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UK investors will have plenty of updates to chew over in the coming week as turkeys are prepared for US Thanksgiving

Aside from the inevitable Brexit drama, the Week Ahead will be dominated by another batch of corporate updates from the likes of Kingfisher, Centrica, easyJet, and Compass Group

Turkey
The US focus will be the Thanksgiving turkey, but UK investors will still be wading through a pile of results

It might be Thanksgiving across in the US in the coming week, with the Americans taking Thursday off to gobble up some turkey, but there will still be plenty for UK investors to chew over in the coming five sessions.

Another slew of blue chip corporate updates span from B&Q DIY chain owner Kingfisher PLC (LON:KGF), British Gas-owner Centrica PLC (LON:CNA), budget airline easyJet PLC (LON:EZJ), to contract caterer Compass Group PLC (LON:CPG).

Some cheer needed for Kingfisher

Interim results from blue-chip DIY retailer Kingfisher in September provided little cheer and investors will be hoping for some positive comments from a third-quarter trading update from owner of the B&Q and Screwfix chains on Wednesday, ahead of the all-important Christmas trading period.

The performance of the FTSE 100-listed firm’s troubled French DIY chain Castorama will again be a focus for the market, as will any update on the progress of the group’s long-term unification strategy.

There have been increasing calls for Kingfisher to split itself up with the French operations and Screwfix being separated out but so far under pressure CEO Véronique Laury has resisted.

No profit warning repeat from Centrica

About a year ago investors in British Gas parent Centrica had to eat a profit warning, and, according to Graham Spooner, investment research analyst at The Share Centre, the market will be hoping there won’t be a repeat.

In a preview, Spooner said: “In September the regulator announced the terms of caps on energy prices, which were less severe than expected and were viewed as a positive for the group and its ability to maintain the dividend next year.

“Any updates on cost savings and its ability to hit financial targets will be worth noting.”

Away from the core domestic energy supply businesses, investors may also look with interest at some of the group’s recent investments into hydrocarbon exploration and production opportunities in the UK.

Against a backdrop of Brexit and energy security, such investments may take some additional context and significance.

easyJet benefits from competitors’ woes

easyJet has been benefiting from the recent misfortunes of rivals, namely Ryanair Holdings PLC (LON:RYA), Monarch and Air Berlin.

Ryanair has been forced to cancel multiple flights this year due to worker strikes, while Monarch and Air Berlin both collapsed last year.

Ahead of its full-year results on Tuesday, easyJet said in a September trading update that these events had provided a boost to demand this year as it narrowed its profit guidance range for the year to £570mln and £580mln from a previous £550mln to £590mln.

Passenger numbers, excluding the operations at Berlin's Tegel Airport that easyJet bought from Air Berlin last December, are expected to rise by 5.4% to 84.6mln for the year on the back of a 4.2% increase in capacity to 90.3mln seats.

Total revenue per seat, excluding Tegel operation, is forecast increase by 6.5% at constant currency.

However, the group has been plagued by rising costs, mainly due to external factors out of its control such as third-party industrial action, severe weather and air traffic restrictions across Europe.

Headline cost per seat, excluding fuel and Tegel operations, is anticipated to be rise by 3.8% for the year at constant currency.

With easyJet having already told investors most of what to expect in the annual results, the focus is likely to be on how the group plans to tackle costs and other external headwinds like Brexit.

Margins the focus for Compass Group

In a third-quarter trading update at the end of July, Compass Group said it was on track to deliver revenue growth at the upper end of a 4%-6% range, with North America to remain particularly strong.

However, margins for the first half of the year were slightly disappointing, so investors’ eyes will mostly be on profitability, though the contract caterer believes Tuesday’s full-year results will show modest progression.

In a preview, George Salmon, equity analyst at Hargreaves Lansdown said: “We’d like to see this ring true – Compass has been working to generate efficiencies through its management and performance plan, so signs this is on track would be well received.”

He added: “After returning £1bn to shareholders as a special dividend last year, we’ll be looking to see what else is coming back to shareholders.”

Johnson Matthey to maintain growth expectations

Like many other industrial names, precious metals processor Johnson Matthey PLC’s (LON:JMAT) share price has been disappointing lately and investors will hope that the group’s interim results on Wednesday will see it maintain revenue growth expectations in the mid to high single digits.

In a preview, Graham Spooner, investment research analyst at The Share Centre said: “While the business is a leader in emissions technologies, for which it has been a beneficiary of increased regulations on emissions, it has a need to focus on the development of materials and chemicals for the revolution towards electric vehicles; this though will have a significant impact on research and development costs.”

New Sage boss should know his onions

One of the key focus for investors in FTSE 100-listed financial software provider Sage Group PLC (LON:SGE) when it reports full-year results on Wednesday will be that fact the performance of Steve Hare,  the firm’s current interim COO and CFO who has been appointed as successor to departed CEO Stephen Kelly.

However, given that fact that Hare is an insider of the business and has been involved in the group's strategic direction, then investors should not expect too much of a deviation from Sage’s current strategies.

Investors will expect to see the group’s transition to sUBScription-based revenues continue to drive sales forward and become and ever more dominant part of Sage’s business model.

However, there has already been a slowdown in parts of the business this year, especially in Northern Europe and the MENA region.

Back with its interims in May, Sage downgraded its full-year organic growth rates to 7%-8%, while keeping its operating margin intact at 27.5%, although whether this can actually be maintained was met with doubt by analysts a short while ago.

Regulatory terms key for United Utilities

With the heavily structured and regulated marketplace for UK utilities it is quite rare for financial results in the sector, so when blue chip United Utilities Group (LON:UU. reports on its third quarter on Wednesday the attention will be on the terms for the upcoming new regulatory business period.

UU gave the detail of its plan, which included a proposed £1bn cut to spending alongside a 10.5% reduction in the cost of the average bills for customers.

Share Centre analyst Graham Spooner, in a preview note, looked more closely at the quarter, and, said: “The warm summer resulted in additional costs in order to safeguard supplies and resources.

“Investors will be hoping that the concerns regarding regulators and politicians may be receding and that trading will be in line with expectations, leading to the share price and sector becoming less volatile.”

Investment programme focus for Severn Trent

Investors in mid-cap UK water and waste utility Severn Trent PLC (LON:SVT) will be hoping to see a continuation of the positive form indicated earlier this year.

Back in the summer, Severn Trent flagged a “good start” to the current year.

At that time maintaining its outlook for the full year, the FTSE 250-listed company said: “We have made a good start to the financial year and there has been no material change to current year business performance or outlook.”

Operationally, efforts have been fixed on the delivery of a £100mln investment programme and on Thursday the market will be keen for an update and any potential commentary about any other forward-looking initiatives.

Can TalkTalk keep up the momentum in net adds?

Further away from the blue chips, FTSE 250-listed TalkTalk Telecom PLC (LON:TALK) has recorded six consecutive quarters of growth in its customer base since changing its strategy to focus on providing low-cost broadband.

In the first quarter, the group added 80,000 broadband customers on strong demand for its fixed low-price plans and said it remained “firmly on track to deliver at least 150,000 net adds this financial year”.

Investors will be hoping for more of the same when it reports its second-quarter results on Wednesday.

They will also be looking to see whether TalkTalk can improve customer churn and average revenue per user (APRU). Customer churn – the proportion of customers leaving the company – rose to 1.28% in the first quarter from an average of 1.22% last year.  APRU fell to £24.65 from £25.10 but TalkTalk said it would stabilise in the first half.

Following the last quarterly update, analysts at Barclays said: “TalkTalk has suffered market share losses in the past few years, negative earnings momentum, and rising leverage; however, 12 months on from its strategy ‘reset’, we see a return to top-line growth with our/consensus earnings estimates seeming to have bottomed.”

Virgin Money takeover the focus of CYBG results

CYBG PLC’s (LON:CYBG) plan for recently acquired Virgin Money is likely to take centre stage when the bank reports its full-year results on Tuesday.

The group, which also owns Clydesdale Bank and Yorkshire Bank, completed the £1.7bn takeover of Virgin Money last month and now shareholders want to know what the next steps are for the business.

In its latest trading update in July, CYBG said that it expects full-year mortgage growth to be at the lower end of its guidance range due to an “extremely competitive” market.

Despite the competitive pressures in mortgages, CYBG maintained its forecast for net interest margin –  the difference between the interest earned on loans and the amount paid out on savings deposits – of 220 basis points.

UBS said: “We expect shrinking margins and a more difficult loan growth outlook to be confirmed with FY18 results when we expect a reset in medium-term targets to reflect the consolidation of Virgin.”

UBS expects CYBG to report profit before tax of £333mln for the year, up from £293mln in 2017, on broadly flat total income of £1.02bn.

Majestic Wine hoping to toast continued sales growth

Investors will be hoping to pop a few champagne corks on Thursday when wine-seller Majestic Wines PLC (LON:WINE) releases its interim results.

The company hiked it final dividend to 5.2p from 3.6p in June after it swung to a full year profit driven primarily by its Naked Wines division.

At the time, however, chairman Greg Hodder said the short-term market in the UK remained “tough”, although said the firm was confident of meeting its expectations for the new financial year.

Majestic shareholders will also be looking for any signs of the company’s investment in new customer acquisition which it announced in April, which it added may reduce the current year’s profits by £3mln.

Any change in outlook eyed from AO World

Shareholders in electricals retailer AO World PLC (LON:AO.) have already been cautioned that this year’s earnings will be more weighted toward the second half in a trading update last week, so any changes to that outlook will be closely watched when it reports interims on Tuesday.

In the update last week, the company also said group revenue for the six months to 30 September 2018 was up 9.9% year-on-year at £404.2mln, with its UK and EU revenues up 5.7% at £334.8mln and up 35.5% at £69.4mln respectively.

Investors may also be on the lookout for any more news on the acquisition of online-only mobile phone seller Mobile phones Direct, which AO said it was acquiring for £38.1mln.

In a note, analysts at City broker Shore Capital said that while they thought the company had “made some progress” it still remained “sub-scale”.

The broker also reiterated its ‘Sell’ rating on the stock, saying that “the Brexit fog” weighing on consumers coupled with an update from competitor Dixons Carphone Plc (LON:DC.) in December meant “the risks remain on the downside for AO”.

Diploma finals first since CEO departure

FTSE 250 technical products supplier Diploma PLC (LON:DPLM) will release its final results on Monday, the first figures since the departure of its chief executive Richard Ingram in August.

Ingram stood down with immediate effect at the end of August, with the board saying the move was in the “best interests of the company and its shareholders”.

However, investors will have something to smile about with the Diploma having previously forecast that revenues for the year will rise 7%, supported by an easing of foreign exchange headwinds and contributions from recent acquisitions.

Another round of pubs results

UK pubs enjoyed a decent summer on the whole, with the warm weather and World Cup helping to boost sales.

While those “exceptional factors” boosted pubs’ summer sales, all they really did was to paper over some of the cracks and give the operators a brief moment of respite.

Pubs are still facing rising wage costs, higher business rates and increased food and drink costs, while intense competition is keeping prices low.

They’re dealing with all this at a time when UK consumers are keeping a close eye on the pennies given the fall in real-terms earnings and continued Brexit uncertainty.

Some have been doing better than others though, particularly those with a more drinks-focused offering such as Fuller Smith & Turner PLC (LON:FSTA), which is due to report its half-year results on Friday.

Trading has been more mixed for the likes of Marstons PLC (LON:MARS) and Mitchells & Butlers PLC (LON:MAB), which will publish full-year numbers on Wednesday and Thursday, respectively.

Both have a much larger focus on food – M&B owns Harvester and Toby Carvery, for example – which is an oversupplied sector at the moment, just ask Byron, Zizzi, Jamie’s Italian and co which have all had to close restaurants of late.

City broker Liberum expects both companies to report higher full-year sales, although it doesn’t reckon that will filter down to the bottom line for M&B.

For Marstons, analysts are looking for sales of sales of £1.15bn and adjusted pre-tax profits of £104.3mln. As for M&B, they’ve pencilled in sales £2.22bn and adjusted pre-tax profits of £175mln.

Significant announcements expected week ending Nov 23:

Monday November 19:

Finals: Diploma PLC (LON:DPLM)

Interims: Sirius Real Estate Ltd. (LON:SRE)

Economic data: US NAHB housing market index

Tuesday November 20:

Finals: easyJet PLC (LON:EZJ), Compass Group PLC (LON:CPG), CYBG PLC (LON:CYBG), EI Group PLC (LON:EIG), Focusrite plc (LON:TUNE)

Interims: AO World PLC (LON:AO.), Aveva Group PLC (LON:AVV), Accsys Technologies PLC (LON:AXS), Bonmarche Holdings PLC (LON:BON), Big Yellow Group PLC (LON:BYG), CML Microsystems PLC (LON:CML), Eckoh PLC (LON:ECK), Electrocomponents PLC (LON:ECM), Halma PLC (LON:HLMA), Homeserve PLC (LON:HSV), Scapa Group plc (LON:SCPA), Solid State PLC (LON:SOLI), SRT Marine Systems PLC (LON:SRT), Telecom Plus PLC (LON:TEP)

Trading updates: CRH PLC (Q3) (LON:CRH), SIG PLC (LON:SHI), Spectris plc (LON:SXS), Polypipe PLC (LON:PLP)

Economic data: CBI UK industrial trends survey; US housing starts

Wednesday November 21:

Trading updates: Kingfisher PLC (Q3) (LON:KGF), Breedon Group PLC (LON:BREE)

Interims: Johnson Matthey PLC (Q2) (LON:JMAT), Talktalk Telecom Group PLC (LON:TALK), United Utilities PLC (LON:UU.), Babcock International Group PLC (LON:BAB), Biffa PLC (LON:BIFF), Creightons PLC (LON:CRL), Helical PLC (LON:HLCL), Liontrust Asset Management PLC (LON:LIO), Alpha Financial Markets Consulting PLC (LON:AFM), NewRiver REIT plc (LON:NRR), Syncona Limited (SYNC)

Finals: Sage Group PLC (LON:SGE), Marston’s plc (LON:MARS), Countryside Properties PLC (LON:CSP), Paragon Banking Group PLC (LON:PAG), SSP Group PLC (LON:SSPG), Cambria Automobiles PLC (LON:CAMB), C4X Discovery Holdings plc (LON:C4XD)

Economic data: UK public sector finances; US durable goods orders; US existing home sales; University of Michigan final consumer sentiment index

Thursday November 22:

US Thanksgiving holiday

Trading updates: Centrica PLC (LON:CNA), Rotork PLC (LON:ROR), Bank of Georgia Group PLC (Q3) (LON:BGEO)

Interims: Severn Trent PLC (LON:SVT), Majestic Wine PLC (LON:WINE), Mothercare plc (LON:MTC), MITIE Group PLC (LON:MTO), CMC Markets Plc (LON:CMCX), Hornby Plc (LON:HRN), Keller Group PLC (LON:KLR), Assura PLC (LON:AGR), Charles Stanley Group PLC (LON:CAY), Caledonia Investments PLC (LON:CLDN), IMImobile PLC (LON:IMO), Redcentric PLC (LON:RCN), Mountview Estates PLC (LON:MTVW), John Laing Environmental Assets Group Limited (LON:JLEN), First Property Group PLC (LON:FPO), TR Property Investment Trust plc (LON:TRY)

Finals: Mitchells & Butlers PLC (LON:MAB), Euromoney Institutional Investors PLC (LON:ERM)

FTSE 100 ex-dividends: Carnival PLC (LON:CCL), BCC PLC (LON:DCC), Imperial Brands PLC (LON:IMB), National Grid PLC (LON:NG.), Vodafone PLC (LON:VOD)

Economic data: US weekly jobless claims

Friday November 23:

Interims: Fuller Smith & Turner PLC (LON:FTSA), Record PLC (LON:REC)

AGMs: Base Resources PLC (LON:BSE)

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