Companies Reporting: Legal & General, Admiral, Balfour Beatty

Our regular look at the FTSE 350 and a selection of other companies reporting from 14 – 18 August.

• Legal & General looks to capitalise on the higher rate environment
• Can Admiral offset claims inflation with higher prices?
• Can Balfour Beatty build on last year’s foundations?

Legal & General, Half Year Results, Tuesday 15 August

Matt Britzman, equity analyst, Hargreaves Lansdown: “Legal & General LON:LGEN is going to be one of the insurers most affected by the new accounting rules that’ll be in play next week. Management have been clear that the cash generated by the business will remain unchanged, as will the strategy and business priorities. The key difference is that profits from the insurance business are stored in the balance sheet and released over time, causing a hit to reported profits in the short term compared to the old regime.

The dividend is intended to grow at 5% per annum until 2024 although, of course, no shareholder returns are guaranteed. This was bought in to try and give investors some sense of stability while markets get to grips with the new accounting standards. Investors are supportive of the move – uncertainty is rarely well received.

Back to day-to-day operations, the jump in interest rates is having a positive impact on the retail annuity business and the pipeline for pensions risk transfers in 2023 is the best its seen. Hopefully that should make for some positive reading next week.”

• Three Quick Facts: Balfour Beatty, National Grid, Vodafone
• Three Quick Facts: ITM Power, TMT Investments, Admiral
• Three Quick Facts: Balfour Beatty, Aviva, Amaroq Minerals

Admiral Group, Half Year Results, Wednesday 16 August

Matt Britzman, equity analyst, Hargreaves Lansdown: “It’s safe to say markets were unimpressed by Admiral’s LON:ADM full-year results back in March. Profits missed analyst expectations as higher claims and an increase in the cost of servicing them weighed on performance. But, broadly speaking, Admiral’s performance in this tricky environment has been strong to date compared to peers.

Analysts are expecting to see price hikes support the top line in next week’s half-year results, with markets expecting double-digit growth in gross written premiums. It’s a balancing act, though, as price is typically the key differentiator from a customer’s standpoint, and price actions fed through to a decline in motor customers last year. New accounting rules will be in play, so results could look a little different than previously.’’

Balfour Beatty, Half Year Results, Wednesday 16 August

Aarin Chiekrie, equity analyst, Hargreaves Lansdown: “Balfour Beatty LON:BBY gave an update back in May, with no major surprises packed into its trading update. In the first quarter, the group won several contracts, but the order book still declined from £17.4bn to £17.0bn. Average net cash balances were also down from £815m to £740m, with the group already halfway through its £150m share buyback programme by 12 May. With progress like this, you could wonder whether an extension to the buyback programme might be on the cards in the second half – but there are no guarantees.

Full-year profits from its construction and support services divisions are expected to be broadly in line with 2022 levels, where Balfour made an underlying operating profit of £174m. But that implies that very little of the government-led infrastructure boom, especially in the US, is making its way down to the bottom line. Investors will be hoping the group can provide a positive surprise on this front when it reports half-year results next week.”

This article has been brought to you in association with Hargreaves Lansdown. All opinions expressed in this article are from the analysts and do not necessarily represent the opinions of The Armchair Trader.

FTSE 100, FTSE 250 and selected other companies scheduled to report