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PREVIEW: Qinetiq Group margins in focus on Thursday

Qinetiq Group, Tate & Lyle and Legal & General are set to be among the announcements on Thursday.

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Talk will be about QQ's margins, Canaccord says

Given the 10% rise in QinetiQ Group Plc’s (LON:QQ.) share price in the past month there’s likely to be close attention on its results, even though brokers expect them to be simply ‘in line’.

Anthony Plom, analyst at Canaccord Genuity, is expecting the discussion to be around the headwinds for the defence engineer’s margins.

“Although QinetiQ's strong track record and relationship with the MoD will prove supportive, we expect margins to decline 150bps over the next three years,” he said in a note.

“We are confident therefore that QinetiQ will seek to grow its top line and expect the biggest catalyst in the stock to be the use of its £219m net cash.”

Plom noted that QQ shares price in a slight premium, but that it doesn’t the strength of QinetiQ's balance sheet. Investment plans could provide a catalyst for the shares, he added.

Tate & Lyle Plc (LON:TATE) foreign exchange issues under spotlight

Numis analyst Charles Pick highlighted that last month’s pre-close updated confirmed a trading performance was consistent with the third quarter update, in February. He noted, however, that foreign exchange rates would be a factor.

“Profit before tax (FBT) from continuing operations will have progressed year-on-year vs the £184mln recorded for FY 14/15 and compiled at an average £/$ rate of 1.61.

“However, as was detailed at the Q3 stage, PBT last FY would be lower if the FY 14/15 result were rebased using last FY’s average rate of 1.51 (in which event it would have been £193m).”

“This PBT decline at constant fx being a function of a) the adverse impact of some other currencies in FY 15/16 (notably the Brazilian Real and Mexican Peso), plus b) knock-on effects at the Bulk Ingredients’ Commodities BU from weak US ethanol prices.”

Pick added that its forecast that the dividend of 28p would be maintained.

Legal & General Group Plc (LON:LGEN): Another day, another AGM and talk of executive pay

Executive pay has been the recurring theme through the blue-chip AGM season, and on Thursday insurer Legal & General will be the next one under scrutiny.

Attentions may well be heightened for L&G following the revelation that the company made a mistake in reporting the pay of Nigel Wilson, chief executive, due to a mix up over options vesting.

Once corrected, the figures show Wilson was paid £5.5mln not £4.7mln as reported in March.

Announcements

Full year - QinetiQ Group (LON:QQ.), Tate & Lyle (LON:TATE), Pets at Home Group (LON:PETS),

Half/ quarterly - Daily Mail & General Trust PLC (LON:DMGT)

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