Interactive Investor

The week ahead: General election, Fuller Smith & Turner, WYG

2nd June 2017 17:17

David Brenchley from interactive investor

The coming seven days will be dominated by general election speculation before the result is revealed Friday, but a few companies also report to the market.

Monday 5 June

AGM/EGM

TBC Bank Group, RedstoneConnect, Frontera Resources Corporation, Africa Opportunity Fund

Tuesday 6 June

Management consulting group WYG reports full-year results Tuesday to give the week a shot in the arm.

The firm announced Friday that it had been awarded "two major new framework contracts with UK government agencies and a significant new contract in Africa". The news saw the stock shoot up 14% on the day at one point to 111p before settling back to a shade above £1.

That almost makes up for ground the share lost late March when a trading update revised operating profit expectations down to £9 million. "Although revenue during the fourth quarter is expected to be higher than in the same period last year, a combination of programme deferrals on existing contracts and some delays in the confirmation of new contracts has led to weaker-than-anticipated profit performance," the firm warned at the time.

In a note to clients Friday, broker WH Ireland said the contract announcement "reflect strong wins with major UK clients and additionally further progress overseas, suggesting that it is making some positive progress on both sides of the business".

The contracts are expected to be worth as much as £50 million, says analyst Nick Spoliar. Spoliar keeps his 142.5p target price, suggesting 42% upside, and 'buy' recommendation on the stock and views Friday's announcement as "encouraging", "set as ever against a shifting backdrop".

The analyst expects adjusted pre-tax profits of £8.65 million to be announced Tuesday and a slightly higher dividend at 1.7p per share – a yield of 1.7%.

Trading Statements

Oxford Metrics, Gooch & Housego, Acal, GB Group, WYG, Carclo, FreeAgent Holdings, B.P. Marsh & Partners, AO World, Joules Group, International Consolidated Airlines

AGM/EGM

MediLink-Global UK, Gem Diamonds, Realm Therapeutics, London & Associated Properties, Fair Oaks Income Fund, Vietnam Enterprise Investments, Bagir Group, Forbidden Technologies, Somero Enterprises

Wednesday 7 June

Trading Statements

Ramsdens Holdings, LSE:RPC:RPC Group, Tricorn Group, Workspace Group, Picton Property Income, Grafenia, Biotech Growth

AGM/EGM

Secure Income Reit, WPP Group, Standard Life Investment Property Inc Trust, Jackpotjoy, Audioboom, Bisichi Mining, Davictus, Hurricane Energy

Thursday 8 June

The UK heads to the polling stations Thursday ahead of a 'snap' general election, called by incumbent prime minister Theresa May. We have already covered the investment implications the election could have and where you should be looking to put your money on 9 June.

May's Conservative party was comfortably ahead in all known polls at the time the election was called and it was expected they would easily secure a greater majority than they currently have. However, since their manifesto was launched, they have been losing ground to Jeremy Corbyn's Labour party and some polls now put them just three points ahead.

However, polling averages now indicate a conservative lead of 9%. This, according to Investec analysts, would imply a 42-seat Tory majority. However, last June's EU referendum showed taking polls at face value is a fool's errand.

"On election day itself, an exit poll released just after 10pm will give us the first clue of the result of the vote itself," the Investec analysts conclude.

Trading statements

CMC Markets, FlyBe, First Property Group, Auto Trader Group, LSE:VLX:Volex Group

AGM/EGM

Panmure Gordon & Co

Friday 9 June

With a "strong set of results" expected to be delivered, Fuller Smith & Turner will hope its prelims will not be overshadowed by the outcome of the general election.

With the Conservatives still expected to win, there shouldn't be much news to come out of the vote, though, and the market can concentrate fully on Fuller's numbers.

According to Peel Hunt's Douglas Jack, the brewer and pub chain owner should continue its track record for setting and exceeding deliverable objectives.

Jack's target price of 1,200p suggests 11% upside, with the firm trading on a price/earnings ratio of 18.2 times. "Our forecasts assume a slowdown in expansion (caused by a pause at Stable Pizza), even though the company has the balance sheet and the ambition to be more expansive," he explained.

AGM/EGM

Vertu Capital Limited, TomCo Energy, Baker Steel Resources Trust, Deltex Medical, Telefonica

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. 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.

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