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The week ahead: Big day for Sirius Minerals
By David Brenchley | Fri, 16th June 2017 - 14:31
The FTSE reshuffle takes effect Monday, while investors get an update from a retailer just days after grim retail sales data.
Monday 19 June
The FTSE reshuffle changes take effect from 8am Monday, with plenty of replacements for investors to be aware of.
Hikma has been hit by delays bringing its generic version of GlaxoSmithKline's (GSK) Advair Diskus – it treats breathing problems - to market, and is currently trading just above three-year low levels. They will be replaced by G4S (GFS) and Segro (SGRO).
Elsewhere, popular potash miner Sirius Minerals (SXX) finally moves to the main market and will take its place in the FTSE 250 index, alongside Coats (COA), FDM (FDM), Melrose Industries (MRO) (which gets immediately placed on the reserve list for promotion to the FTSE 100 should one of the blue-chip's constituents go bust or get taken over), Pershing Square (PSH) and TBC Bank (TBCG).
Globalworth Real Estate Investments, Rasmala
Tuesday 20 June
Retailers have had a horrible time after "worrying" retail sales data pointed to a tough outlook for the sector. With inflation running at almost 3% and wage growth struggling to catch up, consumers are finding it tough. This culminated in the worst month for growth in sales volumes in over four years.
The general retailers sector was a sea of red on Thursday and we heard from DFS Furniture (DFS), which warned on profits, last week and there will be subsequent updates from others in the coming month and a half, starting with N Brown (BWNG) on Tuesday.
Having hit a 14-month high of 292p on 5 June, the home shopping business was one of the worst hit Thursday, plummeting by more than 5%. It also last week saw chairman of five years Andrew Higginson, also boss at Morrisons (MRW), hand in his notice in order to "pursue opportunities in private equity".
The seller of fashion for the plus-sized and over-50s updates the market on its first-quarter trading performance.
After a significant turnaround in performance since the end of April (currently 15% up in share price terms), "investor attention will be on the performance in product sales against tougher comparisons as the self-help initiatives from the Fit for the Future IT programme continue to be delivered", UBS says.
The broker expects product sales growth of 6% to make up for 2% decline in financial services to give overall group sales growth of 3.6%.
"There was an increased degree of confidence with regards the US business at the full-year results," the broker said.
Fresh off hitting 10-year highs recently, watch for a third-quarter interim management statement from Wolseley (WOS).
UBS had been bullish, arguing that the plumbing supplier had been trading on a discount to US-listed peers. UBS said 'buy' with a 12-month price target of 5,475p.
However, since March that US peer group has de-rated by over 10% and now US dollar weakness means that discount has narrowed. "Wolseley's decision not to pursue a more radical corporate transformation through a re-listing means the remaining discount may persist," says analyst Gregor Kuglitsch, "and we see insufficient upside to warrant a 'buy' rating."
Therefore, the target has been taken down 3% to 5,300p and the recommendation reduced to 'neutral'.
Kuglitsch pencils in third-quarter like-for-like (LFL) revenue growth of 4.5%, driven by 6% in the US, "broadly consistent with the LFL growth Wolseley saw up to March of 4.5% for the group and 5.5% for the US".
Third-quarter underlying operating profit took a £14 million hit due to there being two fewer trading days in the period and should come in at £267 million.
Wolseley, N Brown
Faroe Petroleum, Marwyn Value Investors, Coca-Cola HBC, Evraz, 21st Century Technology, Water Intelligence
Wednesday 21 June
Tarsus, Third Point Offshore Investors, Xeros Technology Group, St Peter Port Capital, Blackstone/GSO Loan Financing, UK Commercial Property Trust
Thursday 22 June
Universe Group, Senterra Energy, Union Jack Oil, Neptune-Calculus Income and Growth VCT, Hon Hai Precision Industry, ECSC Group, Adgorithms, Saga, Petropavlovsk
Friday 23 June
BH Macro Limited, Oracle Coalfields, Griffin Mining, Trinity Exploration & Production
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.
|BH MACRO LIMITED ORD NPV (GBP)||1,914.00p||0.00%|
|BROWN (N) GROUP||305.75p||-0.08%|
|SVG CAPITAL PLC ORD GBP0.10||738.45p||-0.07%|
|MORRISON (WM) SUPERMARKETS||239.80p||-0.50%|
|PERSHING SQUARE HOLDINGS LT...||1,217.00p||-0.16%|
|FDM GROUP (HOLDINGS)||774.00p||0.91%|
|TBC BANK GROUP||1,668.00p||-0.06%|
|All data 15min delayed as of: 09:01:50 23/06/17|