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The Markets
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The Markets
by Proactive
Proactive UK has moved.
Small-cap coverage continues on .com
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Investments and investor services

Week Ahead: Growth in Asia to offset Pru's UK growth issues

The Pru's decision to focus on Asia has proved a smart one, but with regulatory changes affecting the retail annuity market in the UK, it can't afford a slowdown in its Asian operations.

Judging by the list of companies going ex-dividend on Thursday, there can't be many major companies left that have not provided updates recently.

The list of expected announcements is, indeed, lighter than it has been over the last couple of weeks, but there is still more than a handful of household names, such as esure, Ladbrokes, Prudential, G4S and Cineworld, set to report.

Insurer esure is first out of the traps on Monday with its half year results, and having reported the first signs of growth in customer numbers and premium income in the first quarter, shareholders will be hoping the momentum continues.

Numis Securities predicts 2% growth year-on-year in customer numbers for the half year and a 4% increase in gross premium income.

The big beast of the insurance sector, the Pru, reports the day after, and the emphasis is likely to remain on growth in Asian markets, which should offset a slow-down in annuity sales in the UK, which is not only a mature market for the Pru but is also one where the pension scene is still settling down after a radical shake-up.

"Both earnings and the dividend payment are expected to grow by around 10% year-over-year, whilst an update on Solvency II regulations may be provided," suggests broker Hargreaves Lansdown.

Two companies looking to get out of the doghouse are reporting: security services provider G4S and outsourcing specialist Serco.

Numis predicts a modest acceleration from the 3.9% organic revenue growth that G4S delivered in 2014, with similar regional patterns, namely growth in North America and the developing markets, held back by the performances of the UK and Europe.

Commenting on Serco, Robin Speakman of Shore Capital, said: "The market remains eager to learn when the revised strategy is set to see revenue flows stabilise and a new contract pipeline emerge, driving the business back to future growth.

"Serco is still set to complete disposals and investors await news here, eyes focused on the disposal of the India BPO [business process outsourcing] business in particular. "Serco continues to see specific contract issues, with those in Australasia particularly high profile at present; these include the Fiona Stanley hospital (contract changes), volumes in Australia immigration, the resolution of costs to sustain the operation of the Armidale Class patrol boats and the recent removal from the New Zealand Mound Eden detentions facility following management issues."

Shore estimates booked revenues for the half year of around £2.1bn (including joint ventures) and underlying trading profit, or EBITA, of between £40mln and £50mln.

It has pencilled in a figure of £30mln for adjusted profit before tax.

Significant announcements expected

Monday

Interims: esure Group (LON:ESUR), Gresham Computing (LON:GHT)

Economic: UK - BRC retail sales monitor. EU - Sentix investor confidence

Tuesday

Final: Hargreaves Services (LON:HSP)

Interims: Johnston Press (LON:JPR), Ladbrokes (LON:LAD), Partnership Assurance Group (LON:PA.), Prudential (LON:PRU), Serco Group (LON:SRP), SIG (LON:SHI), Synthomer (LON:SYNT)

Trading statement: Card Factory (LON:CARD)

Economic: EU - ZEW economic sentiment. US - Non-farm productivity, Wholesale inventories.

Wednesday

Interims: Balfour Beatty (LON:BBY), Capital & Regional (LON:CAL), CLS Holdings (LON:CLI), G4S (LON:GFS), Interserve (LON:IRV), JSC TBC Bank (LON:TBCB), Lookers (LON:LOOK), New Europe Property Investments (LON:NEPI)

Economic: UK - Average earnings, RICS house price balance, Unemployment rate. EU - Industrial production. US - Crude oil stockpiles

Thursday

Interims: Bankers Petroleum (LON:BNK), Cineworld Group (LON:CINE), Coca-Cola HBC (LON:CCH), Derwent London (LON:DLN), Ithaca Energy (LON:IAE), Michael Page International (LON:MPI), Ophir Energy (LON:OPHR), Quarto Group (LON:QRT)

Trading statement: Grainger (LON:GRI), Infinis (LON:INFI), TUI (LON:TUI)

The following widely held stocks are going ex-dividend: Ashtead, AstraZeneca, Berkeley Group, Diageo, Direct Line, Fresnillo, GKN, GlaxoSmithKline, Greene King, HSBC, Legal & General, Lloyds Banking Group, Man Group, Merlin Entertainments, Millennium & Copthorne, Pearson, Pets at Home, Royal Dutch Shell, Schroders, Standard Chartered

Economic: EU - ECB monetary policy meeting accounts. US - Business inventories, Core retail sales, Weekly jobless claims

Friday

Economic: UK - Construction output. EU - Core consumer prices, Flash GDP. US - Capacity utilisation.

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