Sheridan Adams, from the Share Centre

The forward look with Sheridan Admans

Sunday, February 19, 2012
6:30 AM

Sheridan Admans, investment research manager at The Share Centre, gives his thoughts on what to expect from companies announcing results w/c 20 February 2012.

Tuesday

AMEC (full year results)

Investors will be looking for some indication of how the group intends to utilise its growing cash pile. In recent years there have been calls for AMEC to enter into a share buyback programme; however CEO Samir Brinkho prefers to use the cash for acquisitions.

Despite economic headwinds we are expecting AMEC to deliver satisfactory results. We expect these to be supported by high oil prices and demand created by many oil majors replacing reserves in increasingly expensive developments due to harder to reach deposits.

We currently list AMEC as a BUY

Wednesday

Companies reporting today include Rexam (preliminary results) – HOLD

Thursday

Capita (final year results)

The market has been worried over Capita’s lack of contract wins, so the announcement last Tuesday of a contract with the army has given the share price a timely boost. However, investors will be keen to know about the future pipeline and the group’s overall outlook for 2012.

We currently list Capita as a HOLD

Centrica (final year results)

The recent blast of cold weather will have come too late to help out these results. Instead the market will be keen to know about recent acquisitions and if there is a possibility of more to come.

We currently list Centrica as a BUY

British American Tobacco (preliminary results)

Investors will be looking to see if the company’s higher price strategy in many developed economies and growth in its emerging market operations are helping to offset falling volumes in Europe and the US.

We currently list British American Tobacco as a HOLD

Companies also reporting today include Capital Shopping Centre (full results) – HOLD, RSA Insurance (full results) – HOLD, Ashmore (interim results) – HOLD, Royal Bank of Scotland (full results) - SELL

Friday

Lloyds Banking (final year results)

The problems for the sector have been well documented, so long suffering investors will be concentrating on the outlook comment in the hope that long term recovery plans remain in place. Information or comments on the health of the UK, especially the housing market, will also be of interest.

We currently list Lloyds Banking as a HOLD

Companies also reporting today include Hammerson (preliminary results) - HOLD

Economic Diary

Economic announcements for the w/c 20 February 2012

21 February – Public Sector Finances, January 2012 – ONS

Given that the UK economy contracted in Q4, December’s figures on public debt were quite encouraging, and that is despite the alarming headline figure that public debt has passed £1 trillion. Overall, government borrowing in December was below last year’s figure, and appears to be on course to undershoot the OBR’s forecast of £127bn deficit for the financial year. With early indicators, such as PMI indices, suggesting that January was a better month for the economy than had previously been expected, will the data for January still point to a falling deficit?

22 February – Minutes of the Monetary Policy Committee Meeting held on 8 & 9 February

Few commentators were surprised when the Bank of England announced £50bn worth of quantitative easing (QE) earlier this month. But was the decision unanimous, and did any members argue for an even bigger boost? Were there any hints that additional QE measures may be announced later this year?

Other economic announcements include:

21 February

• Public Sector Finances, January 2012 – ONS

22 February

• Minutes of the Monetary Policy Committee Meeting held on 8 & 9 February

23 February

• Monthly Industrial Trends Survey – CBI

24 February

• Second estimate of GDP – Q4 2011

• Index of Services – December 2011

• Patterns of Pay – 1997 – 2011 ASHE Results