Electronic databases specialist RELX Group PLC (LON:REL) is expected to report another year of underlying revenue, profit and earnings growth on Thursday.
Revenue growth on the Scientific, Technical & Medical side and in the Legal business is expected to be modest, having been up 2% year-on-year in the first nine months of the financial year.
The sexy numbers should be provided by the Risk & Business Analytics (R&BA) division, which has seen strong revenue growth across all segments of the division.
The R&BA division saw underlying revenue growth of 8%, which topped the 5% growth seen in the Exhibitions business.
Margins under pressure ConvaTec
Product supply in wound care and ostomy has been hampered by the implementation of the gross margin improvement plan, although margins are still likely to have slipped last year.
Results for the 12 months to December 31 are due on Thursday, and the FTSE 250 group is expected to deliver sales growth of 1.5% to US$1.75bn, according to City broker Numis.
But the gross margin is tipped to fall to 61% which means underlying earnings are forecast to dip to US$451mln (2016: US$472.2mln), while adjusted earnings per share is seen as slipping to US$0.165 (2016: US$0.183).
“Assuming no further fall in cash conversion (75% in H1, 80% in FY16), the focus should be on the outlook for FY18, where we forecast 2.4% organic growth on constant currency (consensus c.2-3%), flat gross margins (FX headwinds) and increased opex (NSe 37% of sales),” said Numis analyst Paul Cuddon.
Cuddon reckons sales and marketing and R&D investment will rise this year as ConvaTec battles its way through a “harsher competitive environment”, while the analyst is also looking for guidance on the implications from the recently-introduced US tax cuts.
Thursday February 15:
Economic data: EU preliminary GDP; US weekly jobless; US industrial production; US forward PPI; Philly Fed business outlook; Empire State manufacturing survey