Tuesday preview: Taylor Wimpey, GKN, Fresnillo among companies reporting

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Tuesday preview: Taylor Wimpey, GKN, Fresnillo among companies reporting

Mon, 27 February 2017
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Tuesday preview: Taylor Wimpey, GKN, Fresnillo among companies reporting

(ShareCast News) - Results season digs in on Tuesday with the likes of Taylor Wimpey, GKN, and Fresnillo, and with only second-line economic data prints on the day, companies should get most of the attention.
With its bumper dividend yield, Taylor Wimpey is a popular stock and has already published a pre-close statement that guided EBITA to the top end of £706-755m consensus forecasts, implying profit before tax of around £731m.

Given this, the City's focus will be on current trading, the outlook and any further detail on its cash return plans.

The company has pledged to pay a special dividend of £300m this summer, with a £1.3bn cash return target between 2016 and 2018 that leaves room for a further £150m minimum dividend and a £300m special divi in summer 2018.

Having skirted close to 18-month highs in recent weeks, GKN, the maker of automotive drive shafts and axle joints, has slipped slightly ahead of its preliminary results on Tuesday.

With forecast second-half sales of £4.58bn and profit before tax of £324m, the consensus estimate is for £9.1bn full year revenues, £668m PBT and earnings per share of 30p.

Fresnillo's full year production results were mostly encouraging, with silver production up by 7.1% as a result of higher grades of ore and the start-up of production at new projects, while gold sales were also up but were driven mainly by reduced inventories.

Investors can expect group revenues to be boosted by higher average selling prices of both silver and gold compared to the previous year, while management commentary should cover progress on newer mines where production needs to rise to cover the mature mines as their grades begin to decline.

Others reporting from the FTSE 100 list include Croda, Provident Financial and Sage, while madcaps Bodycote, Derwent London, Go-Ahead, Moneysupermarket and Tullow Oil are all due to report.

For Go-Ahead Group, which has re-stated its income statement accounting so that the current service cost of its rail staff pensions only reflects changes to benefits over the life of its franchises, rather than also include the cost of changes to benefits that fall beyond the franchise lives, is now seen producing revenue of £3.47bn, PBT of £146m and adjusted diluted earnings per share of 269p, according to Deutsche Bank's forecasts.

After the changes to the recording of pensions, Go-Ahead reiterated its dividend cover policy of "around two times earnings" but Deutsche noted that this will be applied to statutory EPS going forward; that is, the increase to group income statement figures is not expected to result in a dividend increase.

Consumer confidence insights from UK, France and US

The release at midnight will show the results of a survey to see if UK consumer confidence continued to improve after the marginal gain to -5 in January when three of the five contributing measures increased.

However, HSBC said that consumers remained clearly concerned about the economy, with the 'general economic situation' question staying at historical lows and 18 points in January lower than it was a year before.

"Of the 5 measures The 'Major Purchase Index' fell in January, which may be the first sign of the impact of rising inflation. We expect the GfK headline index to continue an overall downward trend and expect consumer confidence to fall in February (-7) as consumers start having to bear the cost of rising inflation."

Ahead of French elections in April and May, economic data has not been wobbling. Consumer spending and inflation numbers at 0745 GMT on Tuesday will provide furthers readings that could keep the populace content to maintain the status quo rather than increase support for the right-wing Marine Le Pen.

At 1330 GMT and 1500 GMT US GDP and consumer confidence data releases will land.

Economists expect Q4 GDP to be revised up to 2.1% from the initial release of 1.9%, backed up by solid recent macroeconomic releases.

After the Conference Board consumer confidence index increased by 12.5 points in the last two months of 2016 then fell modestly to 111.8 in January from 113.3 in December, the consensus is for a slight easing to 111.0.

Tuesday 28 February

Balance of Payments (GER) (07:00)
Chicago PMI (US) (14:45)
Consumer Confidence (US) (15:00)
Retail Sales (GER) (06:00)

GFK Consumer Confidence (00:01)

Bodycote, Croda International, Dalata Hotel Group, Exova Group , Fresnillo, GKN, Interserve, IWG , Johnson Service Group, Laird, Moneysupermarket.com Group, Provident Financial, Sphere Medical Holding, St James's Place, Taylor Wimpey, Tullow Oil

Redde, Revolution Bars Group, Swallowfield, Waterman Group

Babcock International Group, OPG Power Ventures


Fondul Proprietatea S.A. GDR (Reg S)

Elegant Hotels Group , Sage Group

Chrysalis VCT, Polar Capital Global Financials Trust, Renew Holdings, TUI AG Reg Shs (DI), Watkin Jones

NB Private Equity Partners Ltd.

City of London Inv Trust, Picton Property Income Ltd