holdings Ltd (Singapore Reg), Jardine Strategic Holdings Ltd. (Singapore), Jupiter Fund Management , Reckitt Benckiser Group, Rightmove, UK Mail Group
TRADING ANNOUNCEMENTS
BBVA S.A., CYBG
GMS
Bank Audi S.A.L. GDR (Repr 1'Com'Shr Lbp1650)(Reg S)
ANNUAL REPORT
Premier African Minerals Ltd
SPECIAL DIVIDEND PAYMENT DATE
Bisichi Mining
EGMS
Bank Audi S.A.L. GDR (Repr 1'Com'Shr Lbp1650)(Reg S)
AGMS
Arricano Real Estate (DI), Emmerson, Gear4music (Holdings), Hansa Trust, MobilityOne Ltd., MobilityOne Ltd., Nature Group, Polemos, Powerhouse Energy Group, Redt Energy , United Utilities Group
FINAL DIVIDEND PAYMENT DATE
Anpario, Biffa, Big Yellow Group, Bisichi Mining, Braemar Shipping Services, Montanaro UK Smaller Companies Inv Trust, Morses Club , Nex Group , Prime People, Renewi , Scisys, Steppe Cement Ltd, Vianet Group
INTERIM DIVIDEND PAYMENT DATE
Character Group, Dunedin Smaller Companies Inv Trust, Gooch & Housego, Paragon Banking Group, Up Global Sourcing Holdings
QUARTERLY PAYMENT DATE
Aberdeen Diversified Income and Growth Trust , Brunner Inv Trust, Land Securities Group, Real Estate Investors, Standard Life Private Equity Trust, Value and Income Trust