Wednesday preview: ITV and TalkTalk results in focus, Draghi goes Dutch

ITV and TalkTalk results are under the spotlight for investors on Wednesday, while euro currency traders will be keeping an beady eye on Mario Draghi's speech in the Netherlands.

Hot on the heels of boss Adam Crozier's fairly hasty retirement, ITV is due to release its first-quarter update, which will include revenue and audience data.

Back in March ITV warned advertising revenues were likely to be soft for the opening months of the year, with guidance given that net advertising revenues are going to be down around 9%, with March down 15%.

UBS said it expected revenues of £734m, a 2.7% decline on the first quarter last year, with broadcast and online revenues declining 6.2% and ITV Studios up 6% benefiting from currency gains.

Analyst at Citi forecast group external revenue of £730m.

"If there is scope of a positive surprise it may come via the Online, Pay & Interactive."

Audience data "should be solid", with recent BARB data indicating the ITV 'family' of channels saw its share of viewing up circa 2% in Q1.

Citi said the main focus for investors will be the guidance for the second quarter, with ITV having already guided to 5% growth for April.

Dunstone Talks strategy and dividends

Alongside telecoms group TalkTalk full year results, founder Charles Dunstone, having just taken back the tiller again as executive chairman, is likely to outline his new strategy alongside issuing guidance for the new year and could even rein in the dividend.

The consensus forecast, according to Reuters, is for revenue of £1.8bn and EBITDA of £311m, below guidance for EBITDA to be towards the lower end of the £320-360m range.

Barclays analysts said they believe the key challenge for TalkTalk for the year ahead is "profitably stabilising the on-net customer base in the aftermath of the cyber attack and product rebranding/repositioning of the product late last year".

Barclays expects revenue and average revenue per user (ARPU) trends to be monitored closely "given there are two opposing drivers – one is a drag to ARPU from customers recontracting…the other is price increases impacting the proportion of the base not yet recontracting to the new tariffs".

Barclays estimated the dividend will be kept flat next year, "but can see a scenario where the company looks to rebase it at a lower sustainable level".

The bank also previewed interim results from Compass, seeing results "as a potentially positive catalyst" as it expects a second quarter improvement in organic growth and an upbeat tone from management regarding the organic growth outlook helped by contracts signed in Europe opening and the recovery in the rest of the world.

Barclays also crossed its fingers for a special dividend announcement of £400m. We forecast H1 EBIT of £902m, PTP £847m, EPS 38.3p and DPS 11.3p (based on underlying earnings growth ex FX).

Barratt Developments is scheduled to release a trading statement, with analysts at broker Hargreaves Lansdown noting that the mood among housebuilders has "gradually evolved from one of trepidation in the immediate aftermath of the Brexit vote, to cautious optimism, and is now back at buoyant".

"We’ll be keeping an eye out for any comment the group has on the London market, where Barratt is set to step up activity in the coming months following a hiatus in building during the first half."

UBS said it expected sales per site per week since January to be modestly up on last year's 0.71 sales per site per week.

"Trading conditions YTD have been reported to be robust by peers so far and we expect Barratt to have witnessed the same conditions."

National Express will release a first-quarter statement that should detail revenue trends and progress made within the key divisions.

UBS said the main areas of interest surrounding the results will likely be volume and revenue growth for the UK bus and coach businesses, progress made with pricing negotiations in North American school buses, revenue growth progress in Spain, and potential bids for new rail and bus contracts in Germany, the Middle East and Singapore.

Draghi goes Dutch

The European Central Bank president Mario Draghi will give a speech at the Dutch Parliament at midday, with currency traders looking for clues in relation to the bank’s monetary policy.

With attention on European politics slipping after Emmanuel Macron's French election victory, for the euro to retain its upward path versus the dollar a fresh incentive may be needed, said analyst Jane Foley at Rabobank.

While soft European data and headline inflation has triggered a debate as to whether the ECB could be prepared to shift its forward guidance, Draghi has only fed a few crumbs to euro hawks, saying in March that the sense of urgency with respect to the economic outlook had abated and last month commenting that downside risks had further diminished.

"That said, the ECB has not altered its forward guidance which remains decidedly dovish," Foley said. "There is speculation in the market that the ECB could alter this guidance in the coming months to suggest a reduction in policy accommodation early next year.

"The EUR may need a less dovish ECB for EUR/USD to push more convincingly above the 1.10 level, particularly given market expectations of a Fed rate hike on June 14."

Wednesday 10 May

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Crude Oil Inventories (US) (15:30)
Import and Export Price Indices (US) (13:30)
MBA Mortgage Applications (US) (12:00)

FINALS
Braemar Shipping Services, TalkTalk, Warpaint London

INTERIMS
Compass Group

TRADING ANNOUNCEMENTS
Barratt Developments, Bank Pekao, ITV, National Express, Palm Hills Developments SAE, Vesuvius, Wood Group

AGMS
Aberdeen Asian Income Fund Ltd., Anglo Pacific Group, Aviva, Barclays, Be Heard Group, British Smaller Companies VCT 2, Cape, Dalata Hotel Group, Ebiquity, EKF Diagnostics Holdings , GLI Finance Limited, HGCapital Trust, IP Group, ITV, Marshalls, Mobeus Income & Growth Vct, National Express Group, Novae Group, OneSavings Bank, Parity Group, Permanent TSB Group Holdings, Rentokil Initial, Vesuvius, Wood Group (John), Worldpay Group

FINAL DIVIDEND PAYMENT DATE
Smith & Nephew, Stadium Group, Virgin Money Holdings (UK)

QUARTERLY PAYMENT DATE
JPMorgan Asian Investment Trust