The week ahead: SIG, Aldermore
4th March 2016 16:47
by Lee Wild from interactive investor
Share on
Monday 7 March
Trading statements
Abcam, Irish Continental Group, RTC Group, Penna Consulting, Telit Communications, Escher Group, Clarkson
Tuesday 8 March
Trading statements
Regenersis, Allergy Therapeutics, St Ives, Paddy Power Betfair, Zegona Communications, SQS Software Quality Systems, Tyman, Brammer, Foxtons, Forbidden Technologies, Equiniti Group, esure, Dialight, CLS Holdings
Wednesday 9 March
Struggling building materials supplier
steps up with full-year results midweek. It's still smarting from a savage profits warning which triggered a sharp plunge in the share price to near-three-year lows.A further trading update in January failed to restore order despite management maintaining that underlying profit before tax for 2015 will be within its previously stated £85-90 million range. It was £98 million the year before. Gross margin will be flat year-on-year.
SIG blamed its warning on a difficult third-quarter in France and the UK Repair, Maintenance and Improvement (RMI) sector. But Adrian Kearsey at Panmure Gordon believes there are early signs of stability.
"With the forward price/earnings multiple of 11x, SIG is trading on a double-digit discount to the sector," says the analyst. "With the earnings profile becoming clearer and self-help initiative delivering we expect the share price will continue to recover some of the declines since last autumn."
Kearsey still rates SIG shares as a 'buy' with 195p price target.
Trading statements
Prudential, Restaurant Group, SIG, 4imprint, StatPro Group, Tri-Star Resources, Portmeirion, G4S, Lookers, Hochschild Mining, Hill & Smith, Mincon Group
Thursday 10 March
Last year was poor for
, certainly in terms of share price performance. Around 43% of the specialist lender's net loan book is buy-to-let mortgages, with owner-occupied at 22%.It's good business, clearly, but the chancellor's 3% increase in stamp duty on second homes and buy-to-let from 2016 could reduce demand for mortgages. Restrictions on higher-rate tax relief on buy-to-let interest payments from 2017 could, too.
Just three weeks ago, Aldermore shares had almost halved from their peak in July last year, and the outlook was, apparently, grim. But, as we report elsewhere this weekend, banks are back in fashion, and so-called challenger banks are leading the charge.
Aldermore's market capitalisation has grown by over a quarter since mid-February, and the shares now back above the IPO price of 192p.
Analysts at Peel Hunt expect full-year net interest income of £119.6 million in 2015, giving adjusted pre-tax profit of £90.6 million and adjusted earnings per share of 19.6p. Look for net asset value a tad under 130p.
"Aldermore's diversified deposit funding strength supports growth across both SME and specialist residential lending," writes the broker. "The shares are undervalued, trading on a 1.3x 2016E price/net asset value ratio due to the sentiment towards the buy-to-let market."
Trading statements
Amec Foster Wheeler, Eagle Eye Solutions, Michael Page International, Aldermore, Faron Pharmaceuticals, Home Retail Group, Fenner
Friday 11 March
Trading statements
Wetherspoon (JD), Just Retirement, Computacenter, Pace, Old Mutual
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.