The week ahead (07/11 - 11/11/11)

There are likely to be more fireworks on the corporate calendar than in the sky this week, as a packed house jostles for investor spotlight.

Kicking off proceedings on Monday will be Taylor Wimpey and after a stream of positive updates from rival housebuilders, this company should offer investors a robust statement.

Sales rates are forecast to be up year-on-year and analysts expect the company to confirm that pricing is stable.

Fellow housebuilder Persimmon takes to the stage 24 hours later and much like its predecessor, should report that trading trends have been positive since the last update, with year-on-year sales up.

'In our view Persimmon is a quality company and it is right it should command one of the higher ratings in the sector, but with the outlook for top-line growth lower than some peers and a similar margin picture, we struggle to justify the 20 per cent premium the shares command relative to stocks such as Bellway,' said Numis analyst Chris Millington.

Marks and Spencer casts the spotlight on the high street when it publishes its interim results on the same day.

But it hasn't been plain sailing for the FTSE 100-listed giant of late, after HSBC downgraded its rating on the stock from overweight to neutral ahead of its results, and Nomura slashed its profit forecasts.

HSBC expects the company to have suffered a slowdown in organic growth sales for general production, prompting it to lower its earnings estimate by 3-9 per cent for 2012 and 2013. In turn, it reduced its price target from 450p to 360p.

Nomura analyst Fraser Ramzan cut his pre-tax profit forecast in the year to March 2012 to £692.2 million from an earlier £724.4 million prediction.

Meanwhile, flying the flag for the hotel groups on Tuesday will be InterContinental Hotels. At the interim stage, earnings before interest and tax (EBIT) was 23 per cent ahead of the prior year and the general consensus calls for third-quarter EBIT to be some 17 per cent ahead.

Despite deteriorating global macroeconomic expectations, to date, the industry has witnessed no signs of a downturn.

Midweek welcomes Sainsbury's into the fold, with what should be a solid set of interim results, despite the challenging consumer environment. Sales data was pre-reported with the second-quarter trading update at the start of October, so the focus of investor attention is likely to fall upon operating margins, outlook comments and any update on strategy.

'Going forward, we expect the trading environment for UK food retailers to remain tough, but we expect consumer demand to be relatively resilient and anticipate that the competitive landscape will stay rational,' said Charles Stanley analyst Sam Hart.

'We think Sainsbury's can continue to deliver solid growth in earnings and dividends in such an environment. We see potential for the recovery in the share price if, as we expect, the group can continue to deliver solid financial results. Our recommendation is "accumulate",' he added.

Fenner is also due to publish its final results on Wednesday and following a pre-close trading update in early September, is on track to produce a strong set of numbers.

Scott Cagehin, analyst at Numis, is expecting high year-on-year growth with a particularly strong performance in its fourth quarter driven by strong end market demand and market share gains.

'We expect current trading to remain robust and demand levels to continue as expected. We forecast full-year 2011 pre-tax profit of £78.5 million and remain buyers of Fenner,' he said.

Those with a penchant for oil will be pleased to read that Tullow Oil is up on the same day.

The FTSE 100-listed company is likely to provide an update on production performance at the Jubilee field in Ghana. Across its development assets, the focus is on completing the farm-down of Uganda EA to Total and CNOOC – management continue to guide that the deal should be completed very shortly, but further delays cannot be ruled out.

Thursday will see the supermarket sweep continue, with results from Morrisons. The company reported a slight jump in like-for-like food sales in the first half, but this performance is likely to have faltered in the third quarter as consumers face ever-greater pressures.

Despite this, Numis analyst Rod Salmon continues to favour the stock as 'it is defensive in food retail and unlike the other main three food retailers, still has space to grow, particularly in the south'.

Rightmove is also set to update the market on Thursday and current trading should be in line with expectations. The company reported good interims in August and analysts agree there is very much the scope for this to continue.

And from homes to bike and car parts, Halfords is also pencilled in to publish on Thursday but unfortunately for investors, is forecast to report a weak set of interim results reflecting a soft sales environment.

Despite this, the business remains cash generative and the balance sheet sound, said Charles Stanley's Sam Hart, but concerns remain surrounding the persistent downward trend in consensus earnings estimates.

'The ongoing £72 million share buyback programme is likely to provide support, but we think the shares are unlikely to perform until the trend in earnings estimates starts to reverse. Our recommendation is "hold",' he added.

Hornby and Spectris continue the momentum on Friday. The former stated back in August that trading was carrying on well, with the UK showing encouraging momentum ahead of the Olympics.

With the key Christmas period still to come, Numis says its sales forecasts are heavily weighted towards the second half, but nevertheless expects substantial growth to have occurred during the first half. Meanwhile Spectris is expected to have enjoyed strong demand during the third quarter and the outlook is promising.

Cagehin said: 'We believe that demand will remain robust as its customers seek more ways to increase efficiencies in this uncertain economic environment. Its strong market positions, good R&D investment and further emerging market expansion should underpin growth prospects in our view.'

The economic calendar is shaping up to be as much of a firecracker as the corporate next week, with attention turned to the November meeting of the Bank of England's Policy Committee (MPC) to be held midweek.

The MPC only announced an extra £75 billion of quantitative easing (QE) last month so it's a safe bet that no further major policy developments will take place. Economists expect a further round of QE in the first quarter of 2012, while interest rates are likely to stay down at 0.5 per cent for at least another year.

But this aside, there will be plenty for the committee to discuss as they will have before them the initial GDP figures and consumer price inflation forecasts, which are unlikely to make for pretty reading.

Elsewhere, retail sales are due out at the start of the week but are likely to have weakened anew in October after seeing limited improvement in September. This would be largely as a result of the ongoing squeeze on consumers' purchasing power and very low and falling confidence.

The Halifax house price index for last month is also due out at the start of the week and should give a good indication of how the market is faring. Halifax is likely to report that house prices were flat month-on-month in October, with economists predicting further falls during the first half of next year.

Producer price data wraps up events on Friday and is forecast to show that output prices rose by just 0.1 per cent month-on-month in October. Meanwhile, the consensus forecast is for producer input prices to have edged down by 0.1 per cent month-on-month in October, primarily due to softer oil prices.

Monday 7 November


(Final) Egdon Resources, Lok'n Store Group

(Interim) Great Eastern Energy Corporation,, Ryanair Holdings

Trading update

Costain Group, Essar Energy, Hiscox, Rentokil Initial, Telecity Group, Taylor Wimpey, Weir Group, Xchanging


Avisen, Ludgate Environmental Fund, Public Power Corporation, TR European Growth Trust

Tuesday 8 November


(Final) Associated British Foods, BowLeven

(Interim) Babcock International Group, Carphone Warehouse Group, DCC, Eckoh, First Quantum Minerals, InterContinental Hotels Group, Kewill, Marks & Spencer Group, Reliance Infrastructure, IMECO, Vodafone Group, Yell Group

Trading update

AZ Electronic Materials, Bovis Homes Group, Capital & Counties Properties, G4S, Hardy Oil & Gas, Hammerson, Lloyds Banking Group, Prudential, Persimmon, Segro, RSM Tenon Group


Asian Citrus Holdings, Energy XXI, Reliance Infrastructure Limited, Strategic Equity Capital

Wednesday 9 November


(Final) Fenner

(Interim) Anglogold Ashanti, FirstGroup, FlyBe, Great Portland Estates , Sainsbury, Smurfit Kappa Group, Scottish & Southern Energy, Talvivaara Mining Company

Trading update

Admiral Group, Ark Therapeutics, Cobham, HSBC Holdings,, Playtech, Resolution, Safestore Holdings, SuperGroup, SIG


Crown Place, Hays, Oilex, Public Service Properties Investment, Quayle Munro Holdings

Ex-dividend Payment Date

Asian Citrus Holdings, AGA Rangemaster Group, Anglo Pacific Group, Bunzl, Centaur Media, Craneware, Dechra Pharmaceuticals, Edinburgh Dragon Trust, First Derivatives, Genus, Home Retail Group, Pan African Resources, Pace, Swallowfield

Thursday 10 November


(Final) Euromoney Institutional Investor

(Interim) Aegon, Canaccord Financial, Dairy Crest Group, Experian, Halfords Group, 3i Group, Land Securities Group, Novae Group, Ruukki Group, Synergy Health, Vedanta Resources, Wincanton, Zhejiang Expressway

Trading update

BBA Aviation, Balfour Beatty, Cookson Group, Eurasian Natural Resources Corporation, IMI, Morrison Supermarkets, Novae Group, Schroders, Sportech, Trinity Mirror, Yule Catto & Co.


Craneware, Genus, Medusa Mining, Mitie Group, Synairgen, Stellar Diamonds, Thorpe

Friday 11 November


(Final) Carr's Milling Industries

(Interim) FlyBe, Hornby, New Europe Property Investments

Trading update

BAA, Clarke, Irish Life & Permanent, Rolls-Royce Group, Spectris


GCP Infrastructure Investments, Galliford Try

This was written for our sister website, Interactive Investor

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