Tuesday preview: Severn Trent, eOne, Shaftesbury, Aveva

In a fairly quiet day for economic data, between the latest election campaign u-turns and soundbites grab the headlines, companies scheduled to report results include water company Severn Trent and Peppa Pig producer Entertainment One.

In the UK, the CBI will publish its distributive trades survey and the Office for National Statistics will report public sector net borrowing for April, while across the Channel, Markit's 'flash' purchasing managers' indices are due for the Eurozone and later US manufacturing and services sectors, which hold the potential to move markets, while Germany's IFO institute will publish its business confidence index for May.

The largest company due to provide an update on Tuesday is FTSE 100 water services provider Severn Trent, which will report full-year results where investors are likely focus on comments around new cost savings and efficiencies, the company’s performance under its incentive programmes and capital expenditure - or totex as regulator Ofwat calls it, plus anticipated synergies from the acquisition of smaller rival Dee Valley.

Management recently revealed in a trading statement that it expects to exceed the reward of £23m delivered under Ofwat's operational incentives from the previous year.

Profits should be broadly flat against last year's £523m, UBS predict, although this masks an improved performance from nonregulated businesses, though it forecast a 1% drop in earnings per share to 107.7p from 108.7p, mainly reflecting an assumption of a higher tax rate but a 1% increase in the dividend to 81.5p, in-line with the company’s prior announcement.

Last month, Entertainment One got the bad news out of the way, warning of some short-term profit pain for potential long-term gain as the TV and film distributor aims to focus less on its blockbuster children's TV show and develop its film division to boost underlying earnings and cash flow.

Interim results are due from Shaftesbury and, said UBS, should be upbeat with strong demand continuing across all uses. "Weak sterling has contributed tourist demand to a portfolio that is winning from the changing nature of retail: a truly
mixed use portfolio offering all three of the major requirements ('buzz-words') for a successful physical retail format today: 'Dominance' (there is no real competing shopping centre in central London), 'Convenience' (to the workers and those that live in central London) and 'Experience' (with the restaurants, bars, theatre and other central London attractions)."

Aveva will report full year results, where the weakness of the pound should provide a big benefit to the top line and profits. As the company has already indicated it will be broadly in-line with market expectations of £218m revenue, £56m PBT and 67p EPS, investors are likely to focus more on expectations for 2018 results, where consensus is currently looking for revenues of £229m and PBT of £61.5m.

Likewise at Homeserve, where a pre-close statement has reassured on UK stability and international growth, meaning the focus will likely be updates on new strategic initiatives and new business models.

Not dissimilarly Electrocomponents not long ago posted a strong pre-close statement, so focus will again be on the outlook. UBS said this will mainly be on whether Electrocomponents can sustain the high single digit growth seen in the fourth quarter and how much margin expansion can come through after a near 250bps improvement this last year.

Tuesday May 23

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Gross Domestic Product (GER) (07:00)
IFO Business Climate (GER) (09:00)
IFO Current Assessment (GER) (09:00)
IFO Expectations (GER) (09:00)
New Homes Sales (US) (15:00)

UK ECONOMIC ANNOUNCEMENTS
Public Sector Net Borrowing (09:30)

FINALS
1Spatial, Assura, Aveva Group, Big Yellow Group, Cranswick, De La Rue, Electrocomponents, Entertainment One Limited, Hibernia Reit, Homeserve, Scapa Group, Severn Trent

INTERIMS
easyHotel, Greencore Group, Paragon Group, Premier Veterinary Group, Renew Holdings, Shaftesbury, Topps Tiles, UDG Healthcare Plc

TRADING ANNOUNCEMENTS
Gem Diamonds, Nostrum Oil & Gas, MHP SA GDR

GMS
Wolseley

EGMS
Public Power GDR SA (Reg S)

AGMS
Accesso Technology Group, Afarak Group (DI), Candover Investments, ClearStar Inc. (DI / REG S), Datang International Power Generation Co Ltd., Dunedin Income Growth Inv Trust, EG Solutions, Epwin Group, Foresight VCT, Foresight VCT Infrastructure Shares, Foresight VCT Planned Exit Shares, Forterra, Fresnillo, GCP Asset Backed Income Fund Limited, Golden Prospect Precious Metals Ltd., Inch Kenneth Kajang Rubber, InterQuest Group, JSC KazMunaiGaz Exploration Production GDR (Reg S), Marshall Motor Holdings, Medaphor Group, Metminco Ltd., NMC Health, Oxford Biomedica, Princess Private Equity Holding Ltd., Riverstone Energy Limited , Royal Dutch Shell 'A', Sound Energy , Stock Spirits Group , Time Out Group, Tribal Group, Zoltav Resources Inc (DI)

FINAL DIVIDEND PAYMENT DATE
Holders Technology, Impax Environmental Markets, Pendragon, SafeCharge International Group Limited (DI), Sanne Group, Standard Life, Stilo International

QUARTERLY PAYMENT DATE
SQN Asset Finance Income Fund Limited