The week ahead (19/12 - 23/12/11)

'Twas the week before Christmas when the corporate calendar was still.

But don't fear, for Santa has still managed to rustle up a few chestnuts for investors to get their teeth stuck in to.

High-street entertainment chain HMV is due to report its interim results on Monday. Like-for-like sales for the first 18 weeks fell 15.1 per cent, resulting in total retail sales down 21.8 per cent, although a sturdy performance from HMV Live provided a small offset.

Numis analyst Andrew Wades expects this weakness to have continued through the remainder of the half, and anticipated downside pressure to its April 2012 pre-tax profit forecast.

'The interim result will provide an update on the progress of the technology offering to 150 stores, but this is not predicted to have a significant impact in the period. We continue to believe that the chain will struggle to trade itself out of difficulty in a structurally challenged space together with additional financing costs and tight credit terms and would continue to avoid,' he added.

Aggreko is also set to publish its trading statement at the start of the week and is on track to have enjoyed another strong final quarter to the year.

Analysts are predicting solid growth during the period, after it notched up decent figures in the third quarter. During the period from 1 July to 21 October, the company reported underlying revenue growth of 22 per cent and said it believes pre-tax profits for the year will be at least £320 million.

Carnival makes an appearance on Tuesday with its preliminary results. The company's share price is down 21 per cent this year and analysts warn that movements in fuel prices and currency may have a significant influence on the share price.

Wyn Ellis at Numis said: 'For 2012, we estimate that a 1 per cent movement in the fuel price would lead to a 1 per cent increase or decrease in earnings per share. We estimate that a 1 per cent movement in the US dollar against all other currencies has a similar impact on earnings. Two things which investors should look out for with the results are the continued impact of the Arab Spring and concerns about economic weakness in the European source market.'

Sam Hart, analyst at Charles Stanley, said outlook comments and guidance for next year will be closely analysed. Recent cruise and hotel industry surveys suggest that leisure demand in the US is surprisingly buoyant, with encouraging forward booking trends for 2012. In Europe, it seems almost inevitable that the ongoing sovereign debt crisis and associated austerity will continue to weigh on consumer confidence, leading to subdued yields at best.

'Longer term, we believe cruising remains a structural growth global industry, driven by rising cruise penetration in Europe and Asia. Carnival's 45 per cent world market share means it is well placed to benefit from this trend.'

National Express is also scheduled to report on Tuesday, not long after it reported its third-quarter interim management statement. In November, the FTSE 250-listed group said it had continued to achieve organic growth, with revenue up 5 per cent on prior year.

At the time, it said its financial position remained robust, having invested £125 million in capital for fleet replacement and selected organic growth, including US school bus contract wins.

And last but not least, Wednesday sees Arden Partners report. At the beginning of November, the institutional stockbroking company said its profit would be materially less than market guidance as a result of tough trading conditions.

'Given difficult market conditions, the directors believe that the overall result is satisfactory. The company has a good pipeline of both UK and Indian opportunities and whilst commission income levels will remain under pressure, the company will continue to manage and maintain its substantial cash position with overheads remaining subject to stringent control,' the company said at the time.

Investors will be keen for an update on the situation and any comments on what 2012 might hold for the company are likely to be closely scrutinised.

The UK pre-Christmas week will also see the release of the final estimate of third-quarter GDP, which is expected to stand unchanged at 0.5 per cent quarter-on-quarter.

The breakdown of GDP growth in the third quarter did little to inspire confidence over the state of the economy as growth was driven by the building up of stocks and government spending, with consumer spending stagnating.

'The final third-quarter release, whatever the outturn, is already history, particularly as fears rise over the outlook for the UK economy in the period ahead. We are now forecasting a mild UK recession through the first half of next year,' warned analysts at Investec.

Also out this week is the consumer confidence index, which is on track to forecast that already very weak sentiment edged down further in December to the lowest level since the start of 2009.

Howard Archer expects the GfK NOP consumer confidence index to have eased back to -32 in December after rising to -31 in November.

'We expect consumer confidence to have been pressurised once again in December from serious fears of renewed recession in the UK and associated mounting concerns over jobs. Concern over the problems in the eurozone and the potential impact on the UK is also likely to have weighed down on confidence. Meanwhile, consumers' purchasing power is currently still being squeezed substantially by elevated inflation and muted wage growth,' he said.

Public finances data is due out midweek and should show a modest improvement compared to a year earlier. This would primarily be as a result of January's VAT rise and other fiscal measures that have increasingly kicked in since April.

And last but not least, current account deficit is set for release on Thursday. Economists expect it to have widened to £6.3 billion in the third quarter after narrowing sharply to £2 billion in the second quarter.

'We expect the current account deficit to have widened as a result of a widened total trade deficit as well as moderation in the surplus on the net income account,' said Archer.

Monday 19 December


(Interim) F&C Global Smaller Companies


Kedco, Proactis Holdings, ShalkiyaZinc

Tuesday 20 December

Trading Update

National Express Group


Air China, Berkeley Mineral Resources, Gemfields, Henderson Far East Income, Independent Resources, Keystone Investment Trust, Power Capital Global, Renewable Energy Generation

Wednesday 21 December


(Final) Arden Partners


JSM Indochina, Metal-Tech

Ex-dividend payment date

London & Associated Properties

Thursday 22 December


Blue Planet Worldwide Financials Investment Trust, Gem Biofuels, Peninsular Gold

Friday 23 December


This was written for our sister website, Interactive Investor

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