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Wednesday preview: Results due from Britvic, Pennon, RPC and ZPG

By Oliver Haill

Date: Tuesday 28 Nov 2017

LONDON (ShareCast) - (ShareCast News) - Wednesday will see results from a raft of mid-caps including Britvic, Pennon, RPC and ZPG, a deluge of economic data from around Europe, a possible upward revision of US economic growth and a speech from outgoing Fed Chair Janet Yellen.
Bank of England deputy governor Jon Cunliffe will be giving interviews on BBC radio from 0600, while his boss, Mark Carney, will give a speech at the more civilised time of 1400 GMT at the FMSB, the Fixed Income, Currencies and Commodities Markets Standards Board.

By this time, we will have seen the second revision to third-quarter US gross domestic product, which is expected to see GDP bumped up to 3.2% from the initial 3.0% quarter-on-quarter annualised growth, due to recent revisions of underlying data.

But for Deutsche Bank, a speech from Dr Yellen will be the "main focus" on the day as she gives testimony before the congressional joint Economic Committee of Congress in the afternoon.

Economists at Investec added that Yellen's testimony "may give us a better précis of the collective views of her committee on issues such as labour market tightness, low inflation, fiscal policy and asset price valuations". "Of course markets will also take a cue from fiscal policy developments, specifically the degree of progress in securing the approval of the tax cut package."

As well as this, the core poeraonl consumption expenditure measure of inflation, Yellen's preferred measure, will be released on the day, with the consensus forecast for an increase to 1.4% from the previous 1.3%. The Fed's Beige Book will also be out in the evening.

For European data, there's UK lending figures, German flash November consumer prices, French GDP and November confidence indicators for the eurozone all due.

Drinks maker Britvic will give a fourth-quarter update alongside its annual shareholder meeting.

The third quarter saw an increase in sales and last month Britvic said it planned to close its plant in Norwich and transfer production of Robinsons and Fruit Shoot to its manufacturing sites in East London, Leeds and Rugby, in a move that will affect 242 employees.

For the fourth quarter,the consensus forecast is for group sales of £397.9m.

UBS forecast Q4 organic sales growth of +0.6% in UK carbonated drinks, a decline of 2.4% in stills, a fall of 2.2% in Ireland and growth of 1.3% from overseas as France faces a "significant headwind" from weather in syrups.

Analysts forecast full year 'clean EBITA' of £189.1m compared to the consensus estimate of £188.4m, noting that management said it was content with the consensus expectations at Q3 results.

Pennon Group will report fist-half results that are to be read against a backdrop of major regulatory and political shifts, with some analysts warning it could be forced to slash its dividend from 2020 due to incoming regulation.

Share prices of the UK network utilities have dropped materially due to varying degrees of expected cuts to future returns and rising political risks.

Deutsche expects a solid set of results with continued sector-leading returns from the water business and higher profits from waste.

"We believe the key focus is likely to be on Viridor where we expect an update on the termination process for the Greater Manchester PFI contract and on the delayed Glasgow energy-from-waste plant. While Viridor has faced some challenges over the last year, we believe the results may provide scope for the company to reassure on its performance."

Analysts expect Pennon to report a 6% increase in EBITDA to £259m, an a 5% increase in EPS to 24.8p and a 7% increase
in the dividend to 11.9p

Full year results from ZPG are due, a week after the Zoopla and uSwitch owner dropped out of the race to buy GoCompare.

For the full year, the consensus forecast is for 21% growth of revenues to £240m with EBITDA of £92m and net profit after tax of £57m.

UBS predicts EBITDA could reach £94m, a rise of 22%. Adjusted NPAT is seen growing 10% to £58 NPAT, excluding the impact from Ravensworth or Money acquisitions.

Interim results from LondonMetric will show how the property company is evolving into a logistics play to take advantage of the strictural retail shift towards ecommerce.

Broker Numis expects these results to "reaffirm this message", with the company's target 70% portfolio weighting to distribution assets likely already reached ahead of the 2018 target.

"LMP continues to use development to drive returns (including speculative developments on a controlled scale), and recent acquisitions suggest the company is looking to take advantage of the benign sector outlook," analysts wrote.

RPC Group will also release results for the six months to 30 September. The plastics group has already confirmed that revenues for the half year are well ahead of last year's, with margins and profitability being ahead of management's expectations for the period.

Financial performance during the first six months of the year has been driven by organic growth, acquisitions and associated, synergies, lower exceptional costs and currency tailwinds that have offset a modest polymer price headwind.

Numis forecasts include adjusted PBT of £185.5m, adjusted EPS of 34p and a dividend of 8.8p per share.

Wednesday November 29

Business Climate Indicator (EU) (10:00)
Consumer Confidence (EU) (10:00)
Industrial Confidence (EU) (10:00)
Economic Sentiment Indicator (EU) (10:00)
Services Confidence (EU) (10:00)
GDP (Preliminary) (US) (13:30)
MBA Mortgage Applications (US) (12:00)
Pending Homes Sales (US) (15:00)
Crude Oil Inventories (US) (15:30)

Consumer Credit (09:30)
M4 Money Supply (09:30)
Mortgage Approvals (09:30)

Brewin Dolphin Holdings, Britvic, Impax Asset Management Group, ZPG Plc

Findel, LondonMetric Property, Motorpoint Group, Pennon Group, Redcentric, RPC Group, Telford Homes, Versarien

Eve Sleep PLC, Softcat

Bluefield Solar Income Fund Limited, Genedrive , IronRidge Resources Limited (DI), Oilex Ltd., Oncimmune Holdings, Target Healthcare Reit Ltd, Thor Mining

Panther Securities