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BAT, Rio Tinto and Plus500 dominate Wednesday’s diary


The mid-point of the week will see the run of mining results continue with Rio Tinto, while investors will also be eyeing finals from tobacco giant BAT and stock trading platform Plus500.

Meanwhile, in the macro diary, there will be a focus on the UK’s latest batch of inflation data, while there will also be news from the other side of the Atlantic in the form of the latest minutes from the Federal Reserve.

BAT results to light up mid-week

Mid-week will see final results from British American Tobacco PLC (LON:BATS), following shortly behind good news for the cigarette maker after the UK’s Serious Fraud Office scrapped a corruption investigation into the company’s Africa business last month.

In terms of numbers, analysts at UBS expect BATS to report 3.6% organic growth for 2020 and predict 6.

7% growth for 2021, so investors will be looking to see if the company’s own guidance aligns with this.

Shareholders will also be looking for updates on the company’s new generation products (NGPs), which include vaping brands such as Vype and glo, the company’s flagship tobacco heating product, as it looks to target markets that are increasingly rejecting traditional combustible products such as cigarettes.

Rio Tinto reports results in first outing for new CEO

Rio Tinto is reporting the first set of finals under CEO Jakob Stausholm, the former CFO who took the helm at the start of the year following the resignation of Jean-Sebastian Jacques.

“Mr Stausholm has already shaken up the management team at the iron ore business, in Australia and at company board level, to re-establish the company’s environmental, social and governance credentials. Analysts and shareholders will no doubt look to him for any early pointers of group strategy, too, especially with regard to its reliance on iron ore, the troubled – and expensive – expansion of a huge copper project in Mongolia and also its carbon footprint (where offloading its coal assets is a huge step forward)”, said AJ Bell’s Russ Mould.

The City is looking for EBTIDA of US$23.6bn for 2020, rising to US$26.6bn for 2021, with a net debt expected to come down to just US$1.7bn from nearly US$20 billion a decade ago.

Rio is forecast to shell out a full-year dividend of US$4.80 a share for 2020, up from US$4.43 a year earlier, with an increase to $5.94 expected in a year’s time.

Plus500 has finals in stock

Plus500 Ltd (LON:PLUS) is dropping its finals mid-week to wrap up what has been an exceptional year.

The online trading platform benefited from people cooped up at home turning their attention to investing.

There was a slight negative in the fourth quarter given customer trading gains, which led to guidance of underlying earnings (EBITDA) of US$515mln being slightly lower than previously expected, analysts at Peel Hunt said.

“Whilst the stock will remain inherently volatile, there is little in the current price for the continuation of elevated trading activity,” the broker said.

The market will focus on whether the strong growth in active customers in the financial year 2020 will support momentum going into the current year.

Current consensus for 2021 expects revenues to halve, which could be conservative given the current period of volatility which is stimulating trading activity.

Significant announcements for Wednesday February 17:

Finals: British American Tobacco PLC (LON:BATS), Plus500 Ltd (LON:PLUS), Rio Tinto PLC (LON:RIO), Burford Capital Limited (LON:BUR)

Interims: Transense Technologies PLC (LON:TRT)

Economic data: UK inflation, US retail sales, US Fed minutes

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