Investors are set for another deluge of earnings statements this week, including from hospitality giant InterContinental Hotels plc (LON:IHG) and insurer Direct Line plc (LON:DLG).
Flooding in focus
The latter will be interesting in regard to the severe UK floods at the beginning of this year. The insurer is posting half year numbers.
In January, it forecast a hit of up to £140mln from the floods that engulfed northern England.
The group expected claims resulting from damage caused by three storms would cost it between £110mln and £140mln.
Broker Numis expects a decrease for the half year in operating PBT (profit before tax) to £288mln as reserve releases begin to normalise from recent high levels as well as the £25mln charge for the Flood Re levy.
Analyst Nick Johnson said of more interest will be underwriting margins, particularly for the motor segment where guidance has been for reserve releases to make a smaller contribution than previous years.
"We forecast total group reserve releases of £193m in H1 compared to £215m in the comparative period. Current guidance is for a group combined ratio of 93-95% for FY16 assuming normal weather (we forecast 91.3% for 16H1)."
He added that Direct Line had recently played down expectations for a return of excess capital until the company had finalised its Solvency II model.
The broker does not expect a special dividend this time round.
RevPar in the spotlight at IHG
In May, InterContinental Hotels (LON:IHG, NYSE:IHG) said it had seen a better-than-expected year-on-year increase in its key metric, revenue per available room (RevPAR) in the first quarter.
Traders will therefore be interested in progress in the second, when it reports half year numbers next week.
Despite turmoil in the oil market, which had an impact on activity in some of its most lucrative regions, and the earlier timing of Easter, RevPAR was up 1.5% from a year earlier.
That topped the 1.4% increase expected by Vicki Stern, an analyst at Barclays, and the 1% increase from the pessimistic souls at UBS.
Numis expects group RevPAR growth in the latest half to be around 2.5% which should translate into EBIT (earnings before interest and tax) growth of $345mln, it said.
It rates the hotel group as 'hold' with a target of 2,700p.
Serco the outsourcer
Also reporting next week is outsourcer and previously scandal-struck Serco Group plc (LON:SRP), which Numis is not particularly bullish on and puts at 'reduce', targeting 85p.
It notes Serco’s pre-close update of June 30 had already repeated guidance management had provided on May 25, in which it had raised FY16 expectations for underlying trading profit to “at least £65m”.
Julian Cater, at Numis, said: "We forecast 1H16 PBT of £36.9m vs only £14.6m in 2H16 (EPS of 2.4p in H1 vs 0.9p in H2). Management made no changes to its expectations for 2017 (“little financial progress”) and we forecast £60.7m of underlying trading profit in 2017."
The broker also forecasts 1H16 net debt of around £105mln, and for this to increase to around £250mln by 2018.
Ingredients in focus?
In the junior market, The Real Good Food Company PLC (LON:RGD) is posting final results and investors will be keen to see how the ingredients and bakery firm's various divisions are performing.
At the end of April, the firm said it was on track to report underlying profits in line with market forecasts.
Last year , it generated sales of £104mln and underlying profits of £5.3mln from the ongoing businesses and something similar is expected by the market this time around.
Statutory profits for the year to March will be approximately £13.9m, which includes a one-off gain of £9.4mln following the sale of Napier Brown for £44mln.
That disposal has also seen net debt fall to £5mln from £30mln a year ago.
Real Good Food has three divisions now: Food ingredients; cake decorating; and bakery through the Haydens business.
Significant announcements
Monday
Interims - Intertek Group PLC (LON:ITRK), Vedanta Resources PLC (LON:VED), Fidessa Group PLC (LON: FDSA).
Final results - Real Good Food Company (The) PLC (LON:RGD), OPG Power Ventures PLC (LON:OPG), Clipper Logistics (LON: CLG).
Tuesday
Interims - Spirent Communications PLC (LON: SPT), SDL Plc (LON: SDL), Shire Plc (LON:SHP), Meggitt plc (LON:MGGT), Tullett Prebon PLC (LON:TLPR), Shire Plc (LON:SHP), InterContinental Hotels Group PLC (LON:IHG), Travis Perkins PLC (LON:TPK), Direct Line Insurance Group PLC (LON:DLG), Fresnillo PLC (LON:FRES), 4imprint Group PLC (LON: FOUR), Greggs plc (LON:GRG).
Wednesday
Interims - Rio Tinto PLC (LON: RIO), Standard Chartered PLC (LON:STAN), StatPro Group PLC (LON: SOG), Livanova Plc (LON: LIVN)
Trading statement - Next Plc (LON:NXT).
Thursday
Interims - RSA Insurance Group PLC (LON: RSA), London Stock Exchange Group PLC (LON:LSE), RPS Group PLC (LON: RPS), Johnston Press plc (LON: JPR), Inmarsat Plc (LON: ISAT, Hill & Smith Holdings PLC (LON: HILS), Ladbrokes PLC (LON: LAD), Aviva PLC (LON: AV.), Mondi Plc (LON: MNDI).
Friday
Interims - esure Group plc (LON: ESUR), William Hill PLC (LON:WMH), Kennedy Wilson Europe Real Estate Plc (LON: KWE), Royal Bank of Scotland Group PLC, HSBC Holdings PLC (LON: HSBA).