Banks will be front and centre on Tuesday with the Bank of England set to release its latest stress tests for the sector, a key indicator introduced following the 2008 financial collapse.
The central bank’s tests determine whether banks have a strong enough balance sheet to withstand further financial shocks or whether further capital bolstering is required.
In a preview, Credit Suisse’s analysts said they think the tests will be “most important” for Lloyds Banking Group PLC (LON:LLOY) and Barclays PLC (LON:BARC).
While the Swiss bank thinks majority state-owned lender Royal Bank of Scotland Group PLC (LON:RBS), which failed last year’s stress tests, should see mitigation this time from lower litigation stress after the lender set aside a US$3.3bn provision for outstanding US fines related to the mis-selling of residential mortgage-based securities.
Speciality retailers also highlighted
Away from the banks, a couple of speciality retailers will provide the other main interest, with updates due from both Topps Tiles Plc (LON:TPT) and Pets at Home PLC (LON:PETS).
Topps has already warned that its full year profits will be at the lower end of the range of market expectation, so no more nasty surprises are expected when the numbers are released today.
The tile specialist said in October that its revenues for the year to 30 September 2017 were expected to fall to £211.6mln from £215mln last year.
Chief executive Matthew Williams blamed “tougher market conditions” for the weaker revenues and said the company was taking a “prudent view” for the year ahead.
The company has been taking steps to strengthen its position in the market through its so-called ‘Out-Specialising the Specialists’ strategy. Strategic initiatives have included improving its customer offering in online and stores, launching new tile ranges, offering a rewards loyalty scheme for traders and completing a takeover of a small commercial tile business.
Investors will be keen to hear more on the company’s strategy to overhaul the business in its full year results.
Pets at Home to see progress
By contrast, back In August, Pets at Home reported a solid first quarter trading update, with Merchandise like-for-like sales (LFLs) continuing to show an improved trend at +1.5%.
In a preview, analysts at Numis Securities noted that this reflected an encouraging volume reaction to the price investments undertaken since the turn of the year, further strong progress in omnichannel, and growth in the expanded subscription services following the launch of Frontline Plus.
They expect another solid quarter of LFLs from Pets at Home, also up 1.5% again and retain a positive stance on the group encouraged by the price repositioning being undertaken in Merchandising, and significant long-term growth opportunity in the roll-out and maturity of the Services division.
Elsewhere, pigs producer Cranswick plc (LON:CWK) should also bring home the bacon, according to Numis, which expects the group to deliver around 20% sales growth in its first half reflecting the combination of new business wins and higher inflation.
However, the higher cost of pigs, which rose by 28% during the period, will likely reduce margins and therefore it anticipates adjusted pretax profit growth of 8% to £41.1mln.
Significant events expected on Tuesday November 28:
Finals: Gooch & Housego PLC (LON:GHH), Greencore Group PLC (LON:GNC), ITE Group PLC (LON:ITE), Shaftesbury PLC (LON:SHB), Sanderson Group PLC (LON:SND), Treatt PLC (LON:TET), Topps Tiles PLC (LON:TPT), Urban & Civic PLC (LON:UNAC), UDG Healthcare PLC (LON:UDG)
Interims: Acal Plc (LON:ACL), BCA Marketplace PLC (LON:BCA), Cranswick PLC (LON:CWK), D4t4 Solutions PLC (LON:D4T4), GB Group PLC (LON:GBG), IG Design Group PLC (LON:IGR), KCOM Group PLC (LON:KCOM), Pets at Home Group PLC (LON:PETS), Park Group PLC (LON:PKG), Scholium Group Plc (LON:SCHO), ULS Technology PLC (LON:ULS)
Economic data: Nationwide house price index; Bank of England Financial Stability report; US international trade in goods; US FHFA house price index; US Conference board consumer confidence