Proactive Investors - Run By Investors For Investors

Philip Hammond's first-ever UK Spring Statement to show austerity still very much alive

The day ahead includes the first-ever UK Spring Statement from Chancellor Philip Hammond, plus full-year results from Antogasta, Cairn Energy, and Fevertree Drinks
Chancellor of the Exchequer, Philip Hammond
The Budget is now pushed back to the autumn, after the Chancellor of the Exchequer announced changes to the age-old economic tradition last November

No real surprises are expected from the UK’s first-ever Spring Statement, with the Budget now pushed back to the autumn, after the Chancellor of the Exchequer, Philip Hammond announced changes to the age-old economic tradition last November.

As he trailed in interviews last weekend, Hammond is expected to keep austerity alive in the statement amid an uncertain UK economic outlook.

The statement is, however, expected to reveal a brighter short-term outlook from the Office for Budget Responsibility (OBR) and an improvement in the public finances, with the Chancellor aiming to eliminate the budget deficit by the mid-2020s.

In November, the OBR estimated that public sector net borrowing would rise by £4.2bn year-on-year to £49.9bn in the 2017/18 financial year. But the Resolution Foundation has said the deficit for 2017/18 is expected to be £7bn to £11bn lower than the OBR’s estimate.

On the corporate front, fourth-quarter numbers from blue-chip miner Antofagasta PLC (LON:ANTO) are expected to illustrate the exceptional 2017 seen so far from commodity firms as they clean up their balance sheets and reduce costs.

In a preview, Graham Spooner, investment research analyst at The Share Centre said: “With overall production improvements and higher average commodity prices, investors should expect strong sales growth compared to the previous year and a significant improvement in overall profitability.”

He added: “Key to the future will be whether the new mines and assets offset the declining grades of ore at some older mines.”

Focus on news fields for Cairn Energy

Staying with commodity stocks, like Premier Oil PLC (LON:PMO) last week, attention in Cairn Energy PLC’s (LON:CNE) full-year numbers will be on new field start-up and cash flow growth when.

Premier reassured on the jointly-owned North Sea Catcher field – in which Cairn has a 20% stake – so the focus on Tuesday will be on the Kraken field.

In terms of the financial results, UBS analysts expect underlying earnings (EBITDAX) of US$10mln, an operating loss of US$127mln and a net loss of US$90mln.

Meanwhile, Fevertree Drinks PLC (LON:FEVR) said in a trading update in January that a strong festive period meant its full-year results – also due on Tuesday - will be "comfortably above" expectations.

The AIM-listed firm added that it had enjoyed another year of strong revenue growth, with sales for the 12 months to December 31 expected to be around £169mln – 66% higher than the £102.2mln it generated in 2016.

The mixer drinks firm noted that the UK was once again the star performer, with sales in the company’s home market doubling over the year, while European sales were not quite as strong but still rose 42% year-on-year, and US sales were projected to be up 39%.

Significant events expected on Tuesday March 13:

UK Spring Statement (12.30pm)

Finals: Antofagasta PLC (LON:ANTO), Applegreen PLC (LON:APGM), Bango plc (LON:BGO), Brady Plc (LON:BRY), Cairn Energy PLC (LON:CNE), Computacenter PLC (LON:CCC), Crossrider Plc (LON:CROS), French Connection Group PLC (LON:FCCN), Fevertree Drinks PLC (LON:FEVR), Gresham Technologies PLC (LON:GHT), Glenveagh Properties PLC (LON:GLV), Goals Soccer Centres PLC (LON:GOAL), H&T GROUP PLC (LON:HAT), LMS Capital PLC (LON:LMS), Midwich Group Plc (LON:MIDW), John Menzies PLC (LON:MNZS), Restore Plc (LON:RST), Stadium Group plc (LON:SDM), Smart Metering Services PLC (LON:SMS), Surgical Innovations PLC (SUN), TP ICAP PLC (LON:TCAP), XLMedia PLC (LON:XLM), Zotefoams Plc (LON:ZTF)

Interims: Close Brothers Group PLC (LON:CBG), Eagle Eye Solutions Group PLC

Economic data: US consumer price index

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investor UK Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use