The Week Ahead: AA, Babcock, Halma

There's plenty to get your teeth into in the days ahead as blue-chips and mid-caps reveal their numbers.

Monday 23 September

Trading Statements

Northgate, Gama Aviation, Destiny Pharma, Instem, Keystone Law, Microsaic Systems, Marechale Capital, Deltex Medical, Faron Pharmaceuticals, ASA International, Billington, PureCircle

AGM/EGM

NB Private Equity Partners, Sosandar 

Tuesday 24 September

Like Saga (LSE:SAGA), Halfords (LSE:HFD), Marks & Spencer (LSE:MKS) and BT Group (LSE:BT.A), AA (LSE:AA.) is one of those household names whose share price collapse reflects fading fortunes, often as a direct result of failing to adapt in a fiercely competitive marketplace.

AA has also suffered regulatory pressure, and its shares, once worth 430p or more in 2015, could be had for as little as 45p in July this year, a decline of 90%. Investors who sold short – a bet on the share price going down – will be quids in.

But brave investors clearly see light at the end of the tunnel, chasing the shares up to 70p briefly this week. Director share buying in the spring, followed by a reasonably optimistic trading update at the beginning of August, may have convinced some short sellers to buy back some shares. 

The decline in paid personal roadside memberships over the past six months reduced to about 0.5% versus 1.1% a year ago. It should be flat in the current financial year to 31 January 2020 before returning to growth next year. Underling cash profit (Trading EBITDA) should also be up at both the half-year and full-year stage. Expect strong free cash flow too.

To give more investors greater confidence in the future, AA still has plenty of work to do, and it must provide evidence it is successfully repairing its finances. There will be plenty of nerves on results day for sure.

Source: TradingView Past performance is not a guide to future performance

Trading Statements

Alliance Pharma, RockRose Energy, Card Factory, Moss Bros, Tremor International, Barr (A G), Serica Energy, AA, Digitalbox, Blancco Technology, M&C Saatchi, Elecosoft, Versarien, Town Centre Securities, Seeing Machines, InnovaDerma, Diurnal, Blancco Technology, Close Brothers

AGM/EGM

Kibo Energy, Park Group, Versarien 

Wednesday 25 September

Babcock (LSE:BAB) is not necessarily a household name, but it is one of the country's largest defence contractors, responsible for training troops and building ships, recently winning the contract to deliver five Type 31 frigates to the Royal Navy. 

The shares have also enjoyed a strong run into this half-year trading update. After a five-year decline in price, dropping from 1,300p to a low of around 410p in May, there has been a modest reverse back up to the 560p region in recent days. 

Annual results published at the end of May were poorly received amid weaker profits and disappointing outlook. However, confirmation that Babcock had rejected an all-share bid approach from support services firm Serco in January did generate short-lived interest in June. 

Life is tough for Babcock, and this update will likely determine how the shares perform in the run up to the interim results on 20 November. Signs of improvement should be well-received given the shares still trade on less than 8 times earnings forecasts and yield 5%. Another one which really could go either way when the market opens on the 25th!

Source: TradingView Past performance is not a guide to future performance

Trading Statements

PZ Cussons, United Utilities, Halma, Babcock International, XLMedia, Mission Marketing, WANdisco, Ergomed, Mi-Pay, PRS REIT, Allergy Therapeutics

AGM/EGM

AdEPT Telecom, Orient Telecoms, Sophos, PZ Cussons, Joules, Tavistock Investments, Shearwater, Carclo, IMImobile

Thursday 26 September

Stocks that begin trading without rights to the latest dividend include Morrisons, Renishaw, IG Group, Hargreaves Lansdown and Bovis Homes

Trading statements

Mitchells & Butlers, SSP, MITIE, Allied Minds, Ebiquity, Eve Sleep, Pelatro, Northbridge Industrial Services, Crawshaw

AGM/EGM

Real Good Food, Kainos, Kromek, Argo Group 

Friday 27 September

Trading statements

Pennon, ADES International, CVS Group, Byotrol 

AGM/EGM

Blockchain Worldwide, San Leon Energy, Bermele