The week ahead (05/12 - 09/12/11)

The first full week of December appears to be getting into the Christmas period already, with the corporate calendar looking decidedly less frenzied than the past few weeks.

However, there are still enough chestnuts to get investors' juices flowing.

First up on Monday will be TUI Travel and given what's been happening at rival group Thomas Cook of late, the market will undoubtedly be poring over every detail of this statement.

Wyn Ellis, analyst at Numis, believes that luckily for TUI's shareholders it is unlikely to have suffered a similar deterioration in trading. However, the major point of interest is likely to be booking patterns in the UK since Thomas Cook's financial problems became apparent.

'Future headlines in the press are likely to be disconcerting for Thomas Cook's customers, which may encourage customers to book with other brands. TUI is, we believe, going to have its best summer ever in 2012. UK sales and margins are likely to benefit from the damage to Thomas Cook's reputation.

'In our opinion, TUI should be able to better yield-manage pricing and improve occupancies, load factors and the overall quality of its hotel inventory mix,' Ellis added.

Tuesday welcomes Wolseley into the mix with its first-quarter figures. The company should have benefited from further progress in its US operations, especially as last year's first-quarter figures will have to be restated to exclude disposals in the UK and France.

In fact, analysts believe that this particular stock may manage to rustle up a small increase in profits thanks to continued sales outperformance.

Northgate is due to report on the same day and is on track to unveil a decent improvement in both pre-tax profit and earnings per share (EPS) growth.

The firmer numbers are predicted on the back of management's focus on increased ROCE through hire rate improvements and increased operating efficiency.

Carillion springs to the fore 24 hours later and following on from its third-quarter statement at the start of October, is expected to put out a trading statement in line with expectations.

Support services should have notched up strong profit growth this year as a result of the Eaga acquisition.

Howard Seymour, analyst at Numis, said: 'Overall, we expect no change to estimates, and believe the shares to be cheap, but also believe that the group needs to tackle the issues relating to Eaga to demonstrate that the £300 million acquisition can still add value in the context of the wider support services operations before the shares can start to reflect this value.'

Also making an appearance midweek is Stagecoach with its first-half results.

A pre-close trading update for the half-year indicated 2.2 per cent like-for-like revenue growth in the UK bus division, 8.7 per cent in UK rail and 12 per cent in the US division. Overall, this marked a good out-turn for the company and these trends appear to be continuing into the second half, leaving it on track to meet its expectations of profitability for the year ending April 2012.

Tony Shepard, analyst at Charles Stanley, said: 'Over the last 12 months the share price has outperformed the peer group and the wider equity market. Now Stagecoach has a premium rating to the other transport operators such as FirstGroup, National Express and Go-Ahead Group. Stagecoach shares sell on a premium to the sector, but its £340 million return of cash to shareholders and its high bus margins and growth prospects justify this relative rating.

'Nonetheless, it leaves little room for further outperformance and our recommendation is "hold",' he added.

It's the return of the supermarkets on Thursday, this time in the form of Tesco. At the end of the 26 weeks to 27 August, the FTSE 100-listed group reported an 8.8 per cent rise in group sales and a 6.2 per cent climb in pre-tax profit. The faster rate of sales growth to profit growth was due to a weaker UK business and also the investment in the international arena.

Numis does not forecast any change in the trading situation at the end of the third-quarter period, despite the 'big price drop' promotion recently launched. Looking beyond UK shores, it expects Korea to be the driver of growth. It also expected solid gains in China and India – the two markets in Asian with the greatest potential, as well as decent growth in the US.

And wrapping up events will be Standard Chartered, which is also forecast to report on Thursday. Last month's update from the FTSE 100-listed group pointed to slowing revenue growth, with growing concerns over its Indian business. Although the group is not involved with the problems in Europe, it usually comments on the potential knock-on effects to its business in Asia, said Nick Raynor, investment advisor at The Share Centre.

Standard Chartered has also stated it is winning business from banks in Europe and the US as a direct result of the debt crisis.

It might be slow going on the corporate calendar this week, but the economic one shows absolutely no signs of following suit.

First up, markets will get to pore over the service sector purchasing managers' survey for October. The performance of this dominant sector is absolutely critical to hopes that the UK economy can keep growing in the fourth quarter.

The business activity index is expected to show that the sector is continuing to grow, but only just, with economists expecting it to have retreated to a 2011 low.

The retail sales monitor is also due out at the beginning of the week, but is set to make for grim reading, thereby fuelling concerns that retailers are in for a tough Christmas in the face of squeezed consumer purchasing power.

Howard Archer, chief UK and European economist at IHS Global Insight, said it will be 'interesting to see if there was evidence in the survey of sales being lifted by increased promotions and discounting by retailers to try to get pressurised and worried customers to part with their cash'.

Manufacturing output makes a splash on Wednesday and is on track to have fallen 0.2 per cent month-on-month in October after September's 0.2 per cent rise. This would mean year-on-year growth has moderated to 1.5 per cent in October from 2 per cent the previous month.

And on Friday, the markets will have both producer price data and trade deficit figures to contend with. The former is likely to show that output prices were flat month-on-month in November as they were in October. Meanwhile, the consensus forecast is for producer input prices to have edged up by just 0.2 per cent month-on-month in November after falling during the previous month.

And last but not least, trade data is on track to have narrowed to £3.2 billion in October, after soaring to £3.9 billion in September.

Monday 5 December


(Final) Aberdeen Asset Management, Treatt, TUI Travel

(Interim) Sirius Real Estate


Creat Resources Holdings, Integra Group

Tuesday 6 December


(Final) Alternative Networks, Datong, Electra Private Equity, Greencore Group, Southern Cross Healthcare, Innovation Group, Victrex

(Interim) Brulines Group, International Greetings, MDM Engineering Group, Northgate, Park Group

Trading Update

Dolphin Capital Investors, easyJet, Wolseley


Blavod Extreme Spirits, Brookwell Limited, Hellenic Telecommunications Organisation, Starvest, Wessex Exploration

Wednesday 7 December


(Final) ATH Resources, Brewin Dolphin Holdings, Gartmore European Investment Trust, Numis Corporation, Zytronic

(Interim) Kesa Electricals, Micro Focus International, Stagecoach Group, Smith (DS)

Trading Update



Downing Absolute, Edinburgh Dragon Trust, International Biotechnology Trust

Ex-Dividend Payment Date

Associated British Foods, Al Claims Solutions, Brown Group, Big Yellow Group, Castings, Caledonia Investments, Cello Group, Debenhams, De La Rue, Diploma, Dee Valley Group, Fuller Smith & Turner, Grainger, 3i Group, Investec, Invesco Income Growth Trust, Latchways, Majestic Wine, Noble Investments, Netcall, Norcros, Shanks Group, Town Centre Securities, Ventus, Value & Income Trust, Waterman Group, XP Power

Thursday 8 December


(Final) CareTech Holdings, Redhall Group, Titon Holdings

(Interim) Ashtead Group, API Group, Mulberry Group, Premier Farnell, OAO Severstal

Trading Update

PZ Cussons, Standard Chartered, Tesco


Madagascar Oil

Friday 9 December


Associated British Foods, Artilium, Norseman Gold, Pantheon Resources, Tembusa Investments, West Pioneer Properties

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