The week ahead

6 April 2010

This week will be more subdued on the corporate earnings front, but there are still a few favoured numbers to get your teeth stuck into.

For those who like a tipple, Marston's steps into the spotlight on Wednesday. Much like the rest of the pub industry, the group has suffered, but after notching up a successful rights issue and a reasonable Christmas trading period under its belt, investors will be keen to see signs that it is now firmly on the road to recovery.

Looking ahead, the group may benefit from the World Cup which could result in an increase in sales, helping to entice investors on board.

Chloride Group will also offer up its trading statement on Wednesday and, thanks to its frequent updates, has enjoyed a steady rise in share price.

The group's order book remains firm and investors are expecting profits to meet company expectations.

On Thursday, high street stalwart Marks & Spencer is set to rustle up its fourth quarter trading statement which should show yet further improvement for the fifth quarter in succession.

However, the store, which will soon welcome Marc Bolland on board as chief executive, is bound to issue a cautious outlook as has befitted its rivals of late.

Analyst Andrew Wade of Numis says: "Having been on an improving trend for the last four quarters, we expect like-for-likes to move ahead again from the third quarter. We look for general merchandise like-for-likes of +2% (third quarter was +1.2%) and food +0.5% (third quarter +0.4%) and would not be surprised to hear some negative commentary on the food gross margin.

"More broadly, we anticipate a cautious outlook statement and do not expect consensus PBT forecasts to move far. On circa 12 times March 2011 forecasts, the business looks fair value given the macro uncertainties."

For those with their finger on the mining pulse, FTSE 100-listed major Vedanta Resources will offer its production results on Thursday.

The copper producer found favour with investors last week after it increased its share repurchase programme from $500 million to $825 million. To date, Vedanta has bought back 21.1 million ordinary shares as it seeks to "enhance value for all Vedanta shareholders".

Investors will be hoping its production figures will be equally value-enhancing.

Finally, UK recruitment agency Michael Page will bring the week to a close with its trading statement on Friday.

Shares in the firm have more than doubled since the end of 2008 and the expectation is that its fourth quarter results are likely to offer yet more positive news to the mix.

Steve Woolf, analyst at Numis, says: "Following a strong fourth-quarter trading period, we look for a continuation of the trend in early 2010 driven by the financial sector. We look for net fees of £89.6 million, down 5 per cent year-on-year on a like-for-like basis, with a return to growth forecast for the second quarter as comparatives reach their easiest point.

"Page remains a key recovery play in the sector, but trading on 27 times full-year 2011 earnings, the shares appear up with events for now."

On the economic front, Wednesday and Thursday are shaping up to be the days to keep an eye on.

Nationwide's Consumer Confidence Index for March and CIPS Services purchasing managers' index for March are both set to hit the public domain on Wednesday.

The services sector purchasing managers' index is forecast to show a slight improvement in activity in March after rebounding in March from January's weather-inflicted slowdown. Business activity is expected to edge up to 58.5, after hitting a three-year high of 58.4 in February.

More important will be the Bank of England's interest rate decision on Thursday. Given the unanimous decision to leave interest rates steady in March, there is little expectation of a rise in April.

Howard Archer, chief UK and European economist at IHS Global Insight, says: "All nine members voted in favour of unchanged interest rates and quantitative easing at the March meeting and developments since then suggest there is no need to change tack.

"Consequently, it looks a racing certainty that the Monetary Policy Committee (MPC) will decide on Thursday to keep interest rates down at 0.5% and will not add to the £200 billion already spent on quantitative easing. Indeed, it currently looks highly likely that the MPC will be sitting on their hands for many more months to come."


(Finals) Brightside (Interims) Candover Investments

Trading updates

Just Car Clinics Group, Xploite

Infrastructure India

Dividend payment date
(Interim) Carclo, Diageo, Phoenix IT Group


(Finals) Shed Media, Speymill Group (Interims) Marston's

Trading updates
British Airways, Chloride Group, Highcroft Investment, Hydro International, Prudential

IG Group Holdings

Liberty International

Dividend payment date
(Final) Electronic Data Processing (Interim) Pennon Group


(Finals) International Public Partnerships, Rotala (Interim) Hays, Misys, Robert Walters, ClearStream Technologies Group, Matchtech

Trading updates
Balfour Beatty, easyJet, Marks & Spencer Group, Victrex, Vedanta Resources

Low & Bonar, Matrix European Real Estate Investment Trust, Scottish American Inv Company

Dividend payment date
(Final) Thomas Cook Group (Interim) JPMorgan Mid Cap Inv Trust, Oxford Instruments (Quarterly) GlaxoSmithKline


(Interims) Michael Page International

Trading updates
John Menzies, Michael Page International, X5 Retail Group

Vatukoula Gold Mines

Dividend payment date
(Final) Foresight 2 VCT (Interim) Cassidy Brothers

Add new comment