The Week Ahead: Lloyds Bank, Centrica, BT, Shell, BP

Investors are swamped with results both here and in the US, although banks will grab the headlines.

Next week, results reporting season moves into top gear on both sides of the pond, with a raft of company earnings for investors to consider. 

But highlight of the week in the US is the Federal Reserve meeting on 30th and 31st July, where an interest rate cut is widely expected to be announced – the only bone of contention is whether the Fed will decide on a 0.25% or 0.5% cut in an effort to both stave off the possibility of a 2020 recession – US presidential election year - as well as providing some late-cycle stimulus to corporate America.

So far in the US, the news from corporates has been mixed to positive and there are some big names updating next week – we shall see whether they will continue to contribute to the mood music. Amongst those providing updates are the likes of Apple (NASDAQ:AAPL), Pfizer (NYSE:PFE), Spotify (NYSE:SPOT), Verizon Communications (NYSE:VZ), Berkshire Hathaway (NYSE:BRK.B), Exxon Mobil (NYSE:XOM), Chevron (NYSE:CVX) and General Electric (NYSE:GE).

In the UK, the pace is also at breakneck speed, with updates from Hammerson (LSE:HMSO), Centrica (LSE:CNA), Taylor Wimpey (LSE:TW.), Direct Line (LSE:DLG), British American Tobacco (LSE:BATS) and BT (LSE:BT.A).

There are some particular pockets of interest, though.

Most of the banks are reporting half-year numbers next week and they will have separate and collective challenges to report. The usual focus will be on the key metrics which define bank numbers, such as the cost/income ratio, the return on capital employed, the capital cushion, and the Net Interest Margin – the latter of which will remain under pressure given the historically low interest rate environment. 

Regulatory and special provisions (PPI is at last approaching its deadline date, at the end of August) will hopefully be less of an issue and the generally robust figures seen so far from other global banks may provide something of a clue. 

Going into the numbers, investors are generally optimistic, with the market consensus of Lloyds Banking Group (LSE:LLOY), Royal Bank of Scotland Group (LSE:RBS) and Barclays (LSE:BARC) all currently standing at a 'buy', and Standard Chartered (LSE:STAN) a 'hold'.

• Lloyds Banking and UK bank sector results preview
• Who joins Lloyds Bank on this list of cheap UK shares to buy?

Centrica is widely expected to slash its dividend when the British Gas-owner publishes half-year results Tuesday. Chief executive Iain Conn has already cut the payout once, back in 2015, and it seems the 12p per share annual return will suffer the same fate. 

A drop in Centrica's share price ahead of these results, raising the prospective yield to almost 14%, suggests the writing is on the wall. And it should wield the axe given a range of issues hampering profitability. Even if it halves the payout, the shares would still yield almost 7%!

• How Centrica could shock us all

Elsewhere, a volatile oil price over the last quarter – not least because of geopolitical concerns around Iran – may well have had an effect on two of the UK oil majors, who are both beginning to benefit from asset disposal programmes, keen efficiencies and prodigious cash generation which has enabled large buyback programmes in addition to the punchy dividend yields. 

These companies are also market favourites at present, with the general view of BP (LSE:BP.) being a 'buy' and Royal Dutch Shell (LSE:RDSB) a 'strong buy'.

Finally, British Airways parent International Consolidated Airlines (LSE:IAG) will also update with half-year results, following an update in May which was marred by higher fuel and employee costs, lower earnings per share and pressure on cashflow. The crucial summer trading period should also feature, and will be considered in comparison to the outlook for the rest of the year. 

For the moment, the stock is being given the benefit of the doubt with the market consensus standing at a 'buy', even though the share price performance of late has hardly been cause for celebration, having dipped 30% in the last six months.

Monday 29 July

Trading Statements

Cranswick, Gama Aviation, Hammerson, Keller, GlobalData

AGM/EGM

Active Energy, China New Energy

Tuesday 30 July

Trading Statements

Games Workshop, Provident Financial, Spectris, Jupiter Fund Management, Low & Bonar, LSL Property Services, Elementis, Greggs, Aggreko, Centrica, Hutchison China Meditech, BP

AGM/EGM

EPE Special Opportunities, 1Spatial, All Asia Asset Capital, Reabold Resources

Wednesday 31 July

Trading Statements

Next, DWF Group, Hargreaves Services, Angle, Serco, Jelf Group, Just Eat, International Personal Finance, Mitchells & Butlers, Smurfit Kappa, Smith & Nephew, Rentokil Initial, Restore, StatPro, Indivior, St James's Place, Lloyds Banking Group, Intu Properties, Dignity, Direct Line Insurance, Taylor Wimpey, BAE Systems, Man Group, Countrywide, 4imprint

AGM/EGM

Griffin Mining, Gabelli Value Plus Trust, Dragon-Ukrainian Properties & Development, System1 Group

Thursday 1 August

Trading statements

Renishaw, Schroders, Capita, ConvaTec, Rio Tinto, RSA Insurance, Cobham, Vivo Energy, Spirent Communications, Barclays, British American Tobacco, Royal Dutch Shell, Coats Group, Standard Chartered, London Stock Exchange Group, Eurocell, UK Commercial Property Trust, Dairy Farm International, Mandarin Oriental International, Clarke (T), Mondi, Intertek, Merlin Entertainments, FBD Holdings

AGM/EGM

Davictus, 7digital Group

Friday 2 August

Trading statements

Pets at Home, Jardine Matheson, Essentra, BT, International Consolidated Airlines, Jardine Strategic Holdings, Millennium & Copthorne Hotels, Royal Bank of Scotland

AGM/EGM

Etalon Group