The week ahead is set to be food-heavy with corporate results from Domino’s Pizza (LON:DOM), Just Eat (LON:JE. and Restaurant Group PLC (LON:RTN).
The latest figures from all three companies are expected to show fewer people are eating out and instead tucking into take-away food.
Domino’s set for full-year delivery
Domino's Pizza is anticipated to serve up some tasty full-year results on Thursday with the food delivery group having already said it expects profit to be ‘slightly above’ estimates.
In a trading statement in January, Domino's said a good performance in the final few months of the year was backed up by strong growth in the prior quarter.
Domino’s sold £321.8mln worth of pizzas, dough balls and cookies in the three months to December 24 – an 18.2% year-on-year jump from the £272.4mln sold at the same stage in 2016.
The group saw its international sales also continue to grow strongly in the final quarter of 2017, climbing to £27.1mln from just £4.6mln in the same period a year earlier.
Just Eat also to prove tasty
It should also be another stellar showing from Just Eat in 2017 with the food delivery platform having enjoyed strong growth for many years since it floated in 2014.
In December Just Eat moved up to the FTSE 100 index following a third quarter update which showed revenues up 47% while full year profit guidance was raised to £515mln-£530mln from £500mln-£515m previously.
Investors will be keen to see if the UK business remains strong with the finals on Tuesday, but will also be looking at the group’s overseas operations.
Any hints of possible dividend payments will also be of great interest.
Restaurant Group being bitten by consumers eating out less
Restaurant Group's full-year numbers on Wednesday could be less appetising particularly with the sector in the spotlight recently as a result of some high profile closures, notably Prezzo this week.
Increased competition and consumers eating out less has made life tough for the Frankie & Benny’s, Garfunkel’s and Chiquitos’ owner leading to management instigating a strategic review, which is now complete.
Graham Spooner, investment research analyst at The Share Centre, thinks the areas for investors to concentrate on will be Restaurant Group’s costs, dividend policy and if volume momentum has been maintained.
Rolls-Royce's simplification in focus
Away from the food sector, Rolls-Royce Holding PLC (LON:RR) reports its full year results on Wednesday with its restructuring efforts the main focus.
Chief executive Warren East has been streamlining the business by reducing the number of divisions from five to three core units of aerospace, defence and power systems.
In its annual results, the company is expected to update the market its plan to simplify the business.
It may also reveal the outcome of its review into whether to sell its commercial marine business, which has been hit by weak demand in offshore oil and gas markets since 2015.
“Simplicity is the order of the day at Rolls. A lack of transparency arguably contributed to a series of profit warnings a few years ago, so we don’t blame CEO Warren East for trying to make things more straightforward,” said George Salmon, equity analyst and Hargreaves Lansdown.
“There should be financial benefits to streamlining too, as central and administrative costs come down.”
In January, Rolls-Royce confirmed that it was on track to meet in full year expectations. Deutsche Bank expects revenue to rise to £14.8bn from £13.7bn in 2016 and pre-tax profit to increase to £887mln from £813mln.
Dividend surprise eyed for L&G
Things don’t usually change all that quickly for life insurers but there are still several things worth keeping an eye out for in full-year results on Wednesday from blue chip firm Legal & General Group PLC (LON:LGEN), according to Hargreaves Lansdown.
At the half year, the group recognised £126mln of mortality releases, as life expectancy increased more slowly than had been anticipated, the analyst noted, and if that trend has continued that has the potential to provide a significant boost to profitability at the full year.
The group also announced an agreement to sell its Mature Savings business, with proceeds from the sale, something in the region of £650mln, set to be reinvested “in the attractive growth opportunities of Legal & General's core businesses”.
Details of exactly what that means have been low on the ground, but a closed book of annuity assets wouldn’t be a surprise given L&G’s recent expansion in that area.
However, it will be dividend growth that most interests many investors, Salomon added, with analysts currently forecasting a final dividend of something in the region of 15.3p, which would represent a 6.5% uplift on last year.
Hurricanes and tax cuts boost Ashtead
Equipment rental company Ashtead Group PLC (LON:AHT) has been benefiting from Donald Trump’s tax cuts and an increase in demand after hurricanes in the US.
Ashtead, which reports its third quarter results on Tuesday, has been involved in the rebuilding efforts after hurricane Harvey, Irma and Maria struck southern US and the Caribbean.
The need for emergency equipment boosted revenues in the first half, prompting the company to raise its full year expectations in December and launch a share buyback programme of between £500mln and £1bn over the next 18 months.
“Whilst we would anticipate that activity levels would normalise during the second half, post hurricane clean-up, we expect full year results to be ahead of our prior expectations,” chief executive Geoff Drabble said at the time.
UBS said: “After a strong H1, helped by hurricane recovery work, we expect a good Q3: we forecast Sunbelt yields +0% (Q2 +1% benefited from some one-off hurricane boost, but the underlying trend is still improving vs. Q1 -2%), and see volume growth of 17-18% (c5% M&A contribution, in-line with Q2).”
Newer technologies a focus for Inmarsat
Inmarsat Plc (LON:ISAT) has been a very disappointing performer in the last couple of years, mainly due to the weakness in the satellite operator’s Maritime division caused by the lower oil price, but other divisions have performed much better.
Improving government budgets and increased spending by airlines on in-flight broadband are key growth areas for the FTSE 250-listed group, and investors will be keen to hear with fourth-quarter results on Friday if customers are more welcoming now to adopting the newer technologies the group has offered.
With a high dividend yield, and given the difficult period Inmarsat has faced investors will hope that its management can carry on to reward investors with income growth.
Restructuring rewards wanted at G4S
Outsourcing group G4S PLC (LON:GFS) has also suffered a tough recently with a big decline in its share price since last spring, so investors will be hoping Thursday’s fourth-quarter results will show further signs of improvement as a result of its restructuring.
The FTSE 250-listed firm, whose Cash360 system allows retailers to outsource their cashing up process has been attempting to improve efficiency, cut costs and debt.
Analysts have been highlighting improvement in the group’s profit margins, productivity programs and especially demand for its automated cash handling business.
Premier Oil's Catcher field in the spotlight
As Premier Oil PLC (LON:PMO) releases its full year results on Thursday the attentions will be on cash flow generation, with investors waiting to see the pay-off from the group’s recent production growth thanks to the introduction of the Catcher field.
Premier’s production amounted to around 75,000 boepd during 2017, and Investec analyst Brian Gallagher is expecting 2018 output to come in at 82,000 boepd - the company’s own guidance is for 80,000 to 85,000 boepd.
Commentary around Catcher is expected to be key feature.
Investec rates Premier Oil as a ‘hold’. Gallagher, in a note, said: “In short, while we see improving cash flow generation in 2018E, valuation still remains full.
“With the recent trading update outlining full year operational numbers, we steer our focus to the detailed set of financials and analyst presentation on the day, which will provide further clarity on guidance for 2018 and beyond.”
Good things expected from Paddy Power Betfair
UBS analyst Chris Stevens is expecting Paddy Power Betfair plc (LON:PPB) to reveal full year revenue of around £1.7bn and £457mln of EBITDA earnings.
Adjusted earnings are forecast by UBS at around 380p per share, with the dividend anticipated at 190p.
The market is expecting good things from Paddy Power, particularly in the online operations.
However, last month, analysts at Morgan Stanley raised some caution whilst downgrading its view on the share to ‘underweight’.
The bank’s analysts reckon the market is expecting a “significant acceleration” in the group’s online revenue growth following the integration of the two formerly separate gambling businesses though, according to Morgan Stanley, the acceleration may not materialise.
“We see few silver linings from regulatory changes in Australia (and the 15% EPS hit not fully in consensus), and the company needs to address some major strategic issues (which may also limit balance sheet redeployment).
“These could all put pressure on the stock's premium valuation, and we see better returns elsewhere.”
Investors await insights around GVC's Ladbrokes takeover
Takeover talk will be the central narrative when GVC Holdings Plc (LON:GVC) releases final results on Friday.
In December, the gaming group agreed to buy rival Ladbrokes Coral Group PLC (LON:LCL.L) in a deal worth up to £4bn, creating one of the world’s largest sports betting firms.
The total payment for the acquisition is subject to the outcome of the government’s review into fixed-odds betting terminals (FOBTs) – there are proposals to cut the maximum bet on the machines from £100 to between £2 and £50.
Naturally then, investors will be looking for regulatory commentary, as well as insights around the Ladbrokes transaction.
In a preview note, Berenberg analyst Roberta Ciaccia highlighted that the gaming group’s shares are undervalued.
“We think investing in GVC is a little like playing an accumulator, ie a bet that links together several events, therefore allowing for higher odds than a single bet,” the analyst said.
“In our view, the new group deserves much more than the implied 2020E EV/EBITDA and adjusted P/E multiples of less than 10x (closest peers Paddy Power Betfair and Kindred trade at c40% premium on EV/EBITDA, over 70% on P/E).”
Express focus for Trinity Mirror
On the corporate front, newspaper publisher Trinity Mirror PLC (LON:TNI) will release its final results on Monday, days after completing the acquisition of the Daily Express and Daily Star newspapers from Richard Desmond’s Northern & Shell, although news of a Competition and Markets Authority probe and a 'hold separate order' into the deal on Friday somewhat soured any celebratory mood.
In a statement then, Trinity Mirror said It “continues to believe that there will be no reduction in media plurality as a result of the Acquisition, as each newspaper brand will continue with its current editorial positioning, and that there will not be any detrimental impact on competition as a result of the Acquisition.”
In its last trading update, accompanying the takeover news on 9 February 2018, the newspapers group said it anticipates its adjusted results for 2017 to be marginally ahead of consensus forecasts, while group revenue on a like-for-like basis is expected to fall by 9% year-on-year, broadly in line with the 9% decline it saw in the first half.
Consensus forecasts are for Trinity Mirror's 2017 pre-tax profits to be £119mln, with total revenue forecast at £622mln.
Trinity Mirror also said then that its 2018 performance so far had been in-line with market expectations, however, investors will be seeking comments on plans for the Northern & Shell titles, particularly given the CMA probe, and following recent news of the departures of the editors of both the Daily Express and the Daily Star.
Strong jobs bad for rate watchers
Away from the swatch of corporate news, the main economic focus of the week will be on the latest US jobs data.
It was the continued robustness of the US jobs market that led to sharp falls in stock markets at the beginning of February as markets feared that the continued strength of US employment meant that the Federal Reserve was more likely to increase interest rates at a pace which was faster than previously expected.
Last month, US non-farm payrolls increased by 200,000 and the unemployment rate held steady at 4.1%.
If the news on jobs continues to be good, the markets may engage in more selling particularly with new Fed boss Jerome Powell having already hinted that more US rate hikes than currently anticipated could be on the cards.
Significant events expected:
Monday March 5:
Finals: Trinity Mirror PLC (LON:TIM), Ultra Electronics Holdings PLC (LON:ULE), BATM Advanced Communications Ltd (LON:BVC), Microsaic Systems plc (LON:MSYS)
Interims: Abcam PLC (LON:ABC), MySale Group PLC (LON:MYSL)
Traffic stats: International Consolidated Airlines Group PLC (LON:IAG), Wizz Air PLC (LON:WIZZ)
Economic data: UK services PMI; US non-manufacturing ISM; US services PMI
Tuesday March 6:
Trading updates: Ashtead Group PLC (Q3) (LON:AHT), McCarthy & Stone PLC (LON:MCS)
Finals: Just Eat PLC (LON:JE.), Intertek Group PLC (LON:ITRK), Aggreko PLC (LON:AGGK), Bodycote PLC (LON:BOY), Cairn Homes PLC (LON:CRN), Escher Group Holdings PLC (LON:ESCH), Headland Group PLC (LON:HEAD), Huntsworth PLC (LON:HWG), Harworth Group PLC (LON:HEG), Ibstock Plc (LON:IBST), IWG PLC (LON:IWG), LoopUp Group PLC (LON:LOOP), LSL Property Services PLC (LON:LSL), MPAC Group PLC (LON:MPAC), Rotork PLC (LON:ROR), SDL Plc (LON:SDL), Silence Therapeutics PLC (LON:SLN), Yu Group PLC (LON:YU)
Interims: CAP-XX Limited (LON:CAPX), Craneware PLC (LON:CRW), Purecircle Limited (LON:PURE)
Economic data: US factory orders
Wednesday March 7:
Finals: Rolls-Royce Holdings PLC (LON:RR), Paddy Power Betfair plc (LON:PPB), Legal & General Group PLC (LON:LGEN), Restaurant Group PLC (LON:RTN), Anpario Plc (LON:ANP), Breedon Group PLC (LON:BRE), Bioquell PLC (LON:BQE), CLS Holdings PLC (LON:CLS), esure Group PLC (LON:ESUR), FDM Group Holdings PLC (LON:FDM), 4Imprint Group PLC (LON:FOUR), Hill & Smith Holdings PLC (LON:HILS), Lookers PLC (LON:LOOK), Microgen plc (LON:MCGN), PageGroup PLC (LON:PAGE), NMC Healthcare PLC LON:NMC), Ophir Energy Plc (LON:OPHR), Stock Spirits Group PLC (LON:STCK), Tritax Big Box REIT PLC (LON:BBOX), Tyman PLC (LON:TYMN), WANDisco PLC (LON:WAND)
Interims: 88 Energy Limited (LON:88E), Netcall plc (LON:NET), River and Mercantile Group PLC (LON:RIV), St Ives PLC (LON:SIV)
Trading updates: DS Smith PLC (LON:SMDS)
Economic data: Halifax UK house price survey; US ADP employment; US international trade; US Consumer credit; Federal Reserve Beige Book
Thursday March 8:
European Central Bank policy meeting outcome
Finals: G4S PLC (LON:GFS), Domino's Pizza Group PLC (LON:DOM), Aviva PLC (LON.AV.), Countrywide PLC (LON:CWD), Equiniti Group PLC (LON:EQN), Premier Oil PLC (LON:PMO), Spirent Communications PLC (LON:SPT), Alfa Financial Software Holdings PLC (LON:ALFA), Attraqt Group PLC (LON:ATQT), Capital & Regional PLC (LON:CAL), Communisis PLC (LON:CMS), Frontier Smart Technologies Group Limited (LON:FST), John Laing PLC (LON:LNGO)
Ex-dividends: To knock 8.3 points off FTSE 100 index - BHP Billiton plc (LON:BLT), CRH PLC (LON CRH), Evraz plc (LON:EVR), Land Securities PLC (LON:LAND), Persimmon PLC (LON:PSN), Shire Plc (LON:SHP), Standard Chartered PLC (LON:STAN)
Economic data: RICS UK housing market report; US weekly jobless claims; US Challenger job cuts;
Friday March 9:
Finals: Inmarsat Plc (LON:ISAT), GVC Holdings PLC (LON:GVC), SIG PLC (LON:SHI ), Eurocell PLC (LON:ECEL), Independent News & Media PLC (LON:INM)
Economic data: UK trade; UK industrial, manufacturing production; UK construction output; US non-farm payrolls; US wholesale trade