Wednesday preview: Croda and ITV report; Boris Johnson becomes PM
Things will pick up on the earnings calendar on Tuesday, with results due from the likes of Croda and ITV while on the political front, Boris Johnson will take up his new role as Prime Minister after winning the Tory leadership race.
Deutsche Bank said it forecasts a relatively soft first half for specialty chemicals company Croda International, with pre-tax profit stable year-on-year at £175m as growth in the life sciences business and positive FX are offset by a soft performance in personal care and performance technologies.
"We expect H1 19 underlying sales to increase by 0.4% YoY for the group, (up +1.2% for the 'core' business) supported by improvement in life sciences offsetting weakness in industrial chemicals and a lack of growth in PC and PT.
"On outlook, we expect management to reiterate its guidance of further progress in 2019 with H2 likely to be better than H1 due to easier comps and no more headwinds from the biosurfactant plant and plant science."
Broadcaster ITV is also slated to report its half-year results. Laith Khalaf, senior analyst at Hargreaves Lansdown said 2019 has been another major sporting summer, but the tennis, cricket, football and netball has been spread across the other channels.
"Still, that doesn’t mean the group has nothing to shout about. Love Island has once again gripped the nation, breaking its own ITV2 viewing record by raking in an audience of over 6m. That, and the fact that over 20% of those viewers were streaming online, will surely feature in these results.
"However, how many people are watching is only one part of the equation. What investors will want to know is how much advertisers are willing to pay to get in front of the audience. Advertising trends have been weak since the Brexit vote, with ITV’s advertising revenue down 7% last quarter, so some positive news would be welcomed. Otherwise the onus will once again be on the Studios business to deliver the goods."
Investors will also be eyeing a trading update from drinks maker Britvic, particularly after Irn-Bru maker AG Barr warned last week that full-year profit was set to drop as much as 20% on the year, pointing to poor volumes following the introduction of the soft drinks levy and disappointing spring and early summer weather.
On the macroeconomic front, Markit's eurozone manufacturing PMIs for July will be released.
IHS Markit said in a note: "A rise in the eurozone PMI in June caused analysts to pull back on expectations of the scale of anticipated ECB stimulus, meaning July’s flash data will be especially closely watched ahead of the ECB’s policy meeting."
In the UK, all eyes will be on Boris Johnson as he officially takes up the role of Prime Minister.
Capital Economics said: "Despite his hard-line stance on the campaign trail, there is no way of knowing how Boris Johnson will handle Brexit once he becomes Prime Minister tomorrow.
"But it’s going to be turbulent and the chances of a no deal Brexit (and a general election and/or a Labour government) are surely higher now than they’ve ever been. Whatever happens, a loosening in fiscal policy appears to be baked into the cake."
Wednesday July 24
INTERIMS
Aptitude Software Group , Croda International, Drax Group, GlaxoSmithKline, Informa, ITV, Quartix Holdings , Tullow Oil
QUARTERLY PAYMENT DATE
Yew Grove Reit
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Crude Oil Inventories (US) (15:30)
M3 Money Supply (EU) (09:00)
MBA Mortgage Applications (US) (12:00)
New Homes Sales (US) (15:00)
FINALS
Totally, Van Elle Holdings
SPECIAL DIVIDEND PAYMENT DATE
Yew Grove Reit
AGMS
Aquila Services Group, Arkle Resources , Caledonia Investments, Experian, Fidelity China Special Situations , Mediclinic International , Mporium Group, QinetiQ Group, Tri-Star Resources , Trifast, Ultimate Sports Group, Vertu Motors, Water Intelligence, Wizz Air Holdings
TRADING ANNOUNCEMENTS
Antofagasta, Brewin Dolphin Holdings, Britvic, Empresaria Group, Marston's, PayPoint
UK ECONOMIC ANNOUNCEMENTS
BBA Mortgage Lending Figures (09:30)
CBI Industrial Trends Surveys (11:00)