Friday preview: SSE, Mitchells & Butlers

19th May 2011 17:49

Energy provider Scottish and Southern Energy (SSE) releases full year results on Friday that should not contain too many surprises after the company issued profits guidance back in February. The company said back then that full year profits should be in line with City expectations which, at the time, stood at £1.29bn.Since then, expectations for pre-tax profits have eased to £1.24bn on revenue of £21.66bn. Earnings per share are forecast to be 109.13p, while the all-important dividend is set to rise to 74.80p, according to the City's tea-leaves readers.Nomura is slightly above the lowered consensus figure with its forecast of £1.25bn, a figure it has stuck with since November 2010. It sees upward pressure to its forecasts for the current financial year "as a result of an improved generation environment (higher power prices and dark green spreads).""On the back of this improved operational outlook and some minor disposals, we also see balance sheet pressures as much diminished," the Japanese broker added. Credit Suisse is looking even further ahead, and reckons SSE will benefit from both a pricing and organic volume uplift in the next two years, which should see the company return to growth levels for both earnings before interest and tax (EBIT) and profit before tax last seen back in 2008. "We expect a broadly flat year-on-year result, with growth in networks offsetting a higher net debt / interest charge. We find encouraging that despite poor wind and hydro load factors, and with clean spark and dark spreads at low levels holding back generation / supply, profitability will be flat," the Swiss bank says. "Full year to March 2011 is therefore the 'low point', in our opinion. From here on we expect growth, which does not seem to be reflected in Price/Earnings multiples," it added. Credit Suisse has also been casting its eyes over pubs group Mitchells & Butlers, which releases interims on Friday. The figures will be distorted by the sale, early in the reporting period, of 333 non-core High Street boozers, but Credit Suisse believes trading in the remainder of the estate should have been robust. The balmy April weather could push like-for-like (LFL) sales growth above 5% for the half, from +3.1% LFL in the first 19 weeks of the half-year. There may also be good news on the dividend front, with Credit Suisse pencilling in a figure of 3.1p for the company's first dividend since late 2008.According to Credit Suisse, the main points of interest in Friday's statement will be: 1) current trading; 2) closure costs from accelerated conversions (54 in fiscal 2010/11, 70 in fiscal 2011/12) and return on invested capital achieved, where the company has guided to a figure greater than 30%; 3) cost inflation outlook; 4) Dividend reinstatement and policy going forward. Panmure Gordon is forecasting Mitchells & Butlers will announce profit before tax of £64m, down from £76m at the interim stage last year, reflecting the aforementioned disposal of 333 pubs, as well as the later timing of Easter which this year falls outside of the interim reporting period. Like Credit Suisse, it thinks the company will resume dividend payments, and it is forecasting an interim divi of 3.75p. INTERIMSFuture, Mitchells & ButlersINTERIM DIVIDEND PAYMENT DATEAlbemarle & Bond Holdings, James HalsteadQUARTERLY PAYMENT DATECaterpillar Inc.INTERNATIONAL ECONOMIC ANNOUNCEMENTSConvenience Store Sales (JPN)Bank of Japan target rate (JPN)Producer Price Index (GER) (07:00)Current Account (EU) (09:00)Consumer Confidence Indicator (EU) (10:00)FINALSScottish & Southern EnergyANNUAL REPORTAlexander MiningSPECIAL DIVIDEND PAYMENT DATEEdinburgh Inv TrustEGMSSVM UK Active FundAGMSAlliance Trust, Derwent London, DM, Energetix Group, Intertek Group, John Menzies, Michael Page International, MTI Wireless Edge Ltd., OJSC Magnitogorsk Iron & Steel Works GDR (Reg S), OJSC Polyus Gold ADR, Premier Oil, Red Leopard Holdings, Tribal Group, Ukrproduct Group Ltd.FINAL DIVIDEND PAYMENT DATEBG Group, Chesnara, Costain Group, Dunedin Enterprise Inv Trust, Fresnillo, Glanbia, Greggs, Hellenic Carriers Ltd., International Personal Finance, Johnson Service Group, Millennium & Copthorne Hotels, Molins, Norish Units, Paddy Power, Petrofac Ltd., T Clarke, Tullow Oil, Vitec Group---jh