Tuesday preview: Pru, Standard Life, G4S

12th Mar 2012 15:48

Two insurance giants take to the stage on Tuesday to publish full year results: Prudential and Standard Life.Prudential's recent results have tended to beat expectations, giving rise to share price strength following the release, notes Credit Suisse.The Swiss bank is forecasting pre-tax operating profit of £1.98bn for the Pru, with continued strong growth in Asia and on the asset management side of the business, which will contrast with subdued growth in the UK.Credit Suisse is expecting a final dividend of 17.33p per share, which would make the full year pay-out 25.28p, an increase of 5% on 2010. The market consensus forecast for the full year dividend is 25.18p.Japanese broker Nomura Securities reckons that, "following 2.5 years of strong growth in the US, we expect a slowdown in US sales to restrict total group NBV [net book value] growth to 5% in 2011 and to single digit levels in 2012 and 2013."Nomura thinks Pru's US business is likely to plateau, because of: "1) the company's stated intention to moderate its US growth since it was becoming too large a part of the group; and 2) its demanding comparatives in the US over the past three years, when it tripled its market share."As for Standard Life, the life assurance leviathan is expected by Credit Suisse to unveil an operating profit before tax (on an international financial reporting standards - IFRS) basis of £483m, which the Swiss broker says is 2.1% above market consensus."Improved results from Canada, International and Asset Management are expected to more than offset weaker earnings from the UK (mainly due to a one-off in FY10). We forecast dividend growth of 6% YoY [year-on-year], implying a final DPS [dividend per share] of 9.17p and FY11 DPS of 13.78p," Credit Suisse analyst Chris Esson said. Charles Stanley's Nic Clarke is a little more pessimistic on the dividend front, and is predicting a full year pay-out of 13.7p. In the view of Credit Suisse's Chris Esson, the focal point of the result will be on what he calls the building blocks of growth. "Key in this regard is AuA [assets under administration] progression, which we expect to show a mixed picture in 4Q11 [fourth quarter 2011] with continuation of subdued net flows more than offset by market value gains (equity market rally and fall in bond yields). We forecast closing group AuA of £199bn, +4% QoQ [quarter on quarter] though only +1% YoY," Esson predicted. Away from the insurance sector, security firm G4S is tipped by Charles Stanley to announce profit before tax of £440m for 2011. The broker thinks earnings per share will nudge up to 22.9p from 21.6p in 2010, while the divi could be hiked to 8.5p from 7.9p."For 2011, we expect G4S to have delivered organic revenue growth of 5%, with 3% in developed markets and 9% in new markets. G4S has two operating divisions: Cash solutions and Secure solutions. In secure solutions, organic growth was 5% and in cash solutions organic growth was 2%. The trends are consistent with the first half performance with continued strong performance in new markets and stable growth in developed markets. By 2019, Developing Markets are targeted to produce 50% of group revenues compared to the current rate of 25%," notes Charles Stanley analyst Tony Shepard. On the economic front, eyes will be cast across the Atlantic to see if the US Federal Reserve's policy-making committee, the Federal Open market Committee (FOMC), announces any major changes to policy. The market is not expecting any, so the focus is likely to be on the FOMC's assessment of the US economy.INTERIMSBrooks Macdonald Group, RegenersisINTERNATIONAL ECONOMIC ANNOUNCEMENTSBusiness Inventories (US) (13:30)FOMC Interest Rate (US) (17:15)Manufacturing Inventories (US) (15:00)Retail Sales (US) (13:45)Retail Sales Inventories (US) (15:15)ZEW Survey (EU) (10:00)ZEW Survey (GER) (10:00)FINALSAntofagasta, Cello Group, Computacenter, Futura Medical, G4S, HaloSource Inc. (Reg S), Inchcape, KBC Advanced Technologies, Law Debenture Corp., Prudential, Standard LifeAGMSBlackRock Commodities Income Inv Trust, Downing Income Vct 4, Interbulk GroupUK ECONOMIC ANNOUNCEMENTSUK Trade (00:00)FINAL DIVIDEND PAYMENT DATECatco Reinsurance Opps. Fd (DI), Catco Reinsurance Opps. Fd (DI) C SHS