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Tuesday preview: Construction PMI, Sainsbury's quarterly report

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Tuesday preview: Construction PMI, Sainsbury's quarterly report

Mon, 03 July 2017
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Tuesday preview: Construction PMI, Sainsbury's quarterly report

(ShareCast News) - Tuesday sees an update on UK construction sector activity, while in company news Sainsbury's will provide a first-quarter update.
Following manufacturing purchasing managers' index the day before and ahead of the key services PMI survey the day after, the construction report is forecast to see a slight softening in growth for June.

Off the back of a reading of 56.0 in May, the consensus is for an easing off to 55.0.

Pantheon Macroeconomics predicted that as housebuilding is likely to have slowed as house purchase demand has fallen, the construction may even have fallen to 54.0, which could see shares in housebuilding companies hit.

Wednesday's Markit/CIPS services PMI will be the bigger report and could give the pound a major dent or fillip if it disappoints or impresses.

Sainsbury's update is the first following the Argos acquisition where the retailer will not release separate data for Sainsbury supermarkets and Argos.

Moreover, Sainsbury's will not longer give Q2 and Q3 trading updates so this is the last reporting event pre interim results on 8 November.

Deutsche Bank forecast group retail like-for-like sales and total retail sales growth excluding fuel of 3.1% and 3.2%, while UBS was looking for retail LFL ex fuel of 1.1%.

Barclays and Goldman Sachs predicted group LFL sales of just 1.9%.

Goldman, which has the stock on a 'sell' recommendation, believes the market is "materially underestimating the margin investment required at Sainsbury supermarkets and Argos", with the grocer losing market share and price competitiveness, plus with wages below peers'.

Furthermore, Goldman sees the City consensus as overestimating free cash flow in the current financial year by around £250m, equivalent to circa 5% of the company's total market cap.

Imagination Technologies, which last month put itself up for sale after its shares collapsed on the news that major client Apple plans to soon start making its own microchips, will also release full year results.

Two weeks ago the company said it had received expressions of interest about a potential takeover, with speculation that some big names in the tech world such as Intel and Qualcomm are circling.

Barclays forecast revenue of £149m, up 5% on the previous year, while gross profit is predicted to increase 14%, with the company expected to return to a positive adjusted operating profit margin of 18%.



Tuesday July 04



INTERNATIONAL ECONOMIC ANNOUNCEMENTS
PMI Construction (US) (09:30)
Producer Price Index (EU) (10:00)

FINALS
Imagination Technologies Group, Solid State, Trakmate

INTERIMS
RM, St. Modwen Properties

TRADING ANNOUNCEMENTS
Costain Group, Sainsbury (J), Staffline Group

INTERIM DIVIDEND PAYMENT DATE
Marston's

QUARTERLY EX-DIVIDEND DATE
JP Morgan Chase & Co

GMS
NewRiver REIT

AGMS
Distil, ProVen Growth & Income VCT, ProVen VCT, Veltyco Group

FINAL DIVIDEND PAYMENT DATE
Pacific Assets Trust, Staffline Group