“If all of consensus pre-tax profit forecasts for the FTSE 100's members are added together, the total comes to £197 billion for 2015, barely 3% higher than the £191 billion expected for last year,” says Russ Mould, AJ Bell Investment Director. “In May analysts were looking for £222 billion in pre-tax income and since then forecasts for the oil, mining and financials sectors have fallen by £10 billion, £6 billion and £2 billion respectively. Even after those cuts, this trio represent 56% of forecast sales, 59% of expected pre-tax profit and 52% of projected dividend payments for 2015. They need to thrive next year if the FTSE 100 is to challenge its former high and end its underperformance relative to other major markets, such as the USA.”
There are still 12 oil producers, oil equipment providers and miners in the FTSE 100 even if 11 companies from these sectors have dropped out if the index over the last three years.
Notes for Editors
- Aggregate consensus forecasts for 2015 have the FTSE 100's total revenues falling by 0.8% to £1.6 trillion, the third consecutive annual decline.
- Estimated total pre-tax profits of £197 billion for 2015 lag the record of £216 billion seen in 2011. Financials' contribution is expected to more than double to £52 billion over the same period, but miners' profits are seen dropping by £15 billion and oil firms' pre-tax income by £32 billion.
- The eleven commodity-related stocks to have dropped out of the FTSE 100 in the last three years are African Barrick Gold, Amec Foster Wheeler (Amec as it was then), Cairn Energy, ENCR, Essar Energy, Evraz, Kazakhmys, Petrofac, Polymetal, Vedanta Resources and Wood Group.