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Tuesday preview: BoE and eurozone data; results from PZ Cussons, ZPG

By Oliver Haill

Date: Monday 29 Jan 2018

LONDON (ShareCast) - (ShareCast News) - Tuesday gets busier in terms of macroeconomic data, especially in the eurozone, while in the Brexit debate escalates from the transition-period tussle at the start of the week into a formal face-off between the House of Lords' ermine-caped crusaders.
In UK corporate news, there are updates scheduled from PZ Cussons, Domino's Pizza, ZPG and CYBG, plus consumer lending and credit numbers from the Bank of England, while Governor Mark Carney will also be lightly grilled in a parliamentary hearing.

It should be a big day for the euro, with gross domestic product data and economics, consumer confidence and industrial sentiment releases for the bloc and individual member states, plus German inflation numbers.

Eurozone fourth-quarter GDP is not expected to be much changed from 0.6% quarter-on-quarter growth in the third quarter, with annual growth for the bloc at 2.6%, its fastest pace since the immediate post-financial crisis rebound in 2010.

Economists at HSBC said leading indicator surveys have remained very strong, suggesting growth will at the least maintain this pace in Q4.

"The composite PMI index increased by 2.1 [percentage points] over the course of the quarter to 58.1, the highest since February 2011. Consumer confidence also improved significantly. With regards the hard data, industrial production increased by 0.4% and 1.0% month-on-month in October and November, respectively."

RBC Capital Markets said based on November's hard data, it was upgrading its Q4 GDP estimate to 0.7%, leaving full-year 2017 GDP growth at 2.5%, the fastest full-year growth rate enjoyed by the euro area economy since 2007.

Following the Bank's monetary and lending stats at 0930 GMT, at 15:30 GMT Carney will answer questions from the house of Lords' economic affairs committee.

In between, the two-day Lords debate on a key piece of Brexit legislation, the EU withdrawal bill, will have its second reading, with close to 200 peers putting their name down to speak.

On the credit stats, the market is expecting mortgage approvals in December to have fallen to 63,700 from 65,139 a month earlier. Consumer credit is seen remaining roughly at the 1.4bn seen in November.

Last week, mortgage approvals from the main high street banks were shown to have fallen to 36.1K in December, the lowest level since April 2013, from 39.0K in November. Economists at Pantheon Macroeconomics said the the official measure of approvals, which includes specialist lenders, is therefore likely to have tumbled 60.5K from 65.1K.

Meanwhile, the drop in car sales and consumers' confidence in December suggest that net consumer credit moderated to 1.3bn, from 1.4bn in November, Pantheon added.

The European Commission's economic sentiment survey, which is released at 1000 GMT, may have been boosted by the pick-up in equity prices. This is a seasonally adjusted version of a UK survey that will be released by GfK's the following day.

COMPANY NEWS

PZ Cussons, the maker of such household favourites as Imperial Leather shower gel and Original Source shampoos, is due to report interim results on the back of a warning in mid-December that operating profits will be around 10% lower than the previous period due to reduced margins in some business units in Europe and Africa.

The FTSE 250 company said strong profitability in Asia was being offset by reduced margins in Europe and Africa as a result of the economic environment and competitive trading conditions.

UK consumers were said to be shopping cautiously as general cost inflation outstrips wage growth, and amid broader economic uncertainty, while its business in Nigeria has been hit by the devaluation of the naira.

Broker Numis forecast overall sales growth of 0.7% to 381m with good growth in Asia helping to offset lower sales in Africa and low growth in Europe. Group EBITA will be 10% lower at 37.6m, as guided.

Analysts forecast adjusted PBT will be 9.6% lower at 36.3m and that adjusted EPS will be 9% lower at 5.9p.

ZPG is expected to make a statement alongside its annual general meeting, fresh from confirmation last week that rival OnTheMarket will float on 9 February.

ZPG last updated the market in late November when a solid set of annual results was accompanied by the acquisition of Dutch automated property valuation and statistical market analysis firm Calcasa.

Outlook comments at the time of the results confirmed that 2018 had started well across both divisions and that management remained comfortable with market expectations for 2018.

Domino's Pizza is expected to put out a trading update on its fourth quarter, having in October served up a third quarter update showing group system sales rising 11.9% on an organic basis to 286.4m, with like-for-like sales of 8.1%.

For Q4, Numis forecast LFL sales growth slowing to 5%, reflecting the more challenging comparative quarter from 2016.

However, the initiatives introduced in September on pricing and marketing, such as "Dine for 9.99" and "The Official Food of Everything" campaign would have had a full quarter impact.

For the full year, analysts forecast PBT of 89.1m, though this is 1% below consensus, and for 2018 estimate UK LFL sales growth of 3%, 80 store openings and group PBT of 98.8m, versus consensus 97.7m.



Tuesday January 30

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Business Climate Indicator (EU) (10:00)
Consumer Confidence (US) (10:00)
Economic Sentiment Indicator (EU) (10:00)
GDP (Preliminary) (EU) (10:00)
Import Price Index (GER) (07:00)
Industrial Confidence (EU) (10:00)
Services Confidence (EU) (10:00)

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

FINALS
Oxford Biodynamics

INTERIMS
Filtronic, NWF Group, PZ Cussons

TRADING ANNOUNCEMENTS
Avocet Mining, CYBG , Domino's Pizza Group, Restore, UDG Healthcare Public Limited Company

GMS
Wizz Air Holdings

AGMS
Greencore Group, Hollywood Bowl Group, Patisserie Holdings , Servoca, Solgold, UDG Healthcare Public Limited Company, Utilitywise plc, ZPG Plc

FINAL DIVIDEND PAYMENT DATE
Hargreave Hale AIM VCT 1, Up Global Sourcing Holdings

QUARTERLY EX-DIVIDEND DATE
Marsh & Mclennan Cos Inc.