The week ahead: Next, AA

21st September 2018 15:12

by Lee Wild from interactive investor

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There'll be updates from the utilities sector in the coming days, but much of the focus will be on high street bellwether Next and breakdown struggler AA, writes Lee Wild.

Monday 24 September

Trading Statements

Pennon Group, MaxCyte, Deltex Medical, Instem, River and Mercantile, Trinity Exploration & Production, XLMediaAGM/EGM

Mortice

Tuesday 25 September

Next

After a disastrous 2016, Next shares had risen by two-thirds in the year to July. An update seven weeks ago pulled the rug away and now, trading at four-month lows, the shares look much better value.

Admitting that a 2.8% increase in second-quarter sales was flattered by the warm weather and did not warrant full-year upgrades was a catalyst for sellers. We already have the half-year sales data, so what’s important this time is any indication as to how much business was pulled from the third quarter to the second.

There's no obvious end in sight to problems for high street retailers like Next. What is crucial here is that growth in online sales continues to offset an ongoing decline at the retail chain. Even there, problems at rivals like House of Fraser and Debenhams could deliver a bonus for Next.

Next shares are always volatile on results day. A big move either way would not be surprising.

Trading Statements

SSE, Thomas Cook, United Utilities, Mi-Pay Group, Next, Osirium Technologies, Keystone Law Group, Card Factory, Altitude Group, Scancell

AGM/EGM

WYG, Versarien

Wednesday 26 September

AA

Short-term traders will have had opportunities to make money from AA shares over the past three years, but the overall trend has been very much downward. These half-year results should confirm that AA is on track to make a cash profit of £335-£345 million in the current financial year.

New chief executive Simon Breakwell will be given time to make his recovery plan work, but shareholders will want to see progress. Rivals have been eating into AA's breakdown business, so watch out for news on crucial investment there to stop the rot. Maintaining growth in motor policies is also critical, and AA will need to keep its promise of further growth this year and next if it's to generate big enough increases in profit and cash flow to trigger a rethink on the vastly reduced dividend further down the line.

Trading Statements

SSP Group, PZ Cussons, MITIE Group, Pelatro, Minds + Machines, Futura Medical, Centralnic, AA, Corero Network Security, Amryt Pharma, Destiny Pharma, James Halstead, Accrol Group, Allergy Therapeutics

AGM/EGM

Argo Group, Scholium Group, Tavistock Investments, Imimobile, Nakama Group, Griffin Mining, Gateley, Hornby

Thursday 27 September

Trading Statements

CMC Markets, RPC Group, Air Partner, 888 Holdings, Circassia Pharmaceuticals, Maistro, Biopharma Credit, Midatech Pharma, Clinigen, Bluefield Solar Income Fund

AGM/EGM

WH Ireland, Zamano, Zoo Digital, Mayan Energy, Arcontech Group, Sure Ventures

Friday 28 September

Trading Statements

TLA Worldwide

AGM/EGM

7digital Group, San Leon Energy, Fragrant Prosperity Holdings

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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