One of the clouds hanging over telecoms group BT Group PLC (LON:BT.A) has moved away - the separation of its infrastructure business Openreach - but the pensions problem still casts a huge shadow.
Its January update, covering the third quarter of its fiscal year, produced decent figures, with adjusted underlying earnings (EBITDA) up 18% year-on-year, but down 8% when adjusted for the acquisition of EE.
The numbers were affected by the big write-downs related to the accounting scandal at its Italian business.
In view of how the payment protection insurance (PPI) mis-selling scandal in the banking sector turned out to be a much, much larger can of worms than anyone envisaged, shareholders will be anxious to learn that there have been no further write-downs associated with the Italian arm.
The stock is a favourite of pension funds for its handsome dividend, so focus will be on BT’s ability to continue to finance the pay-out.
Talk Talk's new team keen for fast start
Talk Talk is one of those chipping away at BT‘s historic position in the UK telecoms market.
Full year results will see a changing of the guard with the departure of Dido Harding to be replaced by Charles Dunstone as executive chairman and Tristia Harrison as chief executive.
The new team have already indicated that pricing will be a key growth driver going forward alongside acquisitions.
“Depending on ambition the Co could also trade investment with shareholder returns, though we expect FY17 div expectations to be delivered,” said Deutsche Bank.
The German broker forecasts underlying profits [EBITDA] of £323mln and a final dividend of 10.58p (total 15.9p, 8.3%).
Recent regulatory proposals are beneficial for TALK, says the broker with proposed reduction in VULA is worth £30mln and will allow TALK to improve volumes, expand profits, or a combination of both.
Further, higher quality supply of ethernet by BT should help TALK expand enterprise.
Centrica needs friends..
British Gas owner Centrica (LON:CNA) is a bit friendless among the broking community at present.
And with energy prices set to be key in all parties’ manifestos in the election nothing much it says on Monday will change that.
Like its rivals, Centrica is facing energy price caps and protection for consumers from hefty bills and that is just if Theresa May wins.
Macquarie recently downgraded to hold and its reasons are the things to watch for with its update: Margin reduction and customer losses in retail; increased losses in connected home; power and gas prices staying subdued; lower capacity auction results; and higher financing costs.
William Hill out in the cold after failed deals
Not so long ago William Hill PLC (LON:WMH) was regarded as a safe bet, at least in comparison to fellow bookie Ladbrokes.
Now? Not so much, with concerns about the online strategy and the government’s apparent desire to crack down on the lucrative fixed odds betting terminals.
Philip Bowcock has been in the saddle since July of last year, during which time he has backed the company out of merger talks with Pokerstars owner Amaya Inc (TSE:AYA) and seen off an opportunistic approach from 888 Holdings PLC (LON:888) and bingo firm Rank Group PLC (LON:RNK).
Tuesday’s update will be about strategic progress online and the performance of the Aussie business, but also how much money William Hill took off the punters at the Cheltenham racing festival, where results were favourable to the bookies.
Results from Paddy Power Betfair plc recently indicated sporting events in April were not so welcome.
READ Grand National not so grand for bookie Paddy Power Betfair
Barratt building success
Like its fellow FTSE 100-listed housebuilding groups Persmmon PLC (LON:PSN) and Taylor Wimpey PLC (LON:TW. – which both updated the market last week – trading news from Barratt Developments, due on Wednesday is expected to be positive in spite of Brexit worries.
Like most other housebuilders, Barratt shares have staged a good recovery since the EU referendum outcome last June thanks to resilient consumer sentiment.
A shortage of housing, attractive mortgage rates, good employment levels and government policies should see this trend continue into the group’s latest update, with analysts predicting that the group’s forward order book will stay at record levels.
Back with its first-half results earlier this year, Barratt had said current trading was strong, with record total forward sales as at February 19, totalling £3.018bn, up 17.0% year-on-year – at the start of January forward sales had been £2.3bn, up 16%.
the group posted a pretax profit of £321mln for the six months to December 31, up 8.8% on the £295mln reported at the same stage a year earlier, beating its own January forecast for 7% growth.
Barratt said then that completions outside of London were at the highest level for nine years, although it added that it plans to build fewer homes this year.
ANNOUNCEMENTS DUE NEXT WEEK:
Monday 8 May
Interim: Toople Plc (LON:TOOP; Numis Corporation PLC (LON:NUM)
Trading Statement: Eckoh PLC (LON:ECK); Centrica PLC (LON:CNA)
Tuesday 9 May
Interims: Treatt PLC (LON:TET); Cambria Automobiles PLC (LON:CAMB)
Finals: Centralnic Group PLC (LON:CNIC); TyraTech Inc (LON:TYR)
AGM/EGM: Rightmove PLC (LON:RMV); William Hill PLC (LON:WMH)
Trading Statement: William Hill PLC (LON:WMH); Spirax-Sarco Engineering PLC (LON:SPX)
Wednesday 10 May
Interims: Compass Group PLC (LON:CPG)
Finals: Talktalk Telecom Group PLC (LON:TALK); Braemar Shipping Services PLC (LON:BMS); Warpaint London plc (LON:W7L)
AGM / EGM: Barclays PLC (LON:BARC); ITV plc (LON:ITV); Aviva PLC (LON:AV.)
Trading Statements: Novae Group PLC (LON:NVA); Vesuvius (LON:VSVS); National Express Group PLC (LON:NEX); ITV plc (LON:ITV); Barratt Developments PLC (LON:BDEV)
Thursday 11 May
Interims: Telefonica SA (LON:TDE); On The Beach Group Plc (LON:OTB)
Final:Porta Communications PLC (PTCM)
AGM / EGM; Royal Bank of Scotland Group (The) PLC (LON:RBS); Lloyds Banking Group PLC ORD (LON:LLOY)
Trading Statements: Coca-Cola HBC (LON:CCH);Vedanta Resources PLC (LON:VED); BT Group PLC (LON:BT.A); Derwent London (LON:DLN); SuperGroup PLC (LON:SGP); Amec Foster Wheeler PLC (LON:AMFW); Galliford Try plc (LON:GFRD); Mondi Plc (LON:MNDI)
Friday 12
Final: Hydrodec Group PLC (LON:HYR)
Trading statement: Provident Financial PLC (LON:PFG)