Miners, bookies and builders top of the agenda for Wednesday

Ahead of Thursday's deluge of results, mid-week will see results from Rio Tinto, William Hill and Taylor Wimpey

Rio Tinto plc - Miners, bookies and builders top of the agenda for Wednesday

Wednesday will bring more results from the LSE’s big hitters ahead of the deluge of reports scheduled for Thursday.

Rio Tinto plc’s (LON:RIO) recent production update showed various issues hitting overall output, with the weather in Australia hampering iron ore production, copper production down due to falling ore grades and technical issues affected aluminium production.

Iron is the key for Rio and 2019 saw higher iron ore prices on average higher than the year before, however, analysts at the Share Centre said the restarting of production by Vale and the lingering effects of the Covid-19 are expected to result in falling iron ore and other commodity prices during 2020.

Those at RBC Capital Markets this month warned that mining equities and commodities prices are likely to be under pressure in the near term due to worries about the impact of the coronavirus outbreak.

For copper, RBC cut its 2020 price forecast to $2.70 per lb from $3.00/lb and trimmed its iron ore price forecast for 2020 by 6%, though the analysts said any weaker copper and iron prices in the near term could improve later in 2020 if China uses stimulus to recover from the outbreak.

The consensus forecast is for a final dividend of US$2.4 and some analysts expect a special dividend too.

William Hill opens its books

William Hill PLC (LON:WMH) is up on Wednesday with final results where it is likely to flag the last week’s new partnership with US broadcast giant CBS Sports, as well as any commentary on the potential impact of the UK's ban on bookmakers accepting bets from credit cards, which is due to come into force on 14 April.

For the figures, management has guided to an operating profit of £143mln, though analysts at UBS are foresting a profit beat despite revenues falling 0.7% year-on-year to £1.6bn.

Taylor Wimpey hopes to keep building up volumes

Taylor Wimpey PLC’s (LON:TW.) year-end update showed volumes up 5%, ASP growth of 2% that was a lower than forecast, and a balance sheet bulging with £546mln of cash.

TW said it plans to pay out £600mln more to investors in 2020.

The UBS analysts noted that other builders have seen double digit growth in sales per site per week in 2020 but TW has a particularly tough comparison from last year, so “may be flat to down given the focus on margins in 2020. Key will be an update on pricing traction in the new year.”

Serco and the contract flow

Outsourcer Serco Group PLC’s (LON:SRP) finals come mid-week, where investors expect to hear on the dividend following a detailed pre-close and encouraging recent contract news.

It would be the first payout since 2014, though analysts at UBS were upbeat, with a first half dividend in 2020 also likely.

Another focus will be the size and shape of the bid pipeline after winning more than £5bn of work in 2019, with a healthy rate of new opportunities could support further upgrades later in the year, the analysts said.

Revenues are forecast to come in at £3.2bn, for underlying earnings (EBITA) of £120mln.

Metro measures the damage

Metro Bank PLC (LON:MTRO) will finally reveal the extent of last year’s damage on Wednesday’s preliminary results, with its shares having plummeted from above 4,000p two years ago to less than 200p.

It is the also sixth-most shorted share in the UK suggesting many think there is more bad news to come.

The dog-friendly bank has been under fire since revealing a massive accounting blunder in January 2019, prompting an investigation by the authorities.

Customers ended up withdrawing £2bn in funds, meaning that pre-tax profits collapsed 83% to £3.4mln in the half-year to 30 June and swung to a £3.3mln loss in the third quarter.

To keep afloat, the company has been raising cash through a £375mln share placing in May, a £500mln sale of a mortgage portfolio in July and a £350mln bond issue with an eye-watering 9.5% coupon in October.

Founder and chairman Vernon Hill left in October after months of pressure by investors, while chief executive Craig Donaldson was gone by December.

Dan Frumkin, now at the helm, will respond to investors looking for a turnaround.

Significant announcements expected for Wednesday February 26:

Finals: Rio Tinto plc (LON:RIO), Taylor Wimpey PLC (LON:TW.), Avast PLC (LON:AVST), Nichols PLC (LON:NICL), Restaurant Group PLC (LON:RTN), Serco Group PLC (LON:SRP), Unite Group PLC (LON:UTG), William Hill PLC (LON:WMH), Weir Group PLC (LON:WEIR), Metro Bank PLC (LON:MTRO)

Interims: Revolution Bars Group PLC (LON:RBG), Avingtrans PLC (LON:AVG), Town Centre Securities PLC (LON:TOWN)

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