Although Monday will see the curtain come down on the UK bank’s latest reporting season, there will still be a financial flavour to the week’s corporate diary, with insurers Prudential PLC (LON:PRU) and Legal & General Group PLC (LON:LGEN), merged fund manager Standard Life Aberdeen PLC (LON:SLA), and investment platform group Hargreaves Lansdown PLC all joining HSBC PLC (LON:HSBA) on the results docket.
The global banking giant will put the sector’s first-half results season to bed with interims on Monday.
Investors will be keeping a close eye HSBC’s costs, which rose in its last update, although with the majority of its lending at variable rates, rising interest rates are a positive for income.
Any comments on the health of Asian markets and the impact of the US-China trade wars will also be of interest.
Expect further updates too on new CEO John Flint’s future restructuring plans regarding scaling back from certain markets and beefing up of others.
Pru doing the splits
Staying with financials, blue chip insurer Prudential’s full-year results in March were reasonably good but overshadowed by management’s plan to split the group up between the UK and its overseas operations.
This will take time, so investors will be seeking more clarification on the progress of this and execution timings when the Pru reports its interims on Wednesday.
Investors would also like to hear of updates to the business following some organisational changes, along with management moves.
Meanwhile, the group should continue to see good results from its international operations, while investors will also hope to see the dividend being raised to become more comparable to some of its peers.
Underlying growth seen at L&G
Blue-chip insurer Legal & General should report solid growth in underlying profit when it reports first half results on Thursday.
Analysts at UBS expect the insurer’s underlying operating profit to grow by 5% year-on-year driven divisionally by strong growth in its investment management business and less buoyant growth in annuities.
However, the Swiss bank sees L&G’s headline IFRS operating profit falling by 11% year-on-year to £882mln given the absence of any mortality reserve releases this time out,
The UBS analysts forecasts L&G paying an interim dividend of 4.61p, which they said would fall short of the around 7% growth rate the market expects for the pay-out.
Standard Life Aberdeen going with the flow
Half-year results from asset manager Standard Life Aberdeen will arrive roughly on the anniversary of the merger between Standard Life and Aberdeen Asset Management.
It will be a good time to take stock of how the combined business is progressing, especially considering Scottish Widows recently decided to withdraw £109bn of assets under SLA’s management due to competition concerns.
“When Aberdeen and Standard Life merged back in 2017, both were seeing significant outflows. Fast forward to the present day, and not much has changed,” George Salmon, equity strategist at Hargreaves Lansdown observed in a preview.
“In fact, we wouldn’t be surprised if outflows in the flagship GARS fund have increased. The fund has continued to deliver a poor investment performance, losing around 4%. A steady stream of outflows isn’t a great look for the group which is increasingly focused on asset management after the sale of its remaining life books,” Salmon said.
UBS has forecast half-year revenues of £1.61bn and gross operating profit of £536mln. It has pencilled in £491mln for the after-tax adjusted profit figure.
Platform show from Hargreaves Lansdown
Staying with financials, full-year results from blue-chip investment platform group Hargreaves Lansdown on Tuesday should also look strong
In a preview, analysts at Deutsche Bank said they expect the FTSE 100-listed firm to report full-year assets under management of £92.2bn, up 16% year-on-year, with net fund flows of £7.8bn, a 9.9% net inflow rate.
They expect this increase in assets to result in a 15% year-on-year uplift in revenues but on a slightly diminished margin.
However, the analysts pointed out that despite the concerns around the FCA's investment platform market study, Hargreaves Lansdown has continued to re-rate positively and is one of the strongest performers of the stocks they cover in the year-to-date.
However, even though they expect the group’s full-year numbers to show a continuation of recent trends, they now see Hargreaves Lansdown’s shares as being fundamentally expensive at current levels.
World and US focus for Paddy Power Betfair
In a different financial world, results statements from bookmakers, are typically punctuated by commentary on their book; essentially, what big results landed in whose favour and how much did that help or harm the house.
So with interim numbers from Paddy Power Betfair plc (LON:PPB) on Wednesday, obviously, we’ll be hearing about the World Cup and, perhaps most significantly, England’s unexpected charge all the way to the semi-final.
For shareholders, the hope will be that sufficient numbers piled onto the ‘it’s coming home’ bandwagon so that the company made a few quid. Many of the pre-tournament favourites (Germany, Brazil, Spain, and Argentina) crashed out prematurely, so that also bodes well for the performance of the sports book.
The interim results will also give shareholders further insights into Paddy Power’s ongoing expansion into the United States, after the US Supreme Court earlier this year opened up the sports betting market earlier this year.
Indeed, the London-listed bookmaker has already moved quickly by merging its US assets with fantasy sports firm FanDuel Inc (with PPB initially taking 61% of the joint company) back in July, before further bolstering US market access with a new partnership with Boyd Gaming in recent days.
Investors have yet to properly assess the scope of the US opportunity, so naturally it will be a key focal point when Wednesday’s outlook statement lands.
Check out InterContinental Hotels
Among other blue-chip numbers, half-year results from InterContinental Hotels Group PLC (LON:IHG) should make pleasant reading if it repeated has its strong first quarter performance in the second quarter.
The key metric for any hotel group is revenue per available room (RevPAR) and in the first quarter this was up 3.5% year-on-year, despite the timing of Easter, which had a negative impact in Europe and the Americas.
UBS expects RevPAR for the first half of 2018 will be up 3.6% on the first half of last year with the Americas broadly stable and China continuing to perform strongly. The story in EMEAA – Europe, Middle East, Asia and Africa – is likely to be a bit more subdued but on the recovery trail, UBS reckons.
The bank is forecasting revenues of US$2,057mln, up from US$1,964mln a year earlier, and underlying earnings (EBIT) of US$411mln, up from US$395mln.
TUI may see margins squeezed by UK heatwave
Third-quarter results from FTSE 100 travel giant TUI Group (LON:TUI) on Thursday should make for some good reading.
Analysts at UBS have forecast revenues for the period of around €5.3bn and underlying pre-tax earnings of €217mln.
However, they also forecast headwinds for late bookings in the fourth quarter as the hot weather across Europe meant customers would be less likely to book trips abroad.
Last quarter the travel company saw a 6.3% increase in revenues to €3.26bn from €3.07bn as growth in the cruises and holidays to the northern and central European regions offset declines in hotels and resorts, and the holiday and destination experiences divisions.
UBS also expects the group to maintain its guidance for the full year, where it is targeting an underlying earning (EBITA) growth rate of 10%.
Balanced growth at Bellway
Moving to the second line, FTSE 250-listed housebuilder Bellway PLC (LON:BWY) will give a trading update for the year to the end of July having already informed the market of some key metrics.
Housing revenue is expected to increase by more than 13% to £2.5bn while the group has flagged further volume growth with an anticipated 10.6% increase in the number of housing completions to 9,644.
The average selling price of homes sold rose by 2.9% to a record £260,000 and analysts will be keen to see if the rising trend continued in July.
The market is expecting revenues, including land sales, of £2.89bn and pre-tax profit of £635.1mln; earnings per share are tipped to clock in at 418.21p.
UBS has predicted underlying earnings (EBIT) of £644mln at a margin of 22.3% and pre-tax profit of £633mln.
The trading update will be the first since Jason Honeyman took over as chief executive officer on August 1.
He may have only had his feet under the desk for a few days but he has been with the company since 2005 and had been chief operating officer since September 2017 so he knows the company well.
UBS expects Honeyman to confirm Bellway’s “balanced growth” strategy.
Stable interims seen for G4S
The market will be hoping for further signs that restructuring and investing in efficiency programs at G4S PLC (LON:GFS) has continued to show through when the outsourcing firm reports its interims on Thursday.
Investors will be expecting a return to revenue growth which fell over the first quarter, and any update on technology led services and its Cash360 system will also be worth noting.
Analysts at UBS expect the FTSE 250-listed firm to report first-half organic growth of 0.5% and forecasts its underlying earnings (EBITA) at £222m
They said: “We expect a relatively stable 1H report little surprises but expect G4S to emphasise the growth acceleration ahead as Middle East & India begins to begin up. Commentary on a strong CASH360 pipeline should also be reassuring.”
Domino’s hoping for World Cup boost
The UK & Irish branch of the global pizza chain, Domino’s Pizza Group PLC (LON:DOM) will release its interim results on Tuesday.
The results will be the first since the departure of chief financial officer Rachel Osborne stood down in June.
The results are also likely to be watched for a speed up in like-for-like sales growth in the second quarter as severe weather caused by ‘the Beast from the East’ dragged on the group’s sales in the UK and Ireland.
Investors will also be looking for any signs of a sales boost from the hot weather and England’s better than expected performance in the world cup tournament, which contributed to a bumper first half for Domino’s Polish license holder DP Poland (LON:DPP).
Cineworld hoping for blockbuster sequel
FTSE 250 cinema chain Cineworld Group plc (LON:CINE) will be hoping to continue its strong run as it reports its interim results on Thursday.
The firm will be looking to build on a strong performance from January to May in which the success of Marvel’s ‘Black Panther’ and ‘Avengers: Infinity War’ boosted its revenues by 6.7%.
With the release of summer blockbusters such as ‘Incredibles 2’ and ‘Jurassic World: Fallen Kingdom’ in the intervening months, investors will be hoping the company has not fallen victim to the hot weather driving customers away from indoor entertainment venues, a fate that recently befell attractions owned by Merlin Entertainments (LON:MERL).
Shareholders may also be keeping an eye out for a potential boost from Regal Entertainment, which Cineworld acquired in February for US$3.5bn.
Growth data eyed
The main focus on the data front will be the preliminary reading for UK second quarter GDP on Friday, with expectations that economic growth during the period will have been higher than the first quarter where severe weather conditions had their part to play.
Other economic indicators during the second quarter have been pointing towards a bounce back in growth, with consensus forecasts for GDP of 1.4%.
This would be supported by the first of the monthly figures that were recently published for May, and a strong number will have justified the Bank of England’s 0.25% interest rate rise and cement the belief that the weakness in the first quarter was just a blip.
Aside from the GDP numbers, UK industrial and manufacturing production data are also due out on Friday, with both expected to jump by 1.9% year-on-year during June, possibly partly supported by a weaker sterling.
However, UK construction activity is expected to once again lag behind and possibly fall by 0.5% while housebuilding activity moderates.
Significant announcements expected this week:
Monday August 6:
Interims: HSBC Holdings PLC (LON:HSBA), Fidessa Group PLC (LON:FDSA), Ultra Electronic Holdings PLC (LON:ULE), SDL Plc (LON:SDL), Synthomer PLC (LON:SYNTS)
Finals: Omega Diagnostics Group Plc (LON:ODX)
AGM: Solo Oil (SOLO)
Traffic numbers: Wizz Air PLC (LON:WIZZ)
Tuesday August 7:
Finals: Hargreaves Lansdown PLC (LON:HL.)
Interims: InterContinental Hotels PLC (LON:IHG), Standard Life Aberdeen PLC (LON:SLA), Meggitt plc (LON:MGGT), Domino’s Pizza Group PLC (LON:DOM), Old Mutual Limited (LON:OML), Intertek Group PLC (LON:ITRK), Rotork PLC (LON:ROR), T Clarke PLC (LON:CTO), Verona Pharma PLC (LON:VRP), Zotefoams Plc (LON:ZTF)
Economic data: Halifax UK house prices; US JOLTS jobs; US consumer credit
Wednesday August 8:
Interims: Prudential PLC (LON:PRU), Paddy Power Betfair plc (LON:PPB), Glencore PLC (LON:GLEN), PageGroup PLC (LON:PAGE), Hastings Group PLC (LON:HSTG), Hill & Smith Holdings PLC (LON:HILS), Morgan Sindall Group PLC (LON:MGNS), Mereo BioPharma Group Plc (LON:MPH), Share plc (LON:SHRE), Stocks Spirits Group PLC (LON:STCK), Spirax-Sarco PLC (LON:SPX), TI Fluid Systems PLC (LON:TIFS)
Trading update: Bellway (Q4) (LON:BWY), UDG Healthcare PLC (Q3) (LON:UDG)
Economic data: US crude oil inventories, US MBA mortgage applications
Thursday August 9:
Trading update: TUI AG (LON:TUI)
Interims: Legal & General Group PLC (LON:LGEN), G4S PLC (LON:GFS), Coca-Cola HBC PLC (LON:CCH), Randgold Resources PLC (LON:RRS), Cineworld Group (LON:CINE), Derwent London PLC (LON:DLN), Savills PLC (LON@SVS), Ibstock Plc (LON:IBST), Tritax Big Box Retail PLC (LON:BBOX)
AGM: Premier African Minerals Ltd. (LON:PREM)
Ex-dividends: AstraZeneca PLC (LON:AZN), BT Group plc (LON::BT.A), Diageo plc (LON:DGE), GlaxoSmithKline plc (LON:GSK), Royal Dutch Shell PLC (LON:RDSA)
Economic data: US weekly jobless claims; US forward PPI; US wholesale inventories
Friday August 10:
Interims: Afrak Group PLC (LON:AFRK), Vitec Group PLC (LON:VTC)
Trading update: Volution Group (LON:FAN)
Economic data: UK Q2 GDP, RICS UK house prices; UK construction output; UK balance of trade; US CPI inflation