Sheridan Admans, investment research manager at The Share Centre, gives his thoughts on what to expect from companies announcing results week commencing 15 June 2015
Ashtead (Full year results)
These figures will attract a fair amount of investor interest following some downbeat comments from US rival United Rentals in late May about the level of activity it experienced during that month. That came as a surprise to the market but may be specific to that company. Ashtead, which generates a large proportion of its sales in the US, published a very upbeat Q3 trading statement in March, in which it reported a record level of pre-tax profit for the first nine months and forecast full year figures ahead of its previous expectations. The performance of the UK operations will also be of interest to investors, as will the level of debt following a period of investment by the group in new equipment.
We currently list Ashtead as a BUY
Whitbread (Q1 trading update)
Whitbread’s shares have fallen back since it reported excellent full year results in late April. Given the robust level of general retail sales activity as well as rising levels of disposable incomes, the market will be keen to hear if trading at the group’s Costa Coffee and Premier Inn chains remains strong. The surprise news regarding the departure of chief executive Andy Harrison in April was followed by the equally surprising appointment of retail banker Alison Brittain as his replacement. She is not due to start until next January but any comments about that will also be of interest to investors.
We currently list Whitbread as a HOLD
Berkeley Group (Full year results)
In its previous trading update, housebuilding group Berkeley reported good demand but also forecast that activity in the housing sector generally would return to more normal levels this year. As a result investors will be watching out for any signs of that in these results. Given the general election outcome, investors will also be interested in any comments on what effect government policy may have on the sector. Berkeley is in the middle of a substantial capital repayment plan to shareholders so income-seeking investors will be keen to hear if the expected 90p payment in September is now confirmed. Any other news on future payments will also be welcomed.
We currently list Berkeley Group as a BUY
Findel (Full year results)
The shares fell away after the last trading update at the end of March, following the company’s revised profit guidance for the year. The market consensus now is for pre-tax earnings to rise by 20% to £26.4m with a further 15% increase pencilled in for 2015/16. The Express Gifts division has been the main driver of growth recently so any comments about its prospects will attract attention. As will news about the struggling Educational Supplies division and Kitbag.com, the sports retail site which Findel has now decided to continue with after a review.
We currently list Findel as a BUY
Keller (Q2 update)
The shares have made good progress from recent lows in October, helped by confidence in the US housing market and good prospects for global infrastructure spending projects. Investors should note that a general view that the new Conservative government in the UK will be pro-development also helps. However, certain regions such as Europe could still show meagre growth rates. Investors will be expecting their US order book to build in size however, sterling’s appreciation in recent months will likely hurt overseas earnings.
We currently list Keller as a BUY
Announcements for the w/c 15 June
Minutes of the Monetary Policy Committee Meeting ending 3 June 2015 – Bank of England:
Last month’s minutes of the MPC suggested that two members were close to voting for a rate rise. Was June the month when they finally went against the majority voting for the Bank of England to increase interest rates?
Consumer price indices: May 2015 – ONS:
Last month UK inflation was minus 0.1%. The annual inflation rate comprises 12 sets of month on month inflation rates, and on this occasion the data for May 2014 falls out of the annual inflation equation. The data for May 2015 replaces it. In May 2014, month on month inflation was minus 0.1 per cent, so for the annual rate to fall any further, May 2015 would have to have seen unusually sharp falls in prices relative to the month before.
Labour market statistics: three months to April 2015 – ONS:
In the three months to March, UK employment rose by 202,000 relative to the previous three month period. Unemployment fell to 5.5%, but the quarterly fall in unemployment was just 35,000, which was the smallest drop since the summer of 2013. Average wages, including bonuses, rose by 1.9% suggesting that real wages rose at their fastest rate this decade. Given that inflation was negative in April, there is a good chance that real wages rose at an even faster rate in the three months to April.
Other economic announcements include:
• UK house price index, April 2015 – ONS
• Producer price index, May 2015 – ONS
• EU Inflation, HICP, May – Eurostat
• FOMC Meeting – US Fed
• Retail sales: May 2015 – ONS
• Public sector finances: May 2015 – ONS