Barclays (LSE: BARC) (NYSE: BCS.US) is the first of the UK’s big five banks to report this season. The company is set to announce its half-year results on Tuesday this coming week (30 July).
At the time of writing, Barclays shares are trading at 324p – up 9% from six months ago, slightly ahead of the 7% rise of the FTSE 100.
How will Barclays business have performed in the first half compared with last year’s first half? And will the company be on track to meet analyst consensus forecasts for this year’s key full-year numbers? Here’s your cut-out-and-check results table!
| H1 2012 | FY 2012 | H1 2013 | Forecast FY 2013 |
Forecast FY growth |
|
|---|---|---|---|---|---|
| Adjusted total income net of insurance claims (£bn) | 15.48 | 29.04 | ? | 29.24 | +0.7% |
| Impairment charges | 1.83 | 3.60 | ? | 3.45 | -4.2% |
| Net operating income | 13.64 | 25.45 | ? | 25.79 | +1.3% |
| Adjusted profit before tax (£bn) | 4.23 | 7.05 | ? | 6.67 | -5.4% |
| Adjusted basic earnings per share (EPS) | 21.8p | 34.5p | ? | 35.8p | +3.8% |
| Dividend per share | 2.0p | 6.5p | ? | 7.3p | +12.3% |
Income and impairments
City analysts expect adjusted total income net of insurance claims for the full year to be a modest 0.7% higher than for 2012. Last year’s half-year number came in at £15.48bn, followed by a weaker second half of £13.56bn. For Q1 this year Barclays reported £7.73bn. A repeat of that in Q2 would give a first-half number a shade below last year’s first half — but would leave the company on track to meet full-year forecasts, if making a little second-half improvement on last year.
Impairment charges have been falling steadily, and analysts see further progress this year: namely, a decline to £3.45bn from 2012’s £3.6bn. The improving impairments picture has led the experts to pencil in full-year net operating income of £25.79bn — up 1.3% compared with the 0.7% rise in total income. The half-year comparative for impairment charges is £1.83bn, so shareholders should be looking for a lower number than that within next week’s results.
Profit before tax and EPS
One of the unfortunate quirks of analyst consensus figures arises from the fact that they are line-by-line averages. For various reasons, the consensus number of one line can be at odds with that of another. The 2013 forecasts within the table above for Barclays profit before tax (down 5.4%) and EPS (up 3.8%) appear to be a case in point. I would expect these numbers to be more in sync, and I can see no reason for the discrepancy other than a quirk in the compilation of the consensus.
Look out next week, then, for whether the first-half profit before tax and EPS are closer to the forecast 5.4% decline for the former, or 3.8% rise for the latter … or somewhere in between!
Dividend
With the dividend we’re on much firmer ground. Since switching to paying quarterly dividends a few years ago, Barclays has been following a set pattern of payments as the table below shows.
| Year end | Q1 | Q2 | Q3 | Q4 | Total |
|---|---|---|---|---|---|
| 2012 | 1p | 1p | 1p | 3.5p | 6.5p |
| 2011 | 1p | 1p | 1p | 3p | 6p |
| 2010 | 1p | 1p | 1p | 2.5p | 5.5p |
The board has already paid a 1p dividend for Q1 this year. If the pattern continues, shareholders can expect to see the board declare another 1p payout for Q2. Analyst forecasts of 7.3p for the full year imply three 1p dividends followed by a 4.3p dividend for Q4. In the unlikely event that Barclays increased the Q2 dividend to more than 1p next week, it would be a huge — positive — surprise to the market.
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> G A Chester does not own shares mentioned in this article.
