Weekly outlook: M&G, LGIM and Berkeley report; UK GDP update

Key events for UK wealth managers for the week starting 7 March

LGIM’s City office

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Monday 7 March

  • – Full-year results from Clarkson
  • – Halifax UK house price index
  • – German factory orders
  • – In the US, quarterly results from Ciena

Tuesday 8 March

  • – Full-year results from M&G, Robert Walters, Greggs, Domino’s Pizza, Direct Line, Fresnillo and ConvaTec

The world’s biggest silver miner, Fresnillo has seven operating mines, three development projects and four advanced exploration sites, all in Mexico, said Russ Mould, AJ Bell Investment Director, and Danni Hewson, AJ Bell Financial Analyst.

“The silver price is up 6% over the past month, as some investors seek out haven assets and a place to hide in the wake of that Russian invasion of Ukraine, so this makes the timing of the latest full-year results from Fresnillo particularly interesting,” they added.

“However, silver is down 9% over the past 12 months, to around $24.25 an ounce, so last year’s attempt by the WallStreetBets community of Reddit does not seem to have been a big success. Moreover, Fresnillo shares are down by around 20% as the firm has continued to issue disappointing updates – it missed on production targets at this stage a year ago and in January the Mexican firm downgraded output goals for 2021 and 2022.”

  • – BRC UK retail sales monitor
  • – German industrial production
  • – US NFIB smaller companies survey
  • – In Asia, quarterly results from Chinese electric vehicle maker Nio

Wednesday 9 March

  • – Full-year results from Prudential, Legal & General, STV, Biffa and brickmaker Ibstock
  • – Chinese inflation figures
  • – US Job Openings and Labor Turnover Survey (JOLTS)
  • – US oil inventories data
  • – In Europe, quarterly results from Adidas, Continental and Vivendi
  • – In the US, quarterly results from Jack Daniel’s distiller Brown-Forman, Campbell Soup and gold miner Franco-Nevada

Thursday 10 March

  • – Full-year results from Spirax-Sarco Engineering, Spirent, Savills, Balfour Beatty and Hill & Smith
  • – Trading statement from DS Smith
  • – Japanese producer price inflation
  • – Interest rate decision from the European Central Bank
  • – US weekly jobless claims
  • – In Asia, monthly sales figures from silicon chipmaker TSMC
  • – In Europe, quarterly results from container shipping giant Hapag-Lloyd and MAN
  • – In the US, quarterly results from Rivian Automotive

Friday 11 March

  • – UK GDP figures

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “The UK economy is expected to have shown signs of a bounce back from the Omicron effect when the latest growth numbers are released, but there are concerns that the conflict in Ukraine could weigh on the economy going forward.

“Data from the closely watched HIS Markit/CIPS Purchasing Managers Index showed that manufacturing grew at the fastest pace in seven months in February as supply chain delays and raw material blockages eased.  But there are now worries that the conflict could reignite supply issues, and the rocketing price of oil and gas could exacerbate the cost-of-living crisis.

“The spectre of stagflation is once again looming, with inflation staying high, but growth stagnating as countries assess the implications of a drawn-out conflict. These latest numbers will shine a light on just how robust the UK economy is to survive a fresh period of uncertainty and price pressures. At the moment the indications are that the invasion and sanction repercussions are more likely to add to inflationary pressures by more than it reduces growth, so the Bank of England is still expected to raise rates at the next policy meeting.”

  • – UK manufacturing, industrial and construction output
  • – In the UK, trading update from Berkeley Group

AJ Bell’s Mould and Hewson said: “Berkeley’s shares stand some 12% lower than they did a year ago, despite management’s ambitious plans for housing completions, profits, and cash returns to investors by 2025, let alone the company’s lofty operating margins and net cash balance sheet.

This may be down to investor concerns over:

  • * The direction of the UK housing market, as interest rates finally start to rise
  • * The impact upon Berkeley’s profit margins its drive to be carbon neutral by 2020, plus the availability (and rising cost of) materials and qualified staff
  • * What the lasting impact of Covid-19 may be, if any, upon demand for metropolitan dwellings, given the company’s historic focus on London and the South East of England, through brands such as Berkeley, St George, St Edward and St William.

“In terms of profit, Berkeley raised its guidance alongside December’s first-half results for the year to April by 5%. Mr Perrins also then targeted 5% growth in pre-tax profit a year through to fiscal 2024-2025, to imply annual pre-tax profit then of some £625m,” Hewson and Mould added.

“In the six months to October 2021, the first half of the current fiscal year to April 2022, Berkeley made a pre-tax profit of £291m compared to £231m a year before. For the whole of this year, analysts have pencilled in £544m against £518m.”

They added: “Berkeley also intends to return £282m to shareholders each and every year through to September 2025, via a mix of dividends and share buybacks. That equates to 252p a share.

“On top of that, Berkeley revived a plan to return additional cash to shareholders to supplement its planned regular returns. Out of a £455m surplus cash position – to use management’s description – Berkeley returned £228m via a B share scheme. Add that to the regular returns and the first-half dividend paid in September was 371p a share.”

  • – In Asia, quarterly results from AIA
  • – In Europe quarterly results from EssilorLuxottica

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