Tuesday’s financial calendar offers a diverse range of company results for investors keen to scrutinise some annual updates.
The full-year results statement, the first under chief executive Stephen Bird’s watch, will give management the opportunity to provide some clarity on its strategic direction.
“News flow on SLA has been gathering since Stephen Bird took over - with a number of small disposals and acquisitions so far announced, a possible change to the branding, and talk of expanding into non-traditional asset classes,” said analysts Deutsche Bank.
“Given the recent run in the share price, our analysis suggests that a series of bolt-on acquisitions at up to 20x [annual earnings] can now match the initial accretion from buy-backs, while also bringing better longer-term growth and a higher rating; however, there remains considerable uncertainty as to whether this is indeed the strategy, how it is to be implemented, how long it will take and what risks any future M&A involves.”
Half-year numbers from SLA back in August showed a 30% drop in profits as the coronavirus pandemic and withdrawals by Lloyds dented revenues.
ITV’s restructuring programme
ITV (LON:ITV) final results on Tuesday come with the broadcaster and producer’s shares higher than they were a year ago but down around 50% over the past five years, amid a rise in online video streaming competition.
In October, boss Carolyn McCall unveiled a restructuring of the broadcast division, with a cutting of London office space as the group reacts to changing viewing habits and more flexible working.
As well as the creation of a new ‘Media and Entertainment’ division to incorporate the broadcast and on-demand arms separately from the ITV Studios production business, McCall said “we need an on-demand business which will increasingly be the focus of our new investments in content and technology and which will be our growth engine attracting younger and more targeted audiences”.
The last trading update, in November, flagged “encouraging signs” across both sides of the business, following a very challenging first half, with external revenue declined 16% in the first nine months of the year but comments that total advertising would be “slightly up” in the fourth quarter.
As well as an update on the restructuring and any developments of Britbox partnership with the BBC, there are two main things to watch for in these results, says Sophie Lund-Yates, analyst at Hargreaves Lansdown: the effect of reduced marketing spending on advertising revenues in the current quarter, and the extent of revenue and margin dilution caused by higher costs and production delays in the Studios business from the UK’s extended lockdown.
TP ICAP is building a consumer platform
TP ICAP (LON:TCAP), the interdealer broker, has rallied sharply since the rights issue completed on 17 February and, looking towards the coming final results also on Tuesday, broker Shore Capital recommended the shares as an “inflation hedge” – but not to buy until after having look at these numbers.
As well as covering last year, results should relay useful updates on current trading, the build-out of the direct-to-consumer platform after the Liquidnet acquisition completes, and Liquidnet’s potential to improve earnings power and quality, said ShoreCap analyst Vivek Raja.
“After a torrid end to 2020, a steeper yield curve should lift trading momentum across the core interest rates franchise,” he said, though the stronger pound looks like hitting revenue growth in 2021.
Following the rights issue, the broker expects 2021 earnings per share of 29.1p and rising to 31.7 in 2022, with dividends of 14.5p and 15.8p per share respectively.
“It doesn’t look like consensus has caught up yet so housekeeping is likely to entail downgrades on the results, which may provoke some profit taking. We would actually see this as an opportunity to reload with emphasis on the improvement in trading conditions,” said Raja.
Significant announcements expected on Tuesday 9 March
Finals: ITV PLC (LON:ITV), Standard Life Aberdeen (LON:SLA), Cairn Energy (LON:CNE), Capital & Counties (LON:CAPC), Foresight Solar (LON:FSFL), Gamesys Group (LON:GYS), IWG (LON:IWG), TP ICAP (LON:TCAP), Ultra Electronics (LON:ULE), Arix Bioscience (LON:ARIX), Capital & Regional (LON:CAL), Costain Group PLC (LON:COST), Forterra (LON:FORT), Gresham Technologies (LON:GHT), Headlam (LON:HEAD), Keller (LON:KLR), LSL Property Services (LON:LSL), Marshall Motor Holdings (LON:MMH), Midwich Group (LON:MIDW), RPS Group (LON:RPS)
AGMs: Caretech Holdings PLC (LON:CTH), Ecofin Global (LON:EGL)
Economic announcements: UK retail sales, US smaller companies confidence, EU unemployment and GDP