Week Ahead

Crew to update after Diageo profits warning

Johnnie-Walker-Princes Street
Johnnie Walker owner Diageo will deliver half-year figures (pic: Terry Murden)

Some big corporate announcements this week from BT, Diageo, Shell, SSE and GlaxoSmithKline are due along with the Bank of England’s decision on interest rates.

Global drinks giant Diageo, best-known for its Johnnie Walker and Talisker scotch whiskies, Captain Morgan rum, Smirnoff vodka and Guinness, lost its chief executive, Ivan Menezes, last summer when he died just before his planned retirement.

The company brought forward the handover to his successor Debra Crew but had to endure a profit warning just a few months later.

It was blamed on weakness in Latin America, a slowdown in momentum in Europe and Asia (notably China) and unchanged growth rates in America in the second half of the calendar year of 2023 compared to the first. The only area to show an acceleration was America, in terms of organic growth rates.

It has seen Diageo’s shares fall by a quarter over the past year, and they are no higher now than they were in 2018.

“It is almost as if Covid, lockdowns, interest rate cuts and furlough schemes never happened,” said AJ Bell’s team of analysts ahead of Tuesday’s interims.

A small increase in the divident to around 81p a share is pencilled in for this financial year to June 2024.

The Bank of England is expected to leave the UK interest rate unchanged at 5.25% on Thursday, though sentiment keeps changing as the economic data springs the odd surprise about inflation and growth that upsets expectations and forecasts.

That said, stock and bond markets are convinced that momentum is changing and that central banks are poised to pivot toward cutting interest rates and away from hiking them, as inflation cools and economies suffer nothing worse than a soft landing.

The voting among the Bank’s nine-member Monetary Policy Committee was split six votes for no change and three for a quarter-point increase last time so it pays to be cautious over what to expect.

The US Federal Reserve also decides on interest rates and is expected to keep the headline Fed Funds rate unchanged at 5.25%

DIARY

Monday 29 January

  • First half results from Games Workshop

Tuesday 30 January

  • Half year figures from Diageo
  • Trading updates from SSP, Pets At Home and Saga
  • BRC UK shop price index
  • UK mortgage approvals

Wednesday 31 January

  • Full-year results from GSK
  • Trading update from SSE, ITM Power

Thursday 1 February

  • Full-year results from Shell
  • First-half results from Rank
  • Trading updates from BT, Glencore, 3i, Airtel Africa and AG Barr
  • UK interest rates decision from Bank of England
  • Purchasing managers’ indices for manufacturing from Japan, Asia, Europe, the UK and USA
  • EU inflation
  • OPEC meeting
  • US weekly initial unemployment claims

Friday 2 February

  • Trading update from YouGov
  • US non-farm payrolls, unemployment rate and wage growth
  • In the USA, quarterly results from ExxonMobil, AbbVie, Chevron, Bristol Meyers Squibb and AON


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