Friday preview: Consumer confidence set to take a dip

Consensus was for another dip in the reading to -7, after rising two points to the -5 level reported in May.

Indeed, earlier in the week, data from YouGov and the CEBR showed a “pronounced collapse” in consumer confidence following the general election and subsequent hung parliament, to 105.2 in the week following the vote from 109.1 in the week before.

“The real cause for alarm will be the cooling of the property market as this is one of the key things that has propped up consumer confidence over the past few years,” noted YouGov head Stephen Harmston at the time.

It will be slim pickings on the corporate front, with Aggreko’s trading statement set to deliver a short statement on its first half and an update to its full-year guidance.

Analysts at UBS said they were expecting “continued improvement” in revenue trends, after the firm’s 2% increase in the first quarter.

“However, we believe the implications for the 2018 outlook are currently more important.

“Capex guidance for this year currently stands at c£300m and any change would be closely watched.”

UBS said the issue for Aggreko was the PS Utility order intake trend, which was “very weak” in May at 156MW compared to 486MW year-on-year.

“Aggreko needs to reach 1,200MW for FY17 overall in order to maintain the volume of fleet on rent in 2018 overall given a 30% churn rate.

“Without this PS Utility profits would fall significantly again in FY18.”

Also on the corporate agenda, Serco’s trading statement is set to be equally brief, covering the first half period with a comment on expectations.

Analysts at UBS said they also expected little change in near-term consensus, pointing out that the only big news recently was a large contract that was not due to begin until 2020.

“H116 saw some one-off factors that set a high comparison base for H117 - we expect profits in H1 to be down significantly year-on-year,” UBS noted.

It said overall it was looking for full-year revenue in 2017 of £3.1bn, EBITA of £65m-£70m, with revenues falling further in 2018 to £3bn.

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Retail Sales (GER) (07:00)
Producer Prices (FRA) (07:45)
Consumer Price Index (EU) (10:00)
Chicago PMI (US) (14:45)

UK ECONOMIC ANNOUNCEMENTS
GfK Consumer Confidence June (00:01)
Q1 GDP second revision (09:30)
Business investment Q1 (09:30)
April Index of services (09:30)
Q1 Current account (09:30)

TRADING ANNOUNCEMENTS
Aggreko, Serco Group

GMS
Accor

AGMS
Alpha Bank SA, William Hill, Sixt SE