The week ahead: M&S, Halfords, insurers

Monday 6 November

Trading Statements

Grafenia, Kosmos Energy

AGM/EGM

Murray Income Trust, Genesis Emerging Markets Fnd, Mid Wynd International Investment Trust

Tuesday 7 November

Hiscox (HSX) helps kick off a round of results from London-listed insurers Tuesday. The specialist UK non-life insurer said last month that the impact of hurricanes Harvey and Irma was expected to be about $225 million (£170 million).

We’ll get a clearer idea of what the losses will be in this third-quarter update. There should be more news on the hit from Hurricane Maria and the Mexican earthquakes, and a better steer on the impact on rates going forward.

Broker Stockdale has provisionally cut its full-year 2017 pre-tax profit estimate to £88 million but will continue to monitor “as these claims develop”. Profit forecasts for 2018 remain unchanged “but this may prove conservative,” the broker adds.

Trading Statements

Hiscox, Jardine Lloyd Thompson, Tyman, G4S, Direct Line Insurance, ConvaTec, First Derivatives, Castleton Technology, Carclo, Verona Pharma, UP Global Sourcing Holdings, Associated British Foods, Imperial Brands

AGM/EGM

Papillon Holdings

Wednesday 8 November

A grim outlook from retail bellwether Next  (NXT)dumped the retail sector recently, including Marks & Spencer (MKS). Now, the high street favourite gets its chance to prove sellers wrong.

Investec Securities pencils in a 12% slump in half-year pre-tax profit to £203 million due to weak sales and as foreign exchange and cost pressures fall mostly in the first half.  “Reassurance on current trading is needed for the shares to go better in our view,” says the broker. “For us, valuation is not compelling enough given poor earnings visibility. Sell.”

Management does not typically talk about current trading, but Investec looks for tighter execution to result in a stronger performance than the 0.1% decline in like-for-like sales during the first quarter. At the Clothing & Home division, it expects gross margin to be down, with FX pressures partially offset by better buying and less promotions.

The analyst team at Barclays anticipate a 0.3% decline in first-half like-for-like food sales and gross margin decline of 60 basis points.  Clothing & Home is seen down 1.8%, while group underlying pre-tax profit is tipped to drop 13% to £201 million.

Trading Statements

Wetherspoon (J D), Onesavings Bank, Persimmon, Tullow Oil, Novae Group, esure Group, Wizz Air, JZ Capital Partners, Workspace Group, SSE, Sophos Group, Marks & Spencer, Tracsis

AGM/EGM

Ricardo, Strategic Equity Cap, Craneware, Pathfinder Minerals, Picton Property Income, Macau Property Opportunities Fund, Haynes Publishing

Thursday 9 November

Bikes to car parts chain Halfords (HFD) has been polishing up its numbers ready to present on Thursday. According to Investec estimates, interim pre-tax profit will be down 6% at £38.4 million. Consensus is for £37.4 million, which management has already said it is comfortable with.

Chiefs also believe they can fully mitigate the £40 million FX hit – “a potential profit upgrade gift to the new CEO,” says Investec, which has a ‘buy’ rating on the shares and 400p price target.

The broker believes a forward PE ratio of 10.5 is “undemanding given Halfords’ strong cash generation with potential for double-digit [total shareholder return] per annum, consisting of single-digit EPS growth, a 5.4% dividend yield and potentially a sustainable 3.0% (£20m) special dividend yield per annum.”

Shareholders in GlaxoSmithKline (GSK) will be nursing losses after the drugs major slumped in reaction to last month’s third-quarter results. The City didn’t like weaker-than-expected sales of respiratory products.

At least shareholders still receive decent income. A 19p dividend was declared for the quarter, part of an anticipated 80p for the full-year 2017. Glaxo shares go ex-dividend Thursday 9th November.

Trading statements

Beazley, SuperGroup, Informa, Hikma Pharmaceuticals, Coca-Cola HBC, IMI, Derwent London, Prime People, Sainsbury (J), National Grid, Renewi, Halfords, AstraZeneca, Auto Trader, Arrow Global, Aldermore, Inmarsat, Dairy Crest, Burberry Group, Gattaca

AGM/EGM

Urals Energy, Swallowfield, Redrow, Primorus Investments

Friday 10 November

Trading statements

BBA Aviation, Castings, Volex Group, Vedanta Resources, Burberry

AGM/EGM

Vinaland, Tlou Energy, Galliford Try

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Source.