Tuesday's corporate diary has a transatlantic feel, with a trading update from British American Tobacco, results from US-focused groups Ashtead and Ferguson.
The bar is set high for equipment hire firm Ashtead Plc ahead of its results, with the market price presently only slightly beneath all-time highs.
Ashtead has been bullish in the run-up and will have to at least live up to expectations.
“The firm weathered 2020’s pandemic and recession better than expected and has recovery more quickly than anticipated by analysts in 2021, thanks in part to how it derives some 80% of revenues and 85% of profits from its American operation, Sunbelt (the rest comes from the UK and Canada),” AJ Bell analysts said in a note.
“The US economy has rebounded strongly from 2020’s short, sharp downturn and the Biden administration’s expansionary fiscal policy, with a focus on infrastructure spending, seems to put Ashtead in a bit of a sweet spot.”
Investors will be keen for an update on dividend, which maintained growth through the pandemic, and have an eye on share buy-backs, as a campaign has so far spent around US$200mln.
Will British American Tobacco undershoot again?
British American Tobacco has plenty of sceptics and Barclays seems to be one of them, believing the cigarette giant should be performing a lot better.
Growth has undershot long-term guidance of 7% over the past two years in spite of people reportedly puffing away more during lockdown periods.
BAT blames the impact of a South African ban in 2020 as well as foreign exchange fluctuations in 2021 but Barclays points to not prioritising its next-generation products enough, an area where it has a clear advantage.
Around 6% annual earnings growth has been what BAT has been delivering recently and may do so again, suggests the UK bank.
Macro news
Tuesday will see the release of the British Retail Consortium’s (BRC) retail sales monitor, which will give some idea of the health of the High Street.
The survey covers November, which of course is before news of the Omicron variant of Covid-19 broke and started affecting the behaviour of shoppers.
On top of that, the survey is not regarded as a totally reliable indicator of retail sales volumes because of the relatively small number of survey respondents but for what it is worth, economists are expecting volumes to be up 1.1% year-on-year after October’s 0.2% fall.
Significant announcements on Tuesday 7 December
Finals- CareTech Holdings, Hyve Group plc, IXICO plc, Paragon Banking Group PLC, Renew Holdings, Tritax Eurobox PLC
Interims- Ashtead PLC, Babcock International (LSE:BAB), iomart Group, Kinovo PLC, Mercia Asset Management PLC, SDI Group Plc, Solid State PLC, Supreme PLC, Vianet Group, WH Ireland Group PLC
Trading announcement- Ferguson PLC, British American Tobacco PLC, Schroder Japan Growth Fund plc, Scottish Oriental Smaller Cos Trust, YouGov Plc
AGMs- Amedeo Air Four Plus Ltd, Applied Graphene Materials PLC, Falanx Group Ltd, IMC Exploration
Economic announcements- Retail Sales (UK), Halifax House Price Index (UK), Consumer Credit (US)