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Next Week In The Market

Video: Next Week in the Market 2nd - 6th Dec 2013

Next week's reporting highlights include Sage, Standard Chartered and Tesco

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Douglas McNeill

in Next Week In The Market


Next week’s reporting highlights include: 

• Sage – is the pace of growth quickening?
• Standard Chartered – will the recently-reduced profit growth target hold?
• Tesco – any sign of light at the end of the tunnel?



Sage, the business management software company based in Newcastle, announces its results for the year to 30 September. The company last updated the market with a trading update in July, when it said that trading remained in line with expectations. Conditions varied across markets. The share price moved up almost 2%, but has since fallen by about 3%. Market expectations are for an increase of around 10% in dividends this year, against the background of relatively flat sales, a slightly higher margin and a higher (but still small) interest charge. Attention next week will focus on whether the company is making progress in raising its organic growth rate, as well as any improvement in mainland Europe. The share price level suggests that investors appreciate the stability of much of Sage’s business and are generally supportive of management, although there are concerns that it may be behind in its cloud strategy.

End-of-year trading update from Standard Chartered, the Asian-focused bank.  In its recent trading update, the company highlighted that in the first nine months of the year its operating profit had grown at a low single digit rate with the third quarter weighed down by depreciation in emerging market currencies and market volatility.   Hong Kong and Africa have continued to grow income and profit at double-digit rates, offset by weaker performances in Korea and Singapore. Impairment has increased in the Consumer Bank but remain limited in the Wholesale Bank and Group costs remain well controlled. The share price rose 1pc on the statement but has fallen by around 7pc since.  Market expectations are for dividend growth of around 6pc this year supported by a strong capital position. Attention next week will be on the outlook for revenues in both the Wholesale and Consumer Bank in what is a very difficult environment. The share price has been volatile in recent months.

Trading update from Tesco, the world’s third-largest retailer, covering September-November, the third quarter of its financial year.  The company last updated the market on 2 October, when it reported a weak set of interim results.  The share price fell by 3% on the statement, although losses have been made up since.  Market expectations are for a frozen dividend this year, predicated on subdued sales growth, a broadly flat operating margin and slightly lower interest charge.  Attention next week will focus on the like-for-like sales performance in the UK, central & eastern Europe and Asia; the share price level suggests that investors expect trading conditions to remain tough over the medium term.

Next Week in the Market is produced by Charles Stanley's Private Client Research Team and the video is presented by Douglas McNeill, Investment Director who can be followed on Twitter on @DAMcNeill

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