The final full trading week of August is never expected to see a flood of corporate news, but at least there will be a smattering of blue chip numbers for investors to get their teeth into after a fairly lean period.
Housebuilder Persimmon PLC (LON:PSN) is expected to deliver a strong set of first half figures on Tuesday, having already said trading was “excellent” during the period even in the face of political uncertainty.
In a trading update last month, the FTSE 100-listed company said customer demand in the first half held up despite an unclear economic outlook, the snap UK general election and Brexit worries.
READ: Persimmon lauds "excellent" first half trading
The firm increased legal completion volumes by 8% to 7,794 new homes, up from 27,238 at the same stage in 2016. Its average selling price improved by 3.5% to around £213,000, up from £205,762 last year, helping revenue grow by 12% to £1.66bn.
Persimmon also said there was good momentum going into the second half and expected to raise its full-year 2017 pre-tax profit forecasts for the housebuilder by at least 9%.
Nicholas Hyett, equity analyst at Hargreaves Lansdown, said with the trading update already giving an outline of what’s to come in the first half results, the focus will be on the outlook.
He noted: “If there is to be a spanner thrown into the works, it will likely come from the group’s comment around current conditions, which are looking slightly more precarious.
“Surveys from The Royal Institution of Chartered Surveyors, Nationwide and Halifax have, to varying extents, all painted a gloomier picture for UK house price growth.“
Data from the Office for National Statistics this month also showed a slowdown in UK house price growth in June, driven by London and the South East of England.
But even though the market has slowed, prices are still growing due to the shortage of properties and low interest rates, lending support to housebuilders such as Persimmon.
Business as usual for BHP Billiton
The world’s biggest miner BHP Billiton PLC (LON:BLT) reports its full-year results on Tuesday as the Anglo-Australian group carries on with business as usual in the face of pressure for change from activist investor Elliott Management.
Earlier this year, New York-based fund Elliott - which this week revealed it has hiked its holding in BHP Billiton to 5% - urged the miner to consider some radical moves to unlock shareholder value, including a scrapping of its dual-corporate, Anglo-Australian structure, the demerger of its oil business and a rejigging of its capital return policy.
In a production update published on July 19, BHP Billiton said it was on target to meet its full-year guidance after reporting an 8% rise in its fourth quarter iron ore output, and increased its target for the current year.
In a preview of the full year numbers, analysts at Deutsche Bank forecast the FTSE 100-listed firm posting underlying earnings (EBITDA) of US$20.3bn and expects cash flow from operations of US$14.6bn after tax and interest.
They also predict a US$1.7bn half-on-half reduction in net debt to US$18.3bn, and forecast a final dividend of 46 US cents, up from the 40 US cents paid a year earlier.
The analysts said that, aside from the numbers, they will also be focused – among other things - on indications of a revamped strategy, focusing on returns with targets; progress on growth and latent capacity projects; and updates on US Onshore divestments or other potential asset sales.
Additional information on the Samarco dam disaster in Brazil will also be eyed, including any update on the civil claim bring pursued, the Deutsche Bank analysts added.
Copper focus for Antofagasta
On the same day as BHP’s finals, fellow blue chip miner Antofagasta PLC (LON:ANTO) will unveil its first half results, although the numbers from the Chilean-focused copper group are unlikely to surprise given it only issued an update a few weeks ago.
On July 26, Antofagasta said its first-half production rose by 7.1% and kept its full-year cost and output guidance unchanged after talks to avert strike action at its mines.
The company said full-year production was still expected to be between 685,000 and 720,000 tonnes, unchanged from a forecast from the beginning of the year, although output would be higher during the second half.
It also kept its forecast for costs unchanged, with cash costs before credits for by-products expected to be US$1.55 per pound and net cash costs of US$1.30 per pound.
Oilers in focus too
FTSE 250 oiler Premier Oil PLC (LON:PMO) has not been short of headlines in recent months and Thursday sees the release of its interims.
Of certain interest will be any news on an impending new financing deal which is said to be on the way after a huge restructuring of the North Sea focused firm's US$2.8bn of debt.
A recent operational highlight, of course, was the new discovery offshore Mexico, with the Zama-1 well unearthing an estimated 1 bn barrels.
Next moves at this project will be of interest along with news of the start of production at the Catcher field - possibly in December this year.
The first half was said to be 'strong' for the group, with production ahead of guidance at 82,100 barrels of oil equivalent per day (boepd) and positive cash flow, which allowed it to reduce net debt, so the financials next week will be closely scrutinised.
Meanwhile, fellow oil mid cap Cairn Energy PLC (LON:CNE) has now completed its five drill programme offshore Senegal, where the latest well was a success, and traders are sure to hear about further plans here in interims next Tuesday.
Also of interest will be how Cairn sees its strategy developing for the rest of the year and where it sees the oil price and wider market heading.
The SNE North 1 well hit oil and gas in its primary target, and excitingly, in a deeper oil discovery in a second target. It marked another of several successes for the group in Senegal.
Wide implications from WPP numbers
The performance of WPP PLC (LON:WPP) is often seen as a proxy for the global economy, so results from the marketing giant have wide implications.
The shares are down 13% year-to-date, which does not bode well for the state of the economy, although there have been some factors specific to WPP that have acted as a drag on share price performance.
One of those factors was the malware attack in June that hit a lot of the group’s agencies.
WPP said its emphasis on restoring services would not only be on speed, but also on safety, but almost two months later it would be good to know that normal service has been resumed.
“These results will provide a valuable insight into trading and operational developments at a time when confidence in the outlook for advertising spend appears to be faltering,” said Shore Capital.
“Our more cautious mind-set also reflects comments from senior advertising industry players suggesting that the trend for brands to review agency relationships on a more frequent basis is here to stay and that marketing executives are currently exhibiting a more reticent and short-term approach to committing their budgets,” the broker said.
WPP’s half-year revenue is expected to be in the region of £7.5bn while analysts have pencilled in 45.7p for earnings per share, and 22p for the dividend.
Significant events expected on:
Monday August 21
Interims: Global Ports Holdings PLC (LON:GPD), Headlam Group PLC (LON:HEAD), TBC Bank Group PLC (LON:TBCG)
Economic data: UK public sector finances, CBI industrial trends
Tuesday August 22
Finals: BHP Billiton PLC (LON:BLT)
Interims: AFI Development PLC (LON:AFRB), Antofagasta PLC (LON:ANTO), Cape PLC (LON:CIU), Cairn Energy PLC (LON:CNE), Empresaria Group PLC (LON:EMR), Hostelworld Group PLC (LON:HSW), Inspired Energy PLC (LON:INSE) Kenmare Resources PLC (LON:KMR), Persimmon PLC (LON:PSN), Quantum Pharma PLC (LON:QP.), John Wood Group PLC (LON:WG.)
Economic data: CBI industrial trends report
Wednesday August 23
Finals: Laura Ashley Holdings PLC (LON:ALY)
Interims: Anglo Pacific Group PLC (LON:APF), Candover Investments PLC (LON:CDI), Costain Group PLC (LON:COST), Hansteen Holdings PLC (LON:HSTN), Vedanta Resources PLC (Q1) (LON:VED), WPP PLC (LON:WPP)
Thursday August 24
Interims: Avocet Mining PLC (LON:AVM), Camelia PLC (LON:CAM), CRH PLC (LON:CRH), Hunting PLC (LON:HTG), John Laing Group PLC (LON:JLG), Macfarlane Group PLC (LON:MACF), OneSavings Bank PLC (LON:OSB), Phoenix Group Holdings PLC (LON:PHNX), Premier Oil PLC (LON:PMO), Playtech PLC (LONLPTEC), Sportech PLC (LON:SPO)
FTSE 100 ex-dividends: Carnival PLC (LON:CCL), London Stock Exchange Group PLC (LON:LSE), Mondi PLC (LON:MNDI), Paddy Power Betfair PLC (LON:PPB), Prudential PLC (LON:PRU)
Economic data: UK second reading Q2 GDP; CBI distributive trades; US weekly jobless
Friday August 25
Finals: ITM Power PLC (LON:ITM)
Interims: Henry Boot PLC (LON:BOOT)
Economic data: US durable goods orders