House builders and banks are in the spotlight in the coming week with results from Barratt Developments PLC, Bovis Homes Group PLC, HSBC Holdings PLC, Lloyds Banking Group PLC, Barclays PLC, Royal Bank of Scotland Group PLC.
Bovis (LON:BVS) is first up with its full year results on Monday after issuing a profit warning in December, saying it expects it will complete 180 fewer homes than previously anticipated this year due to operational issues.
In the pre-close trading update, the group guided towards flat pre-tax profit between £160mln to £170mln, compared to analysts’ forecasts of about £183mln. Revenues are predicted to reach £1.04bn to £1.06bn, compared to £946.5mln last year. The company’s chief executive David Ritchie quit just days after the profit warning.
“With a profit warning on 28 December, the subsequent resignation of its CEO, and a widely reported letter (FT) from a major shareholder suggesting the company should be acquired, it’s tumultuous times for Bovis,” Deutsche Bank said.
“At this set of results we believe investors will focus on big picture themes – progression in process to hire a new CEO, the impact of the difficult publicity on customers and business and how the operations will be changed to ensure a third profit warning isn’t seen.”
Deutsche expects pre-tax profit of £166.3mln and sales of £991.4mln.
On Wednesday Barratt Developments PLC (LON:BDEV) reports its first half results. The house builder has already issued its forecasts in trading update with a 7% increase in pre-tax profit to £315mln expected.
It said total forward sales were up 15.8%% to £2.3bn, compared £2.27bn the same period a year earlier.
Deutsche Bank has also forecast pre-tax profit of £315mln and sees sales falling 2.2% to £1.83bn.
Among the banking sector, HSBC (LON:HSBA) announces its fourth quarter and full year results on Tuesday. Analysts expect the lender will continue to see a decline in advisory revenue, due to a slowdown in mergers and acquisitions and weakness in initial public offering markets. Deutsche Bank said it anticipates HSBC made earnings of $13.2bn in 2016 and will rise to $18.4bn this year.
Meanwhile, investors will be looking for an updates on its plans to move its headquarters to Paris from London following Brexit. HSBC's chief executive, Stuart Gulliver, told Bloomberg last month he was preparing to make the move.
Lloyds Banking Group (LON:LLOY) posts its full year earnings on Wednesday with analysts expecting a conservative dividend as the group digests its £1.9bn acquisition of MBNA’s UK credit card business. Ahead of the results, Barclays Capital raised it earnings per share forecast for 2016 to 7.3p a share from 6.7p.
Barclays said it was less pessimistic than it was on the potential impact of an economic slowdown on the home loans portfolio, while it also gave the proposed acquisition of MBNA a clean bill of health.
On Thursday, the attention turns to Barclays (LON:BARC) when the bank reports its full year results. The consensus estimate for pre-tax profit its £3.9bn, compared to £2.05bn the previous year. Net operating income, net of insurance claims, is expected to reach £20.7bn.
The chief executive’s salary will be a key focus in the results following reports earlier this month suggesting Barclays was considering freezing Jes Staley’s maximum pay at £8mln for the next three years.
Fellow UK lender Royal Bank of Scotland (LON:RBS) posts its full year earnings on Friday. The group is expected to announce another round of job cuts along with annual losses of about £5bn. It would mark the ninth straight year of losses at the bank.
The Sunday Times reported on 12 February that the bank plans to slash up to 15,000 jobs as it looks to cut costs and close more branches.
Last month the 73% taxpayer-owned bank also announced it had set aside a further £3.1bn for fines from US authorities over the way it packaged up and sold mortgages almost a decade ago. It takes the total aggregate of such provisions to £6.7bn at 31 December.
On the economic data front, the second estimate of fourth quarter UK gross domestic product figures by the Office for National Statistics will be released on Wednesday.
GDP growth is expected to be revised to 0.7% quarter-on-quarter from the preliminary reading of 0.6%, reflecting higher-than-estimated industrial and construction output.
“The resilience of the UK economy since last June’s Brexit vote has largely been due to the fact that consumers have kept on spending – but falling retail sales in December and January fuels belief that consumers are now starting to rein in their spending as their purchasing power is increasingly squeezed,” said Howard Archer, chief UK and European economist at IHS Global Insight.
“We expect GDP growth to moderate to 1.6% in 2017 - as consumer spending slows markedly amid weakening fundamentals and as business become increasingly cautious over investment (and employment) as the economy shows mounting signs of slowing and uncertainties over the outlook are magnified by Brexit negotiations coming to the forefront after the government triggers Article 50.”
The ONS revealed UK retail sales unexpectedly fell in January as consumers started to feel the pinch of higher prices following the Brexit vote. Seasonally adjusted sales volumes, excluding fuel, declined 0.3% month-on-month in January, trailing analysts’ expectations for a 1.0% rise and following a downwardly-revised 2.1% decline in December.
Significant announcements expected
Monday
Finals: BGEO Group PLC (LON:BGEO), Hammerson (LON:HMSO), Bovis Homes
Interims: Vedanta Resources PLC (LON:VED)
Tuesday
Finals: Anglo American PLC (LON:AAL), HSBC, InterContinental Hotels Group PLC (LON:IHG), Lighthouse Group PLC (LON:LGT), Vitec Group PLC (LON:VTC)
Interims: BHP Billiton Limited (LON:BLT), Galliford Try PLC (LON:GFRD),
Trading statements: Safestore Holdings PLC (LON:SAFE)
Wednesday
Finals: Capital & Counties Properties PLC (LON:CAPC), Lloyds Banking Group, Petrofac Limited (LON:PFC)
Interims: Barratt Developments, Hays PLC (LON:HAS), Hotel Chocolat Group PLC (LON:HOTC), McBride plc (LON:MCB)
Thursday
Finals: BAE Systems PLC (LON:BA.), Barclays PLC (LON:BARC), British American Tobacco PLC (LON:BATS), Glencore PLC (LON:GELN), Kaz Minerals PLC (LON:KAZ), Playtech PLC (LON:PTEC), Relx PLC (LON:REL), Rathbone Brothers PLC (LON:RAT), RSA Insurance Group PLC (LOND:RSA), Howden Joinery Group PLC (LON:HWDN)
Interims: Monitise PLC (LON:MONI), Wilmington PLC (LON:WIL)
Friday
Finals: Jupiter Fund Management PLC (LON:JUP), Pearson PLC (LON:PSON), Royal Bank of Scotland, Rightmove PLC (LON:RMV), William Hill PLC (LON:WMH), TBC Bank Group PLC (LON:TBCG)