The last of the blue-chip banking results for 2017 will be released on Tuesday - following last week’s numbers from HSBC PLC (LON:HSBA), Barclays PLC (LON:BARC), Lloyds Banking Group PLC (LON:LLOY), and Royal Bank of Scotland Group PLC (LON:RBS) - with Standard Chartered PLC (LON:STAN) the final lender out of the traps.
The emerging markets-focused bank has seen profits rebound and loan impartments drop dramatically, but its last numbers disappointed because of its failure to reinstate the dividend.
Michael Hewson, chief market analyst at CMC Markets UK said: “It is showing all the right signs of returning to health, but shareholders always appreciate a cash return.”
He added: “Lloyds and Barclays have promised to beef up their dividends, will Standard Chartered look to follow suit and bring back its dividend.”
Costs a focus for Persimmon
Updates from UK housebuilders will be the focus this week with Persimmon PLC (LON:PSN) first up on Tuesday, having already tipped the wink that revenues in 2017 were £3.42bn, driven by a 6% increase in volumes and a 3% rise in the average selling price, with the market expecting pre-tax profit of £972mln.
In a preview, analysts at retail investor-focused broker, The Share Centre said: “While investors expect profitability to have risen well too, we know that housebuilders are facing increasing costs related to finding skilled labour and increased material prices.”
They added: “The group has strong cash balances for which investors will expect more returned via increased dividends and capital returns. Investors will also eagerly await the size of the forward order book and footfall to showrooms in the latest few weeks given the rising interest rate (although modest) environment faced in the UK,” it added.
Special divi focus for Direct Line
FTSE 100-listed insurer Direct Line Insurance Group PLC (LON:DLG) will also report full-year numbers, but as it has already pre-announced headline pre-tax profit for 2017, which was ahead of market expectations, the main focus is likely to be on the size of any special dividend.
Numis Securities analysts are forecasting a special dividend of 13.1p, which is based on management reducing the Solvency II capital ratio into the middle of the target range of 160-180%.
In a preview, they said: “We expect DLG to post improved customer growth in motor and commercial, whilst home is likely to remain challenging.
“Current guidance is for a medium term combined ratio of 93-95% with 2-3% business growth. We think the shares are somewhat overlooked and we see good upside potential as recent initiatives begin to enhance growth.”
GKN results to continues its fight against hostile bid
Blue chip automotive and aerospace parts group GKN PLC (LON:GKN), which last month rejected a second takeover bid from Melroe Industries PLC (LON:MRO), saying it "fundamentally unvalued" the company, will try and bolster its defence case with its full-year numbers
Melrose has taken its bid hostile, arguing that the real value uplift from the proposed acquisition will come from creating an enlarged business worth £11bn.
In an effort to defend itself against the bid, GKN has appointed Anne Stevens as its new chief executive to lead its so-called ‘Project Boost’ strategy to improve its financial performance.
As part of the strategy, the engineer will split its aerospace and automotive divisions into two and plans to return £2.5bn to shareholders over the next three years.
“The Project Boost strategy may only be weeks old, but this is GKN’s opportunity to convince shareholders it’s serious about making the necessary changes,” said George Salmon, equity analyst at Hargreaves Lansdown.
Things can only get better for Provident Financial
Door-step lender Provident Financial Group PLC (LON:PFG) could unveil a £500mln rescue cash call when it reports its full-year on Tuesday, according to weekends press reports, as its new chief executive officer Malcolm Le May attempts to steady the ship.
Le May joined the company as PFG’s chairman in November of last year but took over as CEO after the second profit warning did for the unfortunately named Peter Crook in August.
The troubled company has been hit by unresolved problems at its door-to-door lending business, with the group's woes compounded by Financial Conduct Authority (FCA) investigations into two of its units.
The group said at the beginning of February that since its trading update on January 16, its home credit division had continued to make good operational progress; admittedly, that barely covers a two-week period but Provident shareholders will take any good news they can get at the moment.
Significant events expected on Tuesday February 27:
Finals: Standard Chartered PLC (LON:STAN), Croda International PLC (LON:CRDA), Dalata Hotel Group Plc (LON:DAL), Derwent London PLC (LON:DLN), Direct Line Insurance Group PLC (LON:DLG), Drax Group PLC (LON:DRX), FBD Holdings PLC (LON:FBH), Fresnillo PLC (LON:FRES), GKN PLC (LON:GKN), Greggs plc (LON:GRG), Inchcape PLC (LON:INCH), Johnson Service Group plc (LON: JSG), Jupiter Fund Management PLC (LON:JUP), Meggitt plc (LON:MGGT), Persimmon PLC (LON:PSN), Provident Financial Group PLC (LON:PFG), Virgin Money Group PLC (LON:VM.)
Interims: Bluefield Solar Income Fund Limited (LON:BSIF), Clinigen Group PLC (LON:CLIN), DotDigital Group PLC (LON:DOTD), Swallowfield plc (LON:SWL)
Economic data: US durable goods orders; US international trade in goods; US FHFA house price index