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Blue-chip corporate update mill to continue to grind, with RBS and AstraZenca to the fore

Aside from all the company news, the Week Ahead also brings the latest UK inflation and GDP growth data for investors to digest, while the Brexit saga will continue to roll on

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The blue-chip corporate update mill will continue to grind over the coming week, with Royal Bank of Scotland Group PLC (LON: RBS) kicking off the lenders reporting season and AstraZenca PLC (LON:AZN) continuing the drug firm’s results.

Aside from the company news, investors will also have the latest UK inflation and GDP growth data to digest, while the Brexit saga will continue to roll on, as will the US government shut-down stand-off.

Improvement eyed at RBS

RBS kick-starts the full-year results season for the UK banks on Friday, with the majority taxpayer-owned lender having recently got shareholder approval to buy-back shares directly from the UK government.

At 62.3%, the UK taxpayer is still the bank’s single largest shareholder, and it will be years before that holding is fully unwound, nonetheless, a regular share buy-back would represent a major step forward.

Friday’s full year results will be an important measure of how much things have improved for RBS, although growth seems to be slowing across the sector, although low interest rates and high levels of employment should mean that bad loans issues remain subdued.

Brexit remains a cloud on the horizon, and analysts expect the bank to strike a cautious note in its outlook, however, with markets now pricing in a UK rate rise before the end of the year – a boost to margins for the banking sector - the longer term outlook for RBS is looking rosier than it has for a long time.

AstraZeneca products sales to return to growth

For the first time in what feels like forever, AstraZeneca should see product sales return to growth in Thursday’s full-year results.

The FTSE 100 drugs giant has suffered in recent years a several of its blockbusters, such as cholesterol drug Crestor, lost their patent exclusivity.

But Astra expects to report a “low single-digit percentage increase” for 2018, and its third-quarter results showed it was on course to do just that, with product sales up 2% in the first nine months.

It has successfully re-built its drug pipeline of late, particularly in oncology, and big things will be expected from Tagrisso, Imfinzi and Lynparza – three relatively new cancer drugs.

A flurry of recent positive data and new approvals from European and US regulators should make for a bright 2019 outlook, too.

Indivior to assess Suboxone damage

Staying with drugs, Indivior PLC’s (LON:INDV) long-running battle to protect its blockbuster opioid addiction treatment from generic competition seems to be coming to a painful close.

Indian giant Dr Reddy’s is free to start selling its cut-price version of Suboxone on Monday (11 February) after a US appeals court rejected Indivior’s claim that it infringes on its patents.

Chief executive Shaun Thaxter warned earlier this month of a “potential material and rapid loss of market share” as a result of the copycat’s launch.

In Thursday’s full-year results, investors will want to see if Indivior can put an exact figure on that damage – both to its market share and to its sales and profits forecasts.

A keen eye will also be cast upon Sublocade, a once-monthly injection that the FTSE 250 drug maker has been trying to groom as Suboxone’s patent-protected successor.

Sales were hardly through the roof last year, but hopes are still high, and shareholders will want to see a surge in demand in 2019.

Investors look for some fizz in Coca-Cola HBC’s finals

Back with the blue chips, Coca-Cola HBC PLC (LON:CCH) gave an upbeat assessment in its third-quarter results in November, saying it expected an “acceleration” in price/mix growth in the final quarter.

Investors will be hoping the sweetness has been maintained over the final months, with analysts at The Share Centre expecting “growth in revenue and profit margins”.

“The shares have risen strongly in recent months as investors have seen the company avoid a significant impact from the new UK sugar tax and enjoy success with low-sugar and energy drinks” analysts said, adding that growth in developing markets such as Poland has helped lift the company’s earnings, so any change in this outlook with be eyed.

What will Tullow’s reinstated divi look like?

Investors already know most of what Tullow Oil plc (LON:TLW) bosses will say in Wednesday’s full-year results.

An update back in January confirmed a 2018 production rate of 88,200 barrels of oil per day, in line with expectations, while we also know that revenue amounted to US$1.8mln.

With the expectation of a material improvement in profits as well, there is eager anticipation of what the reinstated dividend will look like.

Tullow is likely to double-down on its estimate that production to rise to between 93,000-101,000 barrels of oil per day in 2019, boosted by seven new wells in Ghana.

Two new field developments in Uganda and Kenya could get the green light this year, although no firm decisions have been made on those yet.

In terms of exploration, the highlight will likely be a drill programme offshore Guyana where three wells are planned in “high potential acreage”.

Dunelm improvement expected after strong Christmas update

Moving to the second line, Dunelm will be looking to build on a strong set of Christmas numbers on Wednesday when it reports its results for the first half.

In early January, the homeware retailer said full-year profits would be at the top end of forecasts, estimated first-half pre-tax profits at £70mln, up from £60mln a year ago.

However, the firm had also cautioned on its outlook given uncertainty facing UK consumers, so any alteration or negative turn to this will be closely watched.

BoE inflation target could be hit in January

On the macro front, the first consumer price index reading for 2019, due on Tuesday, is expected to continue the downward trend from December 2018 and potentially hit the 2% year-on-year target of the Bank of England’s Monetary Policy Committee, which was last reached back in early 2017.

The fall back in oil prices since the summer will continue to have a downward impact on transport costs in January, while price caps on energy bills should also have a limiting impact on prices rises.

The week’s other important UK data will almost certainly have a Brexit flavour to them, with fourth-quarter GDP growth and December manufacturing and industrial production numbers all due on Monday.

Expectations are that all the Brexit uncertainty and withholding of investment spending will see the UK growth rate in the final quarter of 2018 at half of that seen during the third quarter, with the year-on-year figure moderating to 1.4%.

Meanwhile, the year-on-year figures for industrial and manufacturing figures are also expected to reflect lower activity, but, as with have seen with some other economic indicators, manufacturing in December is actually expected to rise as companies stock up on inventories to insure against the most undesired No Deal Brexit outcome.

Significant announcements expected for week ending February 15:

Monday February 11

Finals: Acacia Mining PLC (LON:ACA)

Trading updates: UP Global Sourcing Holdings PLC (LON:UPGS)

Economic data: UK GDP monthly/quarterly estimate; UK trade data; UK industrial, manufacturing production; UK construction output; US consumer inflation expectations

Tuesday February 12:

Trading update: TUI AG (Q1) (LON:TUI), The AA PLC (LON:AA.), Loop-up Group PLC (LON:LOOP)

Interims: Plus 500 Limited (LON:PLUS), A&J Mucklow Group PLC (LON:MKLW)

Economic data: US NIFB business optimism

Wednesday February 13:

Finals: Tullow Oil (LON:TLW), Smurfit Kappa Group PLC (LON:SKG)

Interims: Dunelm Group PLC (LON:DNLM), Galliford Try plc (LON:GFRD), Oncimmune Holdings PLC (LON:ONC)

Economic data: UK CPI, RPI, PPI, HPI inflation; US CPI inflation

Thursday February 14:

Finals: AstraZeneca PLC (LON:AZN), Coca Cola HBC PLC (LON:CCH), Indivior PLC (LON:INDV), Micro Focus International PLC (LON:MCRO), ConvaTec Group PLC (LON:CTEC), Moneysupermarket PLC (LON:MONY), Lancashire PLC (LON:LRE), Attraqt Group PLC (LON:ATQT)

Interims: Ashmore group PLC (LON:ASHM), MJ Gleeson PLC (LON:GLE), Grit Real Estate Income Group Limited (LON:GR1T)

Trading updates: Trifast PLC (LON:TRI), Safestore PLC (Q1) (LON:SAFE), UK Commercial Property REIT (LON:UKCM)

FTSE 100 ex-dividends: BP PLC (LON:BP.), Hargreaves Lansdown PLC (LON:HL.), Royal Dutch Shell PLC (LON:RDSA) (LON:RDSB), Unilever plc (LON:ULVR)

Economic data: RICS housing market survey; US weekly jobless claims; US PPI

Friday February 15:        

Finals: Royal Bank of Scotland Group PLC (LON:RBS), SEGRO PLC (LON:SGRO)

Trading update: Ocean Outdoor Limited (LON:OOUT)

Economic data: UK retail sales; US export/import prices; US retail sales; US manufacturing, industrial production; NY Empire State manufacturing survey; University of Michigan preliminary consumer confidence index

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