Irish building materials group CRH is expected to report like-for-like sales growth in its interims on Thursday.
The group’s profitability is strongly linked to the health of the global economy, in particular, the US and European housing and construction activity, and recent results have highlighted continuing demand from the US.
The group recently announced initiatives aimed at improving margins and cash generation along with a review of its European operations, and its view on future infrastructure spend will be worth noting.
Analysts at UBS said they expect the Irish firm to report first-half like-for-like sales growth of 1.4% to €11.984bn, with underlying earnings (EBITDA) rising by 1.3% to €1.096bn.
The analysts also said they expect CRH to provide “more granularity of how the recently announced margin targets will be achieved" and expects second-half guidance like for like sales growth guidance of 5.7%.
Playtech suffering from Asian flu
Away from the blue-chips, FTSE 250-listed gaming software group Playtech PLC (LON:PTEC) has endured something of a difficult year, issuing a pair of profit warnings that have resulted in the market capitalisation almost halving, although its €846mln acquisition of Italian rival Snaitech provided some better news.
After several years of above-market growth, struggles in Asia have snapped its winning streak. As a result, the price-to-earnings ratio has fallen to around 9. Prior to last month’s warning, the stock hadn’t traded below 10 times earnings for six years, according to Hargreaves Lansdown.
Given Playtech’s troubles in Asia, a more favourable outlook in the region and a decent start for the recently acquired Italian business could make the shares start to look good value. These are the two areas the market will be looking at in Thursday’s half-year report.
OneSavings Bank struggling in a tough mortgage lending market
Elsewhere on the second line, OneSavings Bank PLC (LON:OSB) posts its first-half results and analysts expect margins to come under pressure amid a tough mortgage lending market.
Analysts at RBC Capital Market predict the challenger bank’s net interest margin – a key measure of lenders’ profitability – to fall to 3.0% in the first half from 3.16% a year ago due to “additional balance sheet liquidity from Term Funding Scheme (TFS) funds and tight mortgage spread conditions”.
OSB said it was confident of delivering “at least mid-teens net loan book growth” this year. RBC is forecasting 22% year-on-year growth in net loans to £7.9bn for the first half.
“Our numbers assume a slowdown in growth in the second half to 16% year-on-year for the full year. We expect the investment in residential to lead to additional growth in 2019, but not 2018.”
RBC expects the interim dividend to be raised 22% to 4.3p. OSB has guided to a pay-out ratio for the full year of at least 25%.
Significant announcements expected
Finals: Arcontech Group PLC (LON:ARC)
Interims: CRH PLC (LON:CRH); Playtech PLC (LON:PTEC), Anglo Pacific Group PLC (LON:APF), 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), Sportech plc (LON:SPO)
Ex-dividends: Carnival PLC (LON:CCL), Croda International PLC (LON:CRDA), Imperial Brands PLC (LON:IMB), London Stock Exchange Group PLC (LON:LSE), Mondi Plc (LON:MNDI) , Paddy Power Betfair plc (LON:PPB), Prudential PLC (LON:PRU), Royal Bank of Scotland Group PLC (LON:RBS)
Economic data: CBI distributive trades survey; US weekly jobless claims; US new home sales; US flash composite PMI