Business this week: results, meetings and indicators
First-half results at IFG have been preceded by a profit warning issued in late July
Grafton Group CEO Gavin Slark: shareholders will be looking forward to the details of Grafton Group’s first-half performance this week following very positive indications. Photograph: Nick Bradshaw
Indicators: Irish retail sales (July); euro zone loan growth (July)
Indicators: Irish overseas travel (May-July); German consumer confidence (Sep); US consumer confidence (Aug)
Meetings: Pre-launch event for Responsible Innovation Summit 2017 ( Grand Canal Street Lower, Docklands, Dublin)
Results: IFG Group, Workday
Indicators: Irish unemployment (Aug); euro zone business confidence (Aug), services, economic and industrial sentiment (Aug), consumer confidence (Aug); UK house prices (Aug), consumer credit (July), mortgage lending and approvals (July); German inflation (Aug); US GDP growth (Q2)
First-half results at IFG on Wednesday have been preceded by a profit warning issued in late July. On foot of that news, shares in the financial services group initially slumped more than 7 per cent. The company said its profits would be materially lower than expected as a result of accelerated restructuring of its James Hay business, as well as legal costs.
IFG expects both James Hay and Saunderson House to deliver adjusted operating profits in line with market consensus this year and to replace lost interest income with more stable and predictable fee income. This would position them to deliver meaningful profit growth in 2018.
However, it said in July, and as previously disclosed, the group was facing legal and remediation costs in relation to legacy investments.
“We are engaged in ongoing discussions with HMRC [British revenue and customs] to clarify any potential sanction charges, but due to the complexity of the matter any financial exposure to the group, which is a function of any sanction charges offset by recoveries, is unlikely to be resolved by the time of the announcement of our interim results on the 30th August,” it reported.
It approved an acceleration of the restructuring plan at James Hay. The level of exceptional costs in 2017 is expected to “increase materially”, reducing group profits.
Indicators: Euro zone inflation (Aug), unemployment (July); UK consumer confidence (Aug); German retail sales (July), unemployment (Aug)
Meetings: British and Irish Trading Alliance networking evening (Westin Hotel, Dublin)
Shareholders will be looking forward to the details of Grafton Group’s first-half performance this week following very positive indications. Shares in the builders merchants and DIY outfit jumped early last month when a trading statement revealed better-than-expected H1 results on the back of UK performance and its Selco Builders Warehouse in particular.
Total like-for-like sales increased 5.9 per cent in the second quarter, up from 5.5 per cent for the previous three months, the Dublin-based group said, bringing the figure for the first half to 5.7 per cent.
Official results on Thursday could add meat to this already appetising story of strong business performance.
If anything might dampen the mood it will be chief executive Gavin Slark’s assertion that they “remain cautious about the shorter-term impact of current uncertainty and pressure on real incomes which may temper growth” in housing renovation and maintenance.
July’s results showed that while merchant sales growth expanded to 4.7 per cent from 4.4 per cent over two quarters in the UK, they fell back to 10.2 per cent from 14.6 per cent in Ireland.
Davy analysts said in a note to clients they planned to raise full-year earnings forecasts by as much as 3 per cent even though the group had not revealed interim earnings.
Indicators: Irish manufacturing PMI (Aug); euro zone manufacturing PMI (Aug); UK manufacturing PMI (Aug); US unemployment (Aug), manufacturing PMI (Aug), car sales (Aug)