Thursday preview: Unilever, Sky and Debenhams updates in focus
(ShareCast News) - In a quiet week for data, politics and companies vie for investors' attention, with Sky and Unilever announcing quarterly results on Thursday and Debenhams interims.
Fresh from unveiling the results of its strategic review, which promised to improve shareholder returns and accelerate efforts to boost profitability after rejecting a £115bn takeover approach from Kraft Heinz, Unilever will give investors an update on its first quarter's trading.
Volumes are still likely to be in the red for the third consecutive quarter, predicted Barclays, forecasting organic sales growth of +1.7%, down on the fourth quarter's 2.1%.
This assumes a pick-up in price to +3.2%, with volumes down due to a slightly tougher comparative last year, a later Easter and one less trading day, though forex should benefit group growth by circa 2%.
"We expect management to reiterate its guidance for the year for growth of 3-5%, with growth to improve in H2, and with margin improvement expected to be towards the upper end of the 40-80 basis points range."
Sky's Q3 will be looking to stay on an even keel as investors wait to hear the reports of media regulator Ofcom and the Competition and Markets Authority to the Department of Culture Media and Sport, which are due by midnight on 16 May.
A note on Wednesday from RBC Capital Markets said analysts expect the deal to complete and recommend clients buy Sky for the risk-arbitration return, with Fox's offer giving a 97p spread - a 9.9% absolute return - that gives an implied annualised return of over 25%.
"We believe both the Secretary of State and shareholders are likely to approve the deal, with completion occurring by the end of August."
RBC's best estimate is that if the deal fails, Sky would move to around 10% above its undisturbed price prior to the announcement, with the FTSE 100 having risen around 7% over the same period, implying a price of 860p.
Ahead of Debenhams interim results, HSBC analysts said the department store group's better-than-expected peak trading was "broadly in line with the wider sector", but felt company-specific structural challenges and macro headwinds remained.
"The ability to swap out high margin own-label brands in favour of more desirable lower margin third party brands commensurate with the group's H&B market position is a commercial risk too far in our view, and assumes that Debenhams could get sufficient brand support.
"Accordingly we see CEO Sergio Bucher's strategic options as being limited to store upgrades to help mitigate the decline in store-based LFL sales, and increased focus on the developing an international online platform but where cost could be a limiting factor."
Thursday April 20
Jersey Oil And Gas, Hvivo, Randall & Quilter Investment Holdings (DI), Xeros Technology Group
Acacia Mining, Essentra, Man Group, Pernod Ricard, Sky, Unilever
INTERIM DIVIDEND PAYMENT DATE
INTERIM EX-DIVIDEND DATE
Barratt Developments, Carr's Group, SCS Group
QUARTERLY PAYMENT DATE
SQN Asset Finance Income Fund Limited
QUARTERLY EX-DIVIDEND DATE
Ediston Property Investment Company, Merchants Trust, TwentyFour Select Monthly Income Fund Limited
Royal Dutch Shell 'A'
Acacia Mining, Dialight, Domino's Pizza Group, Essentra, LightwaveRF , Octopus AIM VCT 2, Redx Pharma, Relx plc, SEGRO, SThree, Yolo Leisure And Technology
FINAL DIVIDEND PAYMENT DATE
Law Debenture Corp.
FINAL EX-DIVIDEND DATE
Acencia Debt Strategies Ltd., Aggreko, BAE Systems, Balfour Beatty, Bodycote, Capital & Counties Properties, Drax Group, Equiniti Group, Fevertree Drinks, Highland Gold Mining Ltd., Hochschild Mining, IndigoVision Group, Inmarsat, Intu Properties, John Laing Group , M. P. Evans Group, Man Group, Marshall Motor Holdings, Mondi, Pendragon, Rathbone Brothers, RPS Group, Smurfit Kappa Group, Stilo International, Taptica International (DI), Tyman, Unite Group, Vitec Group, Zotefoams