Tuesday preview: Standard Life, InterContinental, Bellway and Rotork reporting

Tuesday continues a much quieter week as a minority of companies report while their rivals are sunning themselves on the beach, including Standard Life, InterContinental Hotels, Bellway and Rotork.

Standard Life’s merger with Aberdeen is due to complete on 14 August, so Tuesday's interims will be the last set of numbers produced on a standalone basis.

In May, the company said it had assets under administration as of 31 March of £361.7bn, up from end-December's £357.1bn.

By the end of June, total group AuM from continuing operations are expected to be £365.8bn, UBS forecast, with total inflows of £0.9bn. IFRS operating profits are forecast to rise 2% to £347m driven by the investments arm driving fee revenue growth and UK and Europe, with Pensions and Savings net inflows seen as stable. An interim dividend of 7.0p was estimated.

Deutsche Bank predicted profits of £344m compared with £341m in the first half last year, on the assumption of declining profits from the group’s spread-based businesses to £29m from £63m, which investors are expected to ignore both because of the one-off nature of any positive / negative surprises and the fact that these operations are in the long-term non-core. Deutsche's view is that "the shares now need material evidence of recovering net inflows or imminent M&A to justify the current rating" of more than 12 times 2019 earnings. "Another possible driver of the recent share price strength is the increased index weighting of the combined group if this is the case, then we would expect some weakness post 14th August as the index buying is satisfied".

InterContinental Hotels is also putting out its half-year results, with its shares slowing their rise but still enjoying upward momentum. IHG last updated the market on trading in early May, when revenue per available room was up 2.7% globally.

Since then, noted broker Numis, market data for the US shows a slight deceleration from 3.2% to 2.4%. "In our view demand is relatively robust (c.2%) but supply growth has started to pick up and is now running at just over 1.8% US-wide and at double
digit rates in certain markets… As a result RevPAR growth is starting to normalise, which is unsurprising for a hotel cycle now into its 8th year of positive growth," analysts wrote, forecasting EBIT growth of 5%, enhanced at the EPS line by the $1.9bn cumulative capital return from the last two years.

UBS forecast revenues of $882m with revpar growth of circa 3%, EBIT of $369m and net income of $224m (up from $203m last time).

Bookmaker Paddy Power Betfair already released the top-line figures of its results after pre-announcing that chief executive Breon Corcoran was stepping down after 16 years in the job. The company said revenue growth would be up 9% and underlying EBITDA up 21% when it reports on Tuesday. Guidance was given for full year 2017 underlying EBITDA, including the impact of the acquisition of DRAFT, of between £445m and £465m.

Housebuilder Bellway has already guided for volume growth to approach 10% year-on-year and low single digit average selling price growth for full year results. Furthermore, Bellway had guided for EBIT margins in excess of 22%.

Numis predicted the main focus of the statement will be on current trading trends and the strength of the order book. "We suspect that the group will have continued to trade well and a continuation of such trends would make our FY2018 estimates look very cautious. In our view Bellway remains one of he most attractive housebuilders in the sector given its conservative guidance, strong profit growth, strong balance sheet and it's rating discount to the wider sector."

Paysafe, which is currently subject to an preliminary offer from CVC/Blackstone, is also due to report interim results. Any update on the takeover "will be key", said UBS, "particularly whether we will get any visibility on what value is being generated from the Asia Gateway". Regarding results themselves, analysts expect the focus to be on organic growth and EBITDA margins, with the company having guided for margins to expand slightly on a full year basis.

Pets at Home will report a trading update for the first quarter, with much focus likely to be on the impact of price investment on the Merchandise division. At the preliminary results stage management highlighted a positive response to the pricing initiative with a 1.0% like-for-like improvement in the initial period. Analysts at Shore Capital said they were forecasting a fairly conservative quarter "as we feel it is very much early days in terms of how management strategy is shaping trading", but the merchandise developments "could ease recent sentiment on the core business and also give management the confidence to extend the depth of its strategy".

Rotork reported an in-line first quarter, with order input up 2.7% on constant currency while sales were down 1.4%. This suggested a slightly slow start to the year on deliveries, said UBS, noting that oil & gas remained challenging in downstream, while upstream/midstream improved, power and industrial markets were good and water flat. Management have guided for an second-half bias to profits for the full year with margins expected to be down in the first half. "The focus will be on outlook for H2, as well as an update on end-market trends, especially in the context of the recent weakening of the oil price from its highs," UBS said.

Synthomer also is due to update on its first half performance, having issued full year guidance for resilient trading in Europe and Asian nitrile continuing to be affected by additional industry capacity, although partially offset by a full year of Performance Adhesives & Coatings and 10 months of Perstorp Belgium. Deutsche forecast H1 underlying PBT to be up 15% to £70m, driven by FX, growth in Europe & North America and the Hexion and Perstorp Belgium acquisitions.

Tuesday August 08

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Balance of Trade (GER) (07:00)
Current Account (GER) (07:00)

FINALS
Hargreaves Services

INTERIMS
Clarke (T.), InterContinental Hotels Group, IWG , Mereo Biopharma Group, Morgan Sindall Group, Mporium Group, Paddy Power Betfair, Paysafe Group , Polypipe Group , Quarto Group Inc., Rotork, SIG, Standard Life, TP ICAP, Verona Pharma, Worldpay Group, Zotefoams

TRADING ANNOUNCEMENT
Bellway, Henderson Group, IWG , Mereo Biopharma Group, Pets at Home

GMS
Milestone Group

AGMS
Frutarom Industries Ltd GDR (Reg S), Tata Steel Ltd GDR (Reg S)

TRADING ANNOUNCEMENTS
Bellway, Clarke (T.), Pets at Home Group

FINAL DIVIDEND PAYMENT DATE
VP

QUARTERLY PAYMENT DATE
JPMorgan Asian Investment Trust