Friday preview: Will RBS hesitate on dividend?
Friday should see RBS provide a date for its return to the dividend list, while the week also finishes with numbers from Essentra, IAG, Millennium & Copthorne, Mondi, Pets at Home and William Hill.
RBS will following its banking peers with half-year results, though its shares have had trouble keeping up, lagging the sector this year despite improving underlying profits. Having dealt with pension funding issues and drawn a line under its US misdeeds with a US penalty earlier this year and an announcement from the UK regulator on its GRG unit earlier this week, it would see to have overcome the major potential obstacles to paying dividends.
Friday, never hesitate, would be the advice for RBS from Cure-loving investors and indeed it would be wonderful surprise for investors to see the state-owned bank begin paying a dividend again.
Analysts at Morgan Stanley said: “An interim dividend would have a strong signalling effect.” Those at UBS said there should at least be some details on the timing of any capital release by dividend and buyback.
In May, British Airways owner IAG reported a first quarter operating profit of €280m before exceptional items, up from 2017's restated €160m.
The FTSE 100 company, which also owns carriers Iberia, Vueling, Level and Aer Lingus and has a minority shareholding in Norwegian Air Shuttle, saw passenger unit revenue for the quarter fall 0.7%, but up 3.5% at constant currency.
For the second quarter the consensus forecast is for EBIT of €848m, with a tailwinds coming from the BA computer outage last year.
Deutsche Bank forecast second quarter EBIT of €847m, with IAG's numbers predicted to prove most resilient in a "difficult" earnings season for the network carriers. "We forecast quarterly revenue per available seat kilometre of +1.0% and cost per available seat km excluding fuel of -1.2%." UBS forecast €812m EBIT on revenues up to €6.3bn from €5.95bn a year ago, with reported yields down circa 1%.
Over at Cobham, whose shares have lost two thirds of their value since hitting an all-time high in early 2015, there was a bit of further wobble last week as the defence and aerospace manufacturer revealed that Boeing had withheld payment over the a refueling tanker program and slipped out a warning that project delays will mean an estimated additional non-underlying charge of roughly £40m for this week's interim results for 2018.
The company has had a challenging period but analysts at Morgan Stanley recently said they saw an improved outlook with management stabilising performance. Structural headwinds in the group's portfolio felt to have largely played out by 2015 when Cobham generated 16% margins, but underperforming businesses since divested.
Deutsche Bank said these interims are "unlikely to instil confidence", however, seeing headwinds from FX, AvComm & Wireless and helicopters resulting in a fall in operating profit from £90m to £85m.
Friday August 03
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Balance of Trade (US) (13:30)
ISM Non-Manufacturing (US) (15:00)
Non-Farm Payrolls (US) (13:30)
PMI Composite (EU) (09:00)
PMI Composite (GER) (08:55)
PMI Composite (US) (14:45)
PMI Services (EU) (09:00)
PMI Services (GER) (08:55)
PMI Services (US) (14:45)
Retail Sales (EU) (10:00)
Unemployment Rate (US) (13:30)
UK ECONOMIC ANNOUNCEMENTS
PMI Services (09:30)
INTERIMS
International Consolidated Airlines Group SA (CDI), Millennium & Copthorne Hotels, Mondi, Royal Bank of Scotland Group, William Hill
Q2
Royal Bank of Scotland Group
SPECIAL DIVIDEND PAYMENT DATE
Chrysalis VCT, F & C UK High Income Trust B Shares
AGMS
Challenger Acquisitions Limited, Grand vision Media Holdings, Ukrproduct Group Ltd
FINAL DIVIDEND PAYMENT DATE
Aquila Services Group, Aveva Group, Bonmarche Holdings, Brown (N.) Group, Burberry Group, Caffyns, De La Rue, Hibernia Reit , KCOM Group, Next Fifteen Communications, TalkTalk Telecom Group , Telecom Plus, ULS Technology , United Utilities Group, Vodafone Group, Wincanton, Workspace Group, Xpediator
INTERIM DIVIDEND PAYMENT DATE
Autins Group, Chrysalis VCT, Heavitree Brewery, Heavitree Brewery 'A' Shares
INTERIM EX-DIVIDEND DATE
Jupiter Fund Management
QUARTERLY PAYMENT DATE
British Land Company, F & C UK High Income Trust , Scottish Inv Trust