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Taylor Wimpey and Vodafone to lead the way on a busy Tuesday in the City

The City diary is filled to the brim, with updates expected from Taylor Wimpey, McCarthy & Stone, Vodafone, Premier Foods, Experian and many more
housebuilder
The furore surrounding the bonus of now ex Persimmon boss Jeff Fairburn has put housebuilders in the spotlight

Low interest rates and government schemes such as Help to Buy, Buy-to-Let and the Lifetime ISA have been a huge boon for housebuilders in recent years.

The measures should continue to help the likes of Taylor Wimpey PLC (LON:TW.), although they won’t last forever.

Chancellor Philip Hammond said in last week’s Budget that Help to Buy will end in 2023, so investors will want to see both companies building some strong foundations while the sun is shining.

Taylor Wimpey, which will update the market on Tuesday, has previously said costs would rise by no more than 3-4% over the year. Given that higher labour spending earlier this year contributed to a 1.8% decline in operating profits, it’s an important target to hit.

The Beast from the East earlier in the year held back TW’s completions in the first half. It wasn’t a terrible effort by any means, but investors will want to see numbers rebound in the second half.

More challenging for McCarthy & Stone

The environment is slightly different for retirement housebuilder McCarthy & Stone PLC (LON:MCS) which is due to publish its full-year results.

New chief executive John Tonkiss conceded in an update back in September that it had been a “tough” year for his company, which hasn’t benefitted from any government support like Help to Buy.

From that update, the market already knows what the numbers are likely to be: revenue up slightly of £670mln, but operating profits down to between £65-73mln from almost £100mln last year.

Attention, therefore, is likely to be on its recently announced business transformation strategy, which will see margins prioritised over growth.

Through the programme, McCarthy also expects to save £90mln over the next couple of years.

As with any housebuilder, the forward order book, which was looking healthy back in September, will also be eyed as an indication of what to expect in the coming year.

Investors seeking reassurance from Vodafone

Vodafone PLC (LON:VOD) has seen a disappointing share price performance recently, with sentiment impacted by a slowdown in Europe, EU regulation on roaming charges, UK handset financing and lower service revenues out of its Indian operations.

Investors will therefore be seeking reassurances that these issues are being contained when the FTSE 100-listed mobile telecoms firm’s new management team, led by CEO Nick Read, release its interim results on Tuesday.

Graham Spooner, investment research analyst at The Share Centre thinks the market will want to know that the integration of Vodafone’s broadband acquisitions in Europe are going well and that data demand growth and emerging market growth continues at a rapid pace.

In a recent note, analysts at JP Morgan Cazenove cut their target price for Vodafone to 240p from 255p amid concerns over the sustainability of its dividend and the growth outlook.

The analysts said they believed the company’s fortunes now rested on its ability to cut costs rather than in top-line growth.

Solid interims hoped for from Experian

Shore Capital expects Experian PLC (LON:EXPN) to report strong interim results on Tuesday, following on from July’s first quarter trading update which confirmed a positive start to the year with group organic growth then running at around 8%.

The City broker expects new product and service launches to be continuing to drive the FTSE 100-listed data services specialist’s organic development, leveraging industry secular growth in data.

Regionally, they added, North America is likely to continue to lead growth at around 10% for the first half, led by core business data, while the UK & Ireland is still generating modest growth, weighed by the restructuring of Experian’s Consumer services business.

Shore Capital forecasts Experian’s first half revenues rising by 6% to US$2.33bn, with adjusted underlying earnings (EBITA) up 9% to US$648mln, and their interim dividend expectation is for around a 5% increase to 14.0 US cents.

Premier Foods issues first post-revolt results

The chief executive of Bisto-maker Premier Foods PLC (LON:PFD), Gavin Darby, may be a little anxious as the firm releases its half year results having narrowly survived a shareholder revolt at its AGM in July.

Dissatisfaction has been growing ever since Premier rejected a 65p a share offer from US food giant McCormick back in 2016.

A solid first quarter trading update issued just before the AGM however showed sales rising 1.7% year-on-year, a trend investors (and Darby) will be hoping has continued.

Significant announcements expected on Tuesday November 13:

Interims: Vodafone PLC (LON:VOD), Land Securities PLC (LON:LAND), DCC Plc (LON:DCC), Experian PLC (LON:EXPN), FirstGroup PLC (LON:FGP), Premier Foods PLC (LON:PFD), BTG PLC (LON:BTG), Carclo PLC (LON:CAR), Codemasters Group Holdings PLC (LON:CDM), Adept Technology Group PLC (LON:ADT), Oxford Instruments PLC (LON:OXIG), Castings PLC (LON:CGS), Schroder Real Estate investment Trust PLC (LON:SREI)

Finals: McCarthy & Stone PLC (LON:MCS), Orchard Funding Group PLC (LON:ORCH)

Trading updates: Taylor Wimpey PLC (LON:TW.), Aggreko PLC (LON:AGK), TT Electronics PLC (LON:TTG), Vitec PLC (LON:VTC), Charter Court Financial Services Group PLC (LON:CCFS), JPJ Group PLC (Q3) (LON:JPJ)

Economic data: UK unemployment, average earnings; US NFIB business optimism index


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