Oil services mid-cap Petrofac PLC (LON:PFC) remains engulfed in a Serious Fraud Office investigation into historic allegations of bribery, so Tuesday’s latest trading update could provide a distraction.
While the FTSE 250-listed company has not been charged with any offences, there’s potential for fines and other regulatory penalties, and that continues to hang heavy on the share price.
Looking beyond the investigation at the underlying business, cost control has been an important area of focus for Petrofac , and analysts at The Share Centre expect more progress on that front - with headcount likely to continue falling.
In a preview of the update, The Share Centre analysts said: “Petrofac’s engineering contracts usually come with long lead times and it’s important the order book is kept full with new projects to support future profitability.
“Recent years have seen the value of outstanding contracts shrink significantly – that’s linked to a general downturn in activity in the oil & gas sector, but the ongoing investigation probably isn’t helping. The size of the order book is therefore our key metric to watch at the moment.”
Margin rebuild underway at Gear4Music
Musical instruments retailer Gear4Music (Holdings) PLC (LON:G4M) will report a 36% jump in sales when it publishes its full-year results on Tuesday.
But G4M has struggled to convert the top-line growth into extra profits, not least because of additional distribution costs following a busier-than-expected Christmas.
As a result, it is now guiding for underlying earnings (EBITDA) to be “not less than £2mln” for the year just gone, almost half of that it achieved in the previous 12 months.
Management has promised to focus on rebuilding margins in 2019 in order to return to a “more profitable growth trajectory”. Investors will want to see evidence that this is happening.
Significant events expected on Tuesday June 25:
Trading updates: Petrofac Limited (LON:PFC)
Finals: Gear4Music Holdings PLC (LON:G4M), IMImobile PLC (LON:IMO), Mind Gym PLC (LON:MIND), Northgate PLC (LON:NTG), Redcentric PLC (LON:RCN), Redt Energy PLC (LON:RED), Tekmar Group PLC (LON:TGP)
Interims: Pressure Technologies PLC (LON:PRES)