Tui Travel

TUI Travel, the result of a merger between First Choice and the German firm TUI in 2007, is one of Europe’s leading tour operators. The company has now climbed out of a loss-making period and profits of £328 million are expected with December’s annual bulletin. The current year is forecast to achieve profits of £366 million. Throughout the loss-making period the dividend record has been progressive and the prospective yield on the shares at 149.3p is an impressive 8.1 per cent.

If the market appears over-cautious in its valuation of TUI that is understandable. Fierce competition persists, consumers across Europe are on the defensive and travel operators have had particular problems with high fuel prices and unrest in North African destinations such as Egypt and Tunisia. But a recent trading statement indicated management had a grip on these problems. The shares have virtually halved since the early summer and may be due for a bounce back.

Our table below shows a reasonably bullish consensus analysts’ rating of 3.8. See below for an explanation of the ratings.

Victrex

Victrex shares have lost nearly a third of their value over a year. The shares were doing well until the market shake-out began at the end of July. A hi-tech supplier of polymers to the auto, aerospace oil and gas and electronics sectors, the shares were highly rated until fears of recession began to stalk the market.

Thus far profits progress has been good and returns of £93.8 million are expected next month compared with £75 million last time. A touch over £100 million is pencilled in for the current year and the prospective yield on the shares is now over 3 per cent. Rating 3.0.

Brewin Dolphin

Stockbroker Brewin Dolphin’s shares were changing hands at 142.5p last year. They subsequently moved up to a peak of 185.4p in the early summer. Not surprisingly the current market malaise has done for their performance and they recently slithered to a low of 113p.

Profits progress is still on the cards, with returns of £42.3 million (£31.4 million in 2010) expected next month. In the current year £50.1 million is forecast, implying a forward yield on the shares of 6.3 per cent. Rating 2.8.

Southern Cross

The troubles of care-home provider Southern Cross has spread contagion to other quoted companies in the sector. Aim-listed CareTech Holdings has certainly not been immune and the shares – 465p a couple of years ago and 328p when they were featured in Share Watch a year ago – have lately slumped to only 118.75p.

This dire performance is at odds with results which have delivered consistent growth in earnings, dividends and profits over the past five years. Acquisitions in this fragmented market have offset the pressures on local authority budgets.

Profits were £3.3 million in 2006 and hit £7.56 million in 2010. For the year just ended a figure of £15.82 million is forecast. But the market is treating the shares with kid gloves. At this level they sell on under 5 times prospective earnings and yield 4.52 per cent. Rating 4.0.

Spotlight on RWS Securities

Brode, executive chairman of RWS Securities, can count himself fortunate indeed in running a niche global business in patent and technical translations where demand seems very healthy despite the anaemic growth climate.

Half-year results showed profits 21 per cent higher coupled with a 16 per cent dividend booster. The Chinese business had really taken off and Germany had experienced a turn round. Williams de Broë forecast results ‘at least at the top end of current market expectations’.

The shares are not far off their 479p peak for this year and have lately been bucking the market trend. Full-year figures next month should show profits up from £13.7 million to £16 million while there are hopes of a further profits rise to £17.2 million this year.

The shares are not cheap, selling on nearly 16 times forward earnings. Two brokers at least believe the shares can continue to defy gravity. Rating 2.

Expectation for companies announcing annual results in December

Notes: 37 companies are due to announce annual results in December. We show expectations for those with a market capitalisation of more than £10 million as at 1 October 2011. Historic and expected earnings per share are reported on a normalised basis, where EPS = profit after tax – minority interests – preference dividends + non-trading losses – exceptional charges – non-trading profits. Expected EPS is a consensus calculated from a range of broker forecasts. Each forecast is date-weighted over 180 days, giving maximum emphasis to the most recent forecast and reducing progressively to zero emphasis for a six-month-old forecast. Source: Hemscott

Analyst rating: A ranking of 1 indicates a strong buy and 9 indicates a strong sell. A 0 ranking means analysts have not expressed a view or the rating is under review.