Investors are set for another cash bonanza this week as miners Glencore and BHP are both expected to announce they are flush.
NatWest, too, is expected to use some of its current financial strength to launch a big share buy-back.
With inflation and rate hikes the big theme of the moment, investors will have plenty to digest over the week with plenty of data and various Federal Reserve speakers giving their view on the future path of policy.
TUESDAY 15 FEB
Black gold for Glencore
Coal will be centre stage when Glencore PLC (LSE:GLEN) (Glencore PLC (LSE:GLEN)) releases its full-year results on Tuesday, with the record prices seen recently tipped to send the miner’s profits soaring.
UBS is forecasting revenues in the year to end December 2021 will jump by 41% to US$201bn with underlying profits to more than triple to US$14.2bn after depreciation.
Strong markets for cobalt, another of Glencore’s staples, has strengthened the current tailwind, with the company now pivoting towards battery metals.
Reflecting that strategic shift, disposals will be a theme in the results according to UBS.
In December, the miner said ten sales are ongoing with 15 more under review and this will throw up opportunities for more big dividend payments suggests the broker.
Plus500 heading for raised guidance
Plus500 Ltd (LSE:PLUS) is also scheduled to publish its preliminary full-year 2021 results on Tuesday.
The FTSE 250-listed online CFD trading platform said in January it expects its results to exceed previous market expectations, even with a slow fourth quarter.
Analysts expected revenues to be US$655mln, but the company said last month sales will be at least US$718mln.
Earnings per share for the year will be US$3.10 – also well ahead of previous market expectations.
How the recent market volatility has affected this year's trading outlook will be a key thing to note.
UK jobs and earnings
Ahead of the potentially bigger inflation news the day after, the Office for National will release unemployment and wage numbers covering the three months to the end of 2021, along with an update on claims in January.
The previous report showed UK unemployment apparently fell back to its lowest level since July 2020, with a fall to 4.1% in the headline rate.
Analysts felt this was overshadowed by a fall in wages to 3.8%, which put further pressure on incomes via the cost-of-living squeeze.
With upward pressure on prices, this meant wage growth barely covered inflation in November, undermining real wages and household spending power.
The number of vacancies also increased, rising to 1.25m, and compared to pre-pandemic the figures showed that there were 459k fewer people in work, with no obvious sign that these people would return to the workforce any time soon.
"This squeeze is likely to have significant consequences on UK retail sales growth in the coming months, after the big -3.7% fall we saw in December," said analysts at CMC Markets.
WEDNESDAY 16 FEB
BHP not a PLC but still plenty of dividend interest for shareholders
Mining titan BHP Group Limited on Wednesday follows sector peer Glencore in reporting results, with (Aussie) dollar signs flashing in investors’ eyes in expectation of a big dividend.
Note it is not a PLC any more as January saw the domicile switched to Australia and shareholdings ‘unified’ into the Aussie business.
Dividends though will still be paid as normal to the UK shareholder base and another thumping cheque/digital transfer should be on the way with the interim results for the six months to end December.
Consensus forecasts are for revenues of US$29.8bn (£22bn), underlying profits (EBITDA) of US$18.3bn and a dividend of 124c.
Indivior back in the black?
Indivior has been embroiled in a lengthy battle to extract itself from a raft of court cases associated with its treatment for opioid or painkiller addiction.
That drug, Suboxone, is now off-patent but is declining slower than expected, which has seen the share price perk up recently.
Analysts are expecting turnover to rise 17.1% year-on-year to US$757.8mln this time and pre-tax profit to clock in at US$147.0mln, compared to a loss the year before of US$173mln.
At the time of its third-quarter results, the company raised its 2021 revenue guidance on the back of strong demand for its new SUBLOCADE drug, an alternative to regular opioids and shareholders will be hoping that the momentum has been continued.
UK inflation
Inflation at the end of last year rising to its highest levels since 1992, moving up to 5.4% from 5.1%, was a prime reason why the Bank of England took the decision to raise interest rates by 0.25% to 0.5% at the start of this month.
With four rate-setters wanting to go further and hike to 0.75%, a similarly strong reading of the consumer prices index could provide a stronger signal of another rate rise next month.
This week’s January numbers are expected to see UK CPI come in at 5.5%, with core prices rising to 4.3%.
The Bank of England has already forecast that inflation will peak at around 7.25% around April as energy bills jump that month.
THURSDAY 17 FEB
Reckitt Benckiser's time to show how different it is to Unilever
Another Anglo-Dutch FTSE 100 giant – Unilever – has been hogging the headlines for all the wrong reasons but it is time for sector peer Reckitt Benckiser PLC to step into the limelight.
Full-year turnover is tipped to slide 6.1% to £13.1bn and EBITDA to dive 7.3% to £3.4bn; however, good old pre-tax profit is seen recovering to £2.7bn from £1.87bn in 2020.
Group like-for-like net revenue growth of 3.3% from the year before in the third quarter was balanced between volume and price/mix and an “encouraging start to the cold and flu season” (encouraging for whom?).
“Despite significant cost pressures, the benefits of our pricing actions, mix and productivity programme, mean our margin guidance is unchanged, and we remain confident in our medium-term outlook,” said Laxman Narasimhan, the chief executive officer.
It will be interesting to see whether he is singing the same song after Unilever warned it was having trouble passing all of its cost increases on to customers.
Standard Chartered kicks off bank season
Thursday will also see Standard Chartered as the first of the FTSE 100 banks to release fourth-quarter earnings, with analysts expecting the company to beat expectations on the back of lower bad debts.
The bank posted pre-tax profits of US$1.075bn in the last quarter, above analyst expectations of $1.07bn on the back of robust levels of export growth across many of its South-East Asian markets
UBS anticipates profits before taxation of US$388mln, up 300% year-on-year, with non-interest income expected to be up 17% as the company’s net interest margin falls by 0.08 percentage points.
The bank’s CET1 - a measure of the strength of the Asia-focused bank’s balance sheet strength – is expected to contract from 14.5% in Q1 2020 to 14.0% in this quarter.
The brokers said lower expected loan losses will contribute to costs being 7% lower than in Q4 2020, which should help continue a trend of bad debt write-off, which fell to US$107mln in the last quarter.
FRIDAY 18 FEB
NatWest follows
NatWest Group PLC (LSE:NWG) will be the first of the big UK high street banks to release its fourth-quarter earnings on 18 February, with analysts expecting broad growth and the first signs of the impacts of rate hikes on the company’s balance sheet.
NatWest enters earnings season with strong fundamental and wider contextual tailwinds.
The bank’s share price has risen by 45% in the last year, and by 15% in the approximate three months since its last earnings, with confidence in the company coming from a number of angles.
Cash set aside for impairments from COVID-19 loans remains largely unused and there is the expectation of a boost to its net interest margin as the Bank of England targets further rate rises this year, both of which should help the company’s financial position.
Dividends are accordingly likely to be a key feature of that enhanced liquidity, with UBS expecting 7p and a share buyback of £1.2bn to be announced with the results.
The broker forecasts underlying pre-tax profits to rise by 30% year-on-year to hit £817mln, while the impact of UK interest rate raises is not yet expected to be reflected in the company’s net interest margin, down 2% year-on-year.
Some headwinds for 2022 may occur in the form of a return to loan losses after 2021’s write-backs, while IT and digitisation upgrades may add to costs.
Financial calendar 14-18 February 2022
Monday 14 February:
AGMs: GCP Infrastructure Investment Ltd
Tuesday 15 February:
Finals: Glencore PLC (LSE:GLEN), Plus500 Ltd (LSE:PLUS), RM Plc (LSE:RM.)
AGMs: Dewhurst (AIM:DWHT) PLC, Nexus Infrastructure PLC
Economic Announcements: Claimant Count Rate, Unemployment Rate, Producer Price Index (US)
Wednesday 16 February:
Trading announcements: Ocean Outdoor Ltd (LSE:OOUT)
Interims: BHP Group Ltd
Finals: Primary Health Properties PLC (LSE:PHP), Segro PLC, Indivior PLC (LSE:INDV)
Economic Announcements: Consumer Price Index, Producer Price Index, Retail Price Index, January Retail Sales (US), FOMC Minutes (US)
Thursday 17 February:
Trading announcements: Aveva Group (LSE:AVV) PLC, Safestore Holdings (LSE:SAFE),
Interims: MJ Gleeson (LSE:GLE) PLC
Finals: Standard Chartered PLC (LSE:STAN), Harbourvest Global Private Equity, Reckitt Benckiser Group PLC (LSE:RKT, ETR:3RB), Moneysupermarket.com (LSE:MONY) Group PLC
AGMs: Virgin Money UK PLC (LSE:VMUK), Watkin Jones PLC (AIM:WJG), Highway Capital, Chrysalis Investments Ltd
Economic Announcements: Initial Jobless Claims (US), Building Permits (US)
Friday 18 February:
Interims: City of London Investment Trust (LSE:CTY)
Finals: NatWest Group PLC (LSE:NWG), Pod Point Group Holdings PLC (LSE:PODP), Segro PLC, TBC Bank (LSE:TBCG) Group PLC, The Renewables Infrastructure Group Ltd, Hochschild Mining PLC (LSE:HOC, OTCQX:HCHDF)
Economic Announcements: Retail Sales, GFK Consumer Confidence, Existing Home Sales (US)