Following on from the solid full-year 2018 number’s from Royal Bank of Scotland Group PLC (LON:RBS) on Friday, results from a trio of blue chips lenders will take centre stage in the coming week.
First up, on Tuesday, will be HSBC PLC (LON:HSBA), with investors looking for some reassurance over the ongoing trade spat between the US and China, with the global banking giant’s focus increasingly geared towards Asia.
Around 43% of HSBC's profits come from Hong Kong and increasing investment in China, so there is a clear need for the uncertainty to be removed. As ever with banks, however, there will also be a focus on costs, the performance of HSBC’s investment banking division and the group’s outlook for the year ahead.
Analysts at UBS are forecasting HSBC to report full-year adjusted pre-tax profit of US$4.775bn, with its CET1 ratio at 14.1%.
Cost-cutting also key for Lloyds
Lloyds Banking Group PLC (LON:LLOY) will update the market on Wednesday, with the group’s shares - a favourite amongst private client investors - having had a torrid 2018, falling by around 25%.
The market will be looking at areas such as cost-cutting, Lloyds’ net interest margin, dividends and more information on its new strategy plan.
With its business being predominately UK based and as a large mortgage provider any comments regarding the housing market and Brexit will be worth noting.
There may also be an update on recent rumours that it intends to beef up its presence in wealth management.
Activist pressure on Barclays
The concerns for Barclays PLC (LON:BARC), which rounds off the banking trio’s results on Thursday, revolves around its current strategy and the significant part that the investment banking division plays.
There was some good news on that front with its interim results in October, with equities and fixed income trading at Barclays better than expected, and a return to dividend growth a welcome boost for investors.
However, recent news that activist investor Edward Bramson has taken a stake in the company suggests that pressure may be applied on the bank’s CEO Jes Staley to change his strategy.
Gloomy end to 2018 for Anglo American
FTSE 100 miner Anglo American PLC (LON:ANGLO) will likely end 2018 on a gloomy note in its final results on Friday.
Iron ore production took a hit in the fourth quarter due to issues at the Minas Rio and Kumba mines, while rough diamond sales at De Beers Group - in which it holds a majority stake - dropped 25% in the sales cycle ended 28 January.
De Beers also wasn’t expected to bring much cheer in 2019, with diamond production forecast to fall to 31-33mln carats due to a decision to exit from the Venetia open pit and focus on underground mines.
What is likely to take most of the attention is the group’s outlook statement after it predicted a return to growth in 2019 after restarting production at Minas Rio in December following a production halt earlier in 2018.
Special dividend eyed from Intercontinental Hotels
Investors will have money on their minds on Tuesday as Holiday Inn-owner Intercontinental Hotels Group PLC (LON:IHG) is expected to include plans for a US$500mln special dividend payment with its full-year results.
The FTSE 100-listed group said in October that a payment was planned for early 2019 and that it would reflect what it said was the “rapid” implementation of its strategic initiatives.
For the results themselves, investors will be watching the firm’s performance in its US and Middle East markets, having seen a slowdown in those segments previously that helped push revenue per room down to just 1% for its third quarter.
Analysts at UBS forecast IHG reporting full-year revenue of US$4.305bn, up from US$4.075bn in 2017, with underlying earnings (EBITDA) seen at US$911mln, up from US$862mln.
Shareholders may also be on the look-out for any more information on a US$300mln deal to acquire hotel and spa chain Six Senses, which was unveiled on 13 February.
US higher education arm predicted to drag on Pearson
When it releases its full-year results on Friday, analysts are expecting the US higher education arm of FTSE 100 firm Pearson plc (LON:PSON) to drag on its figures.
In a preview, analysts at Hargreaves Lansdown said they are expecting Pearson’s adjusted operating profits to come in at between £540mln-£545mln, in line with the firm’s own predictions from a trading update in January, although they also said that this had come from cost cutting and that they would “like to see evidence Pearson is improving its sales figures”.
“We expect the North American higher education sector to continue struggling, given increasing technological and competitive pressures. Hopefully, this is being offset by demand for online and virtual learning materials – which should still be steadily growing,” the Hargreaves Lansdown analysts added.
Mead-Johnson integration progress eyed at Reckitt
Reckitt Benckiser Group PLC (LON:RB.) is in the middle of a transformation, so January’s announcement that long-serving boss Rakesh Kapoor is stepping down later this year came as a bit of a surprise.
Despite that wobble and a few others recently, the Strepsils and Dettol maker has maintained its guidance for revenues to rise by 2.3% in the year just gone.
Growth has been fuelled by the expansion into emerging markets, but some in the City are concerned that margins at teh FTSE 100-listed firm may have peaked.
In Monday’s fourth-quarter and full-year results, investors will want to hear of integration progress with Mead Johnson and whether it managed to turn around issues at the foot care brand Scholl.
Sales of BAE’s typhoons to have picked up in H2
BAE Systems PLC’s (LON:BA.) first-half revenues were hit by the slow delivery of Typhoon jets, but bosses have signalled that some of the shortfall will be made up during the second half.
Investors will be hoping to see evidence of that in Thursday’s full-year results from the FTSE 100-listed group.
The aerospace and defence giant has struck a flurry of small deals of late which should allow the order book to continue to build over the US$40bn level.
With Saudi Arabia one of its largest customers, it will be interesting to see if management mentions the political fall-out from the recent murder of a Saudi journalist and the country’s involvement in Yemen.
More of the same for RELX
Analytics group RELX PLC (LON:REL) has seen its share price move closer and closer to all-time highs of late on the back of solid like-for-like growth across all of its divisions and an improvement in margins.
Of its businesses, Risk Solutions, which helps clients spot and prevent fraud, has been the standout performer.
“Investors will be looking for more of the same and will be keen to be updated on the group’s outlook for the year ahead,” said the Share Centre in its look-ahead to the FTSE 100-listed firm's results.
2019 set to be another tricky year for Intu
The collapse of some of the UK’s best-known retailers has hit shopping centres hard, including industry giant Intu Properties PLC (LON:INTU).
Shares in the FTSE 250-listed company, which owns the Trafford Centre in Manchester, among others, have almost halved over the past year.
They took a big tumble back in November when a consortium led by billionaire shareholder John Whittaker pulled out of a possible takeover deal due to market uncertainty.
Analysts expect that uncertainty to continue into 2019, with more shops likely to fall into administration or seek to slash their rents.
More Brexit caution eyed for Hays
Interim results from FTSE 250 recruiter Hays PLC (LON:HAS) will be watched for any more Brexit-related jitters on Thursday.
In a second-quarter update in January, the staffing firm reported growth in its gross profit, but added that it remained “mindful” of uncertainty surrounding the UKs EU exit at the end of March.
At the time, Hay’s chief executive Alistair Cox said activity levels at the start of the new year would be “an important driver of the group's second-half performance”, so any update to its outlook forecasts will be closely watched.
UK employment to rise, but wages to dip
On the macro front, the latest UK labour market report, due on Tuesday, is still likely to show little impact from Brexit uncertainties, as the figures only run to the end of December.
Economists at RBC Capital expect another healthy gain in employment after last month’s 141,000 rise, which would see the unemployment rate hold at 4%.
Despite that, there could be a dip in wage growth this month, with base effects seeing a slowing in pay growth excluding bonuses to 3.2% on the three-month year-on-year basis.
However, given the drop in inflation numbers for January to below the Bank of England’s 2% target figure, this shouldn’t worry investors too much.
Boost for public finances
Meanwhile, January’s UK public finance data due on Friday is seen as the most important of the monthly updates on UK borrowing given the deadline for self-assessment tax returns and higher than normal VAT receipts from the Christmas period.
That typically means the public finances post a surplus for the month rather than a deficit, and economists at RBC Capital, expect this year’s January surplus to be around £6bn.
Borrowing for the fiscal year-to-date stands at £35.9bn but there has been some slippage since last October’s budget and that would mean borrowing is around £5bn ahead of a path the government’s April end-of-year deficit target of £25.5bn.
That would provide a clear signal that this year’s deficit will be revised higher at the Chancellor’s Spring statement due on 13 March.
Significant announcements expected for week ending Feb 22:
Monday February 18:
US, Canadian markets shut
Finals: Reckitt Benckiser PLC (LON:RB.), McColl’s Retail Group PLC (LON:MCLS)
Interims: Petra Diamonds PLC (LON:PED), City of London Investment Group PLC (LON:CLIG), PCI-PAL (PCIP)
Economic data: None
Tuesday February 19:
Finals: HSBC PLC (LON:HSBA), Intercontinental Hotels Group PLC (LON:IHG), Spectris plc (LON:SXS), Bank of Georgia Group PLC (LON:BGEO)
Interims: BHP PLC (LON:BHP), Dotdigital Group PLC (LON:DOTD), Blancco Technology Group PLC (LON:BLTG)
Trading update: Walker Greenbank plc (LON:WGB)
Economic data: UK unemployment; UK average earnings; US NAHB housing market index
Wednesday February 20:
Finals: Lloyds Banking Group PLC (LON:LLOY), Intu Properties PLC (LON:INTU), Glencore PLC (LON:GLEN), Hochschild Mining PLC (LON:HOC)
Interims: Pan African Resources plc (LON:PAF)
Trading updates: Gooch & Housego PLC (LON:GHH)
Economic data: CBI industrial trends survey; US housing starts
Thursday February 21:
Finals: Barclays PLC (LON:BARC), Centrica PLC (LON:CAN), BAE Systems PLC (LON:BA.), Anglo American PLC (LON:AAL), RELX PLC (LON:REL), Serco PLC (LON:SRP), Playtech PLC (LON:PTEC), KAZ Minerals PLC (LON:KAZ), Morgan Sindall PLC (LON:MGNS), Macfarlane PLC (LON:MACF), Rathbone Brothers PLC (LON:RAT), RPS Group PLC (LON:RPC), Vitec Group PLC (LON:VTC)
Interims: Hays PLC (LON:HAS), Go-Ahead Group PLC (LON:GOG), Avation PLC (LON:AVA), InnovaDerma PLC (LON:IDP), McBride plc (LON:MCB), Wilmington PLC (LON:WIL)
Ex-dividends to knock 7.2 points off FTSE 100: Carnival PLC (LON:CCL), GlaxoSmithKline PLC (LON:GSK), Imperial Brands PLC (LON:IMB)
Economic data: UK public sector finances; US weekly jobless claims; US existing homes sales; US Philly Fed manufacturing index
Friday February 22:
Finals: Pearson plc (LON:PSON), Afarak Group PLC (LON:AFRK)
Economic data: CBI distributive trades survey