Wednesday preview: Employment data, British Land, Sophos, Countrywide

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Wednesday preview: Employment data, British Land, Sophos, Countrywide

Tue, 16 May 2017
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Wednesday preview: Employment data, British Land, Sophos, Countrywide

(ShareCast News) - Alongside some corporate results from the likes of British Land, Sophos and SSE, Wednesday's unemployment and earnings data will provide a fuller picture of the ongoing squeeze on UK consumers, following data that showed inflation rising at its fastest rate in three and a half years.
FTSE 100 property developer British Land is due to post its final results, with the consensus estimate for net asset value standing at 853p.

Broker Numis recalled that third quarter lettings, particularly in retail, were impressively ahead of estimated rental value, "and a continuation of this theme should go even further to reassuring that the large caps do not face armageddon".

UBS forecast a 1% gain in NAV to 901p, based on a slight weakening in the portfolio value in the second half, more than offset by the strong gain from the Leadenhall sale that was made at 26% above book value.

The Swiss bank forecasts 36.7p earnings per share, but a decline next year, due to the full year effect of recent sales made.

"We will look for an update on the development pipeline, whether British Land has been able to convert any of the eight major requirements it mentioned with its 1H17 results and whether British Land is able to report material progress on its vast 5.5m sq ft Canada Water scheme," it said.

Also reporting annual results is Sophos, which has seen its shares on the front foot this week, helped by attention around the cyber attack on the NHS and around the world.

Last month, it said report fourth quarter billings had grown roughly 27%, excluding any forex changes and benefits from its recent acquisition of Invincea.

UBS expects the results will highlight strong momentum in the Endpoint business especially, and a rapid acceleration in the take-up of its Sophos Cloud management layer.

Amid fresh news about the cooling housing sector, housebuilder Countryside Properties has interims due.

After a trading update on 12 April, not many surprises are likely, with volumes up 31% to 1,437 homes and the private average sales price to fall 13% to £440k as the group looks to reposition its price point to the stronger demand conditions at lower price points and limit the sale of properties over £1m.

Numis said it will focus on whether Countryside can keep up its momentum in its sales rate, which was 0.89 in the first half versus 0.79 last year, and outlet growth at 30%.

"The growth in outlet numbers compares to a broadly flat position for the wider sector and highlights the strong momentum the group has which should support sector leading earnings growth in 2017/18."

Spectris is scheduled to report its first quarter trading update, with February's update giving no detail on trading apart from seeing a "modest" outlook for its end markets in 2017.

Spectris has set a target of annualised recurring savings of £35m over the period to end 2019.

UK labour market data

In the three months to February, UK unemployment was unchanged at 4.7%, with the employment rate at a joint high of 74.6%.

Unemployment is expected to remain at 4.7% for a third successive month, with a modest change in employment.

Although employment levels are high, wage growth has been dried up, barely matching the inflation rate in February and since likely to have fallen behind the rate of consumer price inflation that rose to 2.7% in April, which is putting a big squeeze on consumers, especially those 'just about managing'.

The consensus is for average wage growth excluding bonuses to remain at 2.2%, while the figure including bonus payments is seen crawling up to 2.4% for the three months to March, from 2.3% a month before.

The arithmetic "doesn't appear to offer much scope for sharp changes in pay growth rates" said economists at RBC Capital Markets, but with the headline figures expected to move broadly sideways, one area of potential interest will be the split between full- and part-time employment changes.

"A clear shift in favour of full-time work in the last couple of reports could arguably be a sign that some of the remaining slack in the labour market is being eroded if repeated again this time."

Wednesday 17 May

Consumer Price Index (EU) (10:00)
Crude Oil Inventories (US) (15:30)
MBA Mortgage Applications (US) (12:00)

Claimant Count Rate (09:30)

British Land Company, C&C Group, JZ Capital Partners Ltd, Sophos Group , SSE, Wincanton

Brewin Dolphin Holdings, Countryside Properties, Mitchells & Butlers, Patisserie Holdings , Redx Pharma

Spectris, Synectics

Bodycote, BP, Cairn Homes , Cairn Homes , Cenkos Securities, Chesnara, Civitas Social Housing , esure Group, Foxtons Group , Highland Gold Mining Ltd., Indivior, Jupiter Fund Management , Kings Arms Yard VCT, Maven Income & Growth 4 VCT, Meikles Ltd., Menhaden Capital , Ophir Energy, Paddy Power Betfair, Playtech, Premier Oil, Sigmaroc , Tritax Big Box Reit , UBM, Vitec Group, Zegona Communications

Aviva, GKN, Hochschild Mining, OneSavings Bank, Rentokil Initial