Next week on the stock market

Direct Line’s story has been dominated by takeover talk in recent weeks. But a fairytale ending looks out of reach after Ageas confirmed a few weeks ago that it would not be making a firm offer. Direct Line had previously rejected a couple of proposed deals and Ageas couldn’t make the numbers work to put a more enticing number on the table.

And so, we get back to business. Full-year results painted a better picture than we’ve had for some time. But there’s a long way to go before this turnaround is complete. It’s no secret that Direct Line has struggled over the past few years to deal with a challenging motor insurance market. All eyes will be on whether profitable new business has continued over the first quarter, and when we can expect to see that translate into improved results.

BAE Systems has moved from strength to strength in recent years. The group manufactures military equipment like fighter jets, submarines and ammunition, and recent global events have increased demand for BAE’s products. That helped full-year sales and underlying operating profits both grow 9% last year, to £25.3bn and £2.7bn respectively.

That growth’s set to reach double-digit rates this year, including a helping hand from the recent acquisition of US-based Ball Aerospace. With an order backlog of £69.8bn back at year-end providing good revenue visibility, we see little reason that these targets can’t be met. The main thing that might rock the boat is if there’s been any major hiccups with the integration of Ball Aerospace. We’ll be keeping a close eye on this in next week’s trading update, hoping to gain some insight into whether everything’s moving along as planned.

The Canadian giant Shopify is a leading provider of essential internet infrastructure for commerce. While the platform is all but invisible to consumers, it helps provide millions of vendors globally with a customisable online shop with minimal expertise. Shopify powers 10% of all online shopping in the US, fuelling full-year revenue growth of 26% last year, up to $7.1bn.

Momentum is set to continue into the new financial year, with revenue expected to grow at a low-twenties percentage rate in the first quarter. Having increased prices, lowered costs and removed the financial burden of its unsuccessful logistics company, Shopify’s gross margins look set to improve by 1.5 percentage points since year-end. As well as looking under the hood at performance this quarter, we’ll be eager to hear how the outlook for the rest of the year is shaping up.

A contributing author holds shares in BAE Systems.