Sheridan Admans, investment research manager at The Share Centre, gives his thoughts on what to expect from companies announcing results w/c 25 February 2013.
Associated British Foods (trading statement)
Investors will be looking for the impressive results from Primark that they have got used to seeing. Lower profits from its sugar operation are expected in 2013 due to lower EU production targets and higher beet costs.
Given higher agriculture and commodity costs and the strain on consumer spending, investors should expect performance in its grocery and ingredients operation to see pressures on the segment’s profit margin. This could be offset by the turnaround of its AG Agri operation.
We currently list Associated British Foods as a BUY
Companies reporting today include Bunzl (Q4 results) – BUY, Pearson (Q4 results) – HOLD
Croda International (Q4 results)
Market expectations appear to have been rising for Croda’s Q4 results. Investors will be hoping for a more confident update after the slight slowing in the November announcement, combined with comments from the CEO regarding volatile trading conditions.
With a significant part of its sales coming from Europe, the push into emerging markets is important for the group to continue on its strong growth path, so investors will be keen to see evidence of this.
We currently list Croda International as a HOLD
GKN (full year results)
As the demand for new car sales waned globally in 2012 and slowed to an eight year low in China, investors will be looking for signs that GKN’s aerospace and land systems divisions are picking up the slack.
On a positive note investors should see GKN’s land system operations benefit from agricultural demand in the U.S and European markets.
Looking ahead GKN could see some pick up in 2013 as demand in China may also improve; the region is the second biggest market for GKN products.
We currently list GKN as a HOLD
Companies reporting today include CRH (Q4 results) – HOLD, Inmarsat (Q4 results) – BUY
ITV (Q4 results)
ITV’s share price recently hit a five year high on the back of vague bid speculation and continued signs of improving advertising rates, especially for the first three months of 2013. There has been growing pressure for the company to return cash to investors so an announcement of a share buyback is expected in this update. Updates on the studio business which has been an important part of the recovery process for ITV, will also be worth noting.
We currently list ITV as a BUY
Petrofac (Q4 results)
Shares in the sector have experienced a little dip lately as an Italian company issued a major profits warning, however Petrofac’s portfolio remains profitable and orders remain strong, with the likelihood of further contract awards. Investors will be looking for indicators from management of any possible weakness in the sector as well as progress reports on the various projects and contracts.
We currently list Petrofac as a BUY
Companies reporting today include Carillion (Q4 results) – HOLD, Capital Shopping Centres (Q4 results) – HOLD, Weir Group (Q4 results) – HOLD, Centrica (Q4 results) – BUY
Spirent (full year results)
The evolution of technology in the telecoms sector is likely to be a continuous source of growth for the company with further benefits from 4G offerings and the increasing use of mobile computing and smartphones. However investors will be looking for further negative comments related to spending within the telecoms industry lately and the outlook for 2013. Conditions in Q3 were difficult and so investors will look to see if this has continued into the final quarter.
We currently list Spirent as a BUY
27 February, Second Estimate of GDP, Q4 2012 – ONS
According to early estimates of UK GDP the UK economy contracted by 0.3% in the final quarter of 2012. With employment rising, some economists have questioned the accuracy of the ONS data, and have argued that the UK’s output is not contracting as severely as the ONS stats suggest. Will today’s second estimate confirm the earlier findings, be revised upwards, or be revised downwards?
1 March, Purchasing Managers’ Index for UK manufacturing – Markit/CIPS
Last month the Purchasing Managers’ Index for UK manufacturing fell slightly from December’s 15 month high of 51.2, to 50.8. The index was consistent with the fastest rate of expansion in manufacturing output since September 2011. Did the index for February remain above the critical 50 no change level?
Other economic announcements include:
- Quarterly Distributive Trades Survey – CBI
- US Consumer Confidence, February – Conference Board
- GDP and the Labour Market, 2012 Q4, February GDP Update – ONS
- Business Investment, Q4 2012 (provisional results) – ONS
- Index of Services, December 2012 – ONS
- US Gross Domestic Product (Prelim) – BEA
- EU Inflation, January, (HICP) – Eurostat
- Patterns of Pay, 1997 to 2012, ASHE Results – ONS
- Purchasing Managers’ Indices for manufacturing across the world, including Markit for Euro area, ISM for US and Markit/HSBC for China
- US Personal Income, January – BEA
- Sectoral breakdown of aggregate M4 and M4 lending, January 2013 – Bank of England
- Lending to Individuals, January 2013 – Bank of England
- Flash Estimate Euro area inflation, February – Eurostat
- EU unemployment, January – Eurostat