The week ahead (14/11 - 18/11/11)

The corporate calendar is starting to resemble a pick 'n' mix this week, with an assortment of colourful companies all vying for investor appetite.

ITV is first up on Monday and given the recent volatility in its share price, it would seem the market is unsure whether the broadcaster can sustain its momentum with the major sporting events of 2012 or whether it will fall victim to the general market downturn.

In the group's last update it was expecting advertising rates to slow in the second half of this year.

Paul Richards, analyst at Numis, said that after reporting 2 per cent advertising growth in the first half, the third quarter should be flat, but he saw 'scope for further debt buybacks, acquisitions and/or share buybacks to make the balance sheet more efficient'.

Cranswick is due to report on the same day but unfortunately for investors, is forecast to have suffered a downturn in interim pre-tax profit as a result of higher input costs, most notably for pig meat.

In stark contrast, Burberry flies the flag for the high-end fashion retailers on Tuesday and is on track to report a strong set of interim results, reflecting buoyant conditions in the global luxury goods market, as well as effective marketing and operational execution.

Sam Hart, retail analyst at Charles Stanley, said: 'Assuming that a Lehman-style meltdown in the financial system can be avoided, we expect global demand for luxury goods to remain buoyant, with emerging markets continuing to be the driver. In our opinion, luxury goods is a long term structural growth industry, driven by rising disposable incomes in emerging markets; a growing number of high-net-worth individuals; the rising spending power of working women and a growing propensity to travel.'

However, he warned that the rich valuation suggests good future prospects are largely discounted and the shares could be vulnerable to any sharp increase in investor risk aversion or unexpected softening in demand for luxury goods.

easyJet also flies onto the corporate calendar on Tuesday, less than two months after it increased its pre-tax profit guidance for financial year 2011 due to strong revenue performance and less flight disruption in the second half than previously anticipated.

However, the budget airline faces significant cost pressures in financial year 2012 and despite bookings for the year having started strongly, the uncertain economic environment continues to hang over the airline industry.

And flying the flag for the oilies will be Premier Oil, which is set to provide an update on its flagship developments in Asia; Chim Sao and Gajah Baru, both new start-ups since the company's interims.

Production is likely to be at the lower end of current guidance of 40,000-45,000 barrels of oil equivalent per day given delays at Gajah Baru.

'Fundamentally, post the start-up of Gajah Baru and Chim Sao, Premier is a growing and cash-flow generative business with a sizeable production/development footprint. We believe an increased North Sea focus after the acquisition of EnCore should benefit the company after recently unsuccessful exploration forays in higher-risk basins,' said Numis analyst Sanjeev Bahl.

 

Midweek welcomes an interim statement from Barratt Developments and following updates from other housebuilders, this FTSE 250-listed company is forecast to report that the sales rate is up year-on-year and should lead to a rise in the forward order book.

ICAP is also set to report amid the general view in the market that volatility is good for firms such as ICAP. However, there have been growing concerns over the current pressure on investment banks, which could lead to lower future trading volumes for the company so any outlook comments by the chief executive will be very welcome.

SABMiller is up for the taking on Thursday and should unveil a decent set of interim results, despite mixed trading conditions across its broad portfolio of markets.

Beer volumes and sales data was published in October, so the focus of investor attention is likely to fall upon operating margins, outlook comments and any strategy update.

Hart commented: 'SABMiller is well positioned to benefit from rising disposable incomes and expansion of the urban middle class in emerging markets, where populations aspire to drink branded beer and can increasingly afford to do so.

'Operations in developed markets are likely to remain lower growth, but will act as the cash cow to fund growth in faster growth markets. Our recommendation ahead of the results is "accumulate".'

The high street gets a look in with a statement from Mothercare. Economic factors are likely to prove sensitive for quite some time as austerity packages start to take effect in the UK and Europe. Other factors such as high inflation, high levels of unemployment and pay freezes are also likely to cast an ugly spell on the high street and the FTSE 250-listed mother and baby shop is likely to feel the squeeze along with all the rest.

'The speed at which the UK has declined has surprised us and it will clearly take some time to exit the legacy of the UK store portfolio. Despite the strength of the international business we remain cautious on the stock but hope that the interims will provide clarity on the benefit of store closures over the next two to three years,' said Numis analyst Andrew Wade.

Aga Rangemaster makes an appearance on Friday and interim results issued in August showed although sales were slowing the company was benefiting from cost-cutting measures.

Investors are unlikely to see the effect of this in this update and so, if trading remains week, the market could see an adverse reaction to the share price, according to Nick Raynor, investment advisor at The Share Centre.

And wrapping up events will be Huntsworth, which has been making good progress in winning significant international business. However, lengthy procurement processes, and delayed decision-making due to macro uncertainty means the company expects the revenue impact in the second half to be limited.

'We highlight that the group raised its interim dividend by 11 per cent, which we believe signals the management's confidence that these global wins will drive profitability in financial year 2012,' said Numis analyst Dominic Buch.

And if you thought that was all – you'd be mistaken. The economic calendar is looking equally juicy.

Consumer price inflation for October is released on Tuesday and is forecast to have edged back slightly after soaring to a three-year high of 5.2 per cent in September.

Howard Archer, chief UK and European economist at IHS Global Insight, expects it to have retreated to 5.1 per cent last month as lower food prices and increased discounting by retailers offset the price rises from utility companies.

Unemployment data for September is released on Wednesday, but is set to make unpleasant reading. With the economy in dire straits, economists are predicting further deterioration, thereby extending the recent marked weakening trend.

Specifically, claimant count unemployment is believed to have risen by 25,000 in October, which would be up from an increase of 17,500 during the previous month.

Average underlying earnings growth is due out the same day and is likely to paint an equally grisly picture, with growth expected to have softened from already very weak levels.

Making it a midweek hat-trick, the Bank of England's quarterly inflation report for November will be published and is forecast to reveal that the bank has become markedly more pessimistic about growth prospects since the August report in the face of deteriorating domestic and international factors.

As a result, Archer says the BoE may very well downgrade its consumer price inflation forecasts significantly to show it falling clearly below the 2 per cent target level in 2013 and staying appreciably under that level on the two-year policy horizon.

And last but not least, retail sales volumes will give an idea of how the high street has been faring on Thursday.

They are likely to have fallen by 0.1 per cent month-on-month in October after a somewhat surprising increase of 0.6 per cent in September, with consumer spending in the near term looking very hard done by.

Monday 14 November

Results

(Interim) Advanced Computer Software, Cranswick, e2v technologies, Electrocomponents, Entertainment One Group, Latchways, Majestic Wine, UBC Media Group, Vectura Group, Workspace Group

Trading update

Dignity, Interserve, ITV, Kingspan Group, Lonmin

AGM/EGM

Etalon Group

Tuesday 15 November

Results

(Final) Accumuli, easyJet, Infrastrata, Supercart

(Interim) JSC Acron, Advanced Computer Software, Aveva Group, British Land Company, Burberry Group, Cropper (James), Cable & Wireless Worldwide, Oxford Instruments, Renold, TalkTalk Telecom Group, Velti

Trading update

Afren, CRH, Drax Group, Johnston Press, Kier Group, Micro Focus International, Menzies (John), Premier Oil

AGM/EGM

Cap-XX, Henderson Eurotrust, IRP Property Investments, Sutton Harbour Holdings, Wilmington Group

Wednesday 16 November

Results

(Final) United Drug

(Interim) Alterian, Hampson Industries, Harvard International, ICAP, London Stock Exchange Group, New World Resources, Speedy Hire, UK Mail Group

Trading update

Beazley, Centaur Media, Keller Group, Melrose, Reed Elsevier

AGM/EGM

Allergy Therapeutics, Barratt Developments, Camco International, Cash Converters, Gaming VC Holdings, Kier Group, Mobile Streams, Northamber

Ex-dividend payment date

Air Partner, British Sky Broadcasting, Gleeson, Personal Group Holdings, Rotork, Tristel

Thursday 17 November

Results

(Interim) Atkins, BTG, Dart Group, Investec, Metric Property Investments, Mothercare, Norcros, Rit Capital Partners, SABMiller

Trading update

Alpha Pyrenees, AMEC, Amlin, Bumi, Close Brothers Group, Chaucer Holdings, Derwent London, Pace, Ricardo, Rexam, Serco Group, UTV Media, Vitec Group

AGM/EGM

Close Brothers Group, Dunelm Group, El Oro And Exploration Company, New Star Asset Management Group, Ricardo, Alternative Asset Opps, Versatile Systems

Friday 18 November

Results

(Interim) Absolute Return Trust, Record

Trading update

Bioquell, Chemring Group, Chesnara, Hill & Smith Holdings, Huntsworth, Intertek Group, Rotork, Tullett Prebon

AGM/EGM

Albemarle & Bond Holdings, ClearDebt Group, Helphire Group, Hansard Global, Matchtech Group, Nautical Petroleum, Physiomics, Savile Group.

This was written for our sister website, Interactive Investor

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