Friday preview: JD Wetherspoon, Investec and SThree results due

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Friday preview: JD Wetherspoon, Investec and SThree results due

Thu, 14 September 2017
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Friday preview: JD Wetherspoon, Investec and SThree results due

(ShareCast News) - There's little domestic business news due on Friday, save a speech from Monetary Policy Member Gertjan Vlieghe, corporate updates from Investec, JD Wetherspoon and SThree, while possibly most significant item of macroeconomic data may be US retail sales .
Noted dove Vlieghe will deliver a speech at the Society of Business Economists' annual conference at around 09:50 in London.

Before this, JS Wetherspoon will have issued its final results for the 53 weeks to 30 July, having already disclosed like-for-like sales growth accelerating to 5.3% in the early summer and standing 3.9% higher over the first 50 weeks of the year.

Founder Tim Martin also reiterated his guidance that LFL sales of about 3-4% will be required to maintain profits at this year's levels in the next financial year.

Numis expects an EBIT margin at the top of the guided range, 7.6-7.8%, which implies £128m of EBIT and 63.6p of EPS.

"The step change EPS in FY17 reflects LFL sales growth well above industry average and a pick-up in margin from an historic low in FY16 as the company has raised prices to close the substantial gap versus competitors."

The broker also noted that JDW had been buying back stock "at an unprecedented rate" in recent weeks, "suggesting either a looser leverage target, confidence on outlook, or both".

Recruiter SThree is due to update investors on its third quarter, after the second saw net fees increase 4% on a like-for-like basis after a flat start to the year.

UBS forecast a small acceleration in LFL growth to at least 4% and also said there was potential for currency-driven upgrades from recent euro strength.

The bank expects a meaningful improvement in the UK, after holding back group performance in the second quarter with a 14% decline, boosted by management changes and market data continuing to pick up.

"Continental Europe should remain robust in mid/high-single digits, Americas strong double-digits, and APAC and ME should hopefully remain in growth."

Investec is in the diary to provide an update on its first quarter, having in May reported a 18.5% increase in full-year statutory operating profits to £599.1m that drove a 6.3% rise in statutory earnings per share to 48.3p.

Good balance sheet growth in both the UK and South Africa is expected, Numis said, with continued net inflows into both the asset management and wealth management businesses.

"We expect a compression in the yield on assets within the UK bank but a reduction in funding costs and more importantly a reduction in excess liquidity to have supported the group NIM.

"We remain cautious about the UK economic outlook and commodity and political risks remain in South Africa but we believe both the Wealth and Asset management businesses have attractive prospects."

Later in the day the US Census Bureau will produce its monthly update on retail sales for August. Month-on-month sales growth is estimated to have eased to 0.1% from 0.6%, or if excluding automobiles it is seen remaining at 0.5% for another month.

US industrial production, also due at 1330 BST, is seen easing to 0.1% from 0.2% a month earlier.

Friday, 15 September

Retail Sales (US) (13:30)
Industrial Production (US) (14:15)
U. of Michigan Confidence (Prelim) (US) (15:00)
Business Inventories (US) (15:00)

Wetherspoon (J.D.)


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