Investors to chew over Domino's Pizza update as they await start of the first FOMC meeting of 2018

By Jon Hopkins / January 29, 2018 / www.proactiveinvestors.co.uk / Article Link

Just to make us all feel hungry, Domino's Pizza Group PLC (LON:DOM) will deliver its latest trading news on Tuesday, with further progress expected after its third quarter update back in October showed solid like-for-like sale growth.

That was on weak comparatives, however, and question marks remain over the group's margins and long-term sales growth trends.

With competition rising - from the likes of Deliveroo, UBEREats, Just Eat - Domino's bosses have been keen to try and underline the pizza firm's value proposition, which means it is struggling to pass on food price increases.

Despite that, the FTSE 250 company did hint at a possible full year profits beat in that last update, so look out for whether the guidance of "at least" hitting market forecasts has been maintained this time around.

Less of a lather for PZ Cussons

Elsewhere, first half results from Imperial Leather soap to St Tropez tanning products group PZ Cussons PLC (LON:PZC) are likely to be dull reflecting lower profitability in Europe and Africa amid challenging trading conditions in these key markets.

Analysts at Numis Securities forecast a 10% fall in Cussons' half-year underlying earnings (EBITA) to ?37.6mmln, indicating that EBITA margins will be 120 basis points lower at 9.9%.

They expect the FTSE 250 listed firm to see overall sales rise by 0.7% to ?381mln, with good growth in Asia (+9.5% to ?118.2mln) helping to offset lower sales in Africa (-8.2% to ?124.6mln) and low growth in Europe (+2.5% to ?138mln).

No major surprises from ZPG

Numis analysts expect property portal ZPG Plc (LON:ZPG) to issue a reassuring and solid trading update, although they do not expect any major surprises this early in the year.

Back in late November, ZPG announced a solid set of full year results together with the acquisition of Dutch automated property valuations and statistical market analysis firm, Calcasa.

The analysts noted that ZPG's outlook comments at the time of the results confirmed that 2018 had started well across both divisions and that management remained comfortable with market expectations for 2018.

They added: "At face value we hope to see a revenue run rate of at least high single digit underlying growth confirmed in this statement."

The analysts also said they would look for any comment on the integration of Calcasa, particularly given it was a non-UK business.

Fedwatch

On the macro front, all eyes will on the first Federal Reserve policy meeting of 2018, which starts later on Tuesday, although it is expected be one of the more uneventful FOMC meetings in some time.

The likelihood of a hike on Wednesday evening is near zero, and the fact that there is no press conference or update to economic projections means only the statement will be in focus.

Commentators think there will be important tweaks that could make this statement much more hawkish than the December version, with the economic assessment to get a slight mark-up from an already robust characterisation.

The wild card is also that the Fed committee acknowledges some shift in the balance of risks following the recent US tax cuts as the economy is going from strength to strength.

Significant events expected on Tuesday January 30:

Trading updates: CYBG PLC (LON:CYBG), Domino's Pizza Group PLC (LON:DOM), ZPG PLC (LON:ZPG), Greencore PLC (LON:GNC),  Restore Plc (LON:RST), UDG Healthcare PLC (LON:UDG), Avocet Mining PLC (LON:AVM),

Interims: Filtronic PLC (LON:FTC), NWF Group plc (LON:NWF), PZ Cussons PLC (LON:PZC)

Finals: Oxford Biodynamics PLC (LON:ODB)

Economic data: UK consumer credit; UK mortgage approvals; EU preliminary Q4 GDP; US consumer confidence; US Case-Shiller house prices index; US FOMC meeting begins

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