Takeover speculation continues to swirl around chip designer Imagination Technologies, especially in the wake of disappointing trading updates.
The most recent update was one such update, with the company lowering guidance on growth in licensing revenue, so the company has a bit of reputational damage to restore in its full year results due out on Tuesday.
JP Morgan Cazenove expects the numbers will be broadly in line with guidance and market expectations. Caz has pencilled in £179.7mln for sales, which is above the consensus forecast of £178mln, and goes for underlying earnings before interest and tax (EBIT) of £21.7mln, versus the median forecast among analysts of £21.4mln.
“We expect IMG to guide improved FY16 performance though we do not know the granularity to which they will guide,” Cazenove said.
The broker opines that the market will be focusing on estimates being met and operating expenditure (opex) being controlled.
“In the current low growth environment (5% FY15 sales growth), investors are expecting opex growth to remain low unless management expects growth to be much higher in which case the company will need to give supporting information,” the broker said.
Significant announcements expected
Monday
Economic: UK – Mortgage approvals, Money supply. EU – Economic confidence. US – Pending home sales.
Tuesday
Interims: St Modwen Properties (LON:SMP)
Finals: Imagination Technologies (LON:IMG), Northgate (LON:NTG), Plastics Capital (LON:PLA), Sweett Group (LON:CSG)
Economic: UK – GfK consumer confidence survey, Current account, Gross domestic product. EU – Eurozone consumer price index. US – S&P/Cash-Shiller composite, Consumer confidence
Wednesday
Finals: Greene King (LON:GNK)
Trading statement: Tullow Oil (LON:TLW)
Economic: Asia – Chinese manufacturing PMI, Chinese non-manufacturing PMI, Chinese HSBC manufacturing PMI. UK – Markit PMI manufacturing. US – MBA mortgage applications, ADP employment change
Thursday
Finals: Scholium Group (LON:SCHO)
Trading statement: Persimmon (LON:PSN)
The following widely-held companies are trading ex-dividend on Thursday: Direct Line Insurance, ICAP, Homeserve, Tate & Lyle, Royal Mail, British Land, BP, Burberry, Dairy Crest Group, De La Rue, Coca Cola HBC.
Economic: UK – Nationwide house prices, Markit/CIPS construction PMI. US – Non-farm payrolls.
Friday
Finals: Polar Capital Technology (LON:PCT)
Economic: Asia – HSBC composite PMI, HSBC services pmi. Uk – Markit/CIPS services PMI, Markit/CIPS composite PMI. EU – Eurozone retail sales