Thursday preview: Aviva, Balfour Beatty, Taylor Wimpey ...

2nd Mar 2011 17:18

Insurance giant Aviva is set to issue full year results on Thursday, and JP Morgan Cazenove thinks the figures are more likely to delight than disappoint.The blue-blooded broker is predicting operating earnings will have risen by almost a quarter in 2010 and forecasts a 12% year on year increase in new business sales in the final quarter of 2010.Charles Stanley reckons earnings per share will dip to 56.4p from 78.1p in 2009, despite which it expects the company to bump up the full year dividend to 25.4p from 24.0p."On 20 January, Aviva held an investment morning to brief investors on the details of its balance sheet management. Aviva stated that it aims to slash its hybrid debt by at least £700m over the next three years as part of its overall strategy to boost its profits and returns for shareholders. Aviva also highlighted that it had cut its pension deficit to £0.4bn as of 30 November 2010 from £1.7bn at the end of 2009," the broker noted.At its trading update in January, infrastructure specialist Balfour Beatty said it had been trading in line with expectations. That would imply full year pre-tax profits of £296.3m on turnover of £9.611m.Panmure Gordon says the key issues to look out for will be: the outlook for public sector spending after the government's comprehensive spending review; the private sector recovery; and spending in the US construction industry."The group retains a £15bn order book, giving us confidence on near term numbers. Professional Services continues to perform well, with Parsons Brinckerhoff exceeding expectations. Construction is solid, despite some uncertainty in the UK and US. Contract momentum has been good in Support Services. Infrastructure Investments retains a healthy bid pipeline," the broker noted.The broker is forecasting profit before tax of £325m, and earnings per share of 35.60p. House builder Taylor Wimpey should follow its sector peers in announcing a moderate improvement in trading conditions since the start of the year."In our view, a key area of focus will be news of the possible disposal of its North American operations as this could prove transformational for the group's balance sheet," Panmure Gordon said."In the UK, we expect the group to report the completion of 9,962 units at an average selling price of £171,000. Margins should have shown significant improvement during the year, and we forecast a full year UK net margin of 7.1%," the broker added."Within its North American operations, we expect the group to announce the completion of 4,140 homes at selling prices broadly in line year on year," Panmure Gordon said.Panmure Gordon is almost a million pounds below consensus with its forecast of profit before tax of £46.5m. It forecasts earnings per share of 1.0p (consensus: 1.19p) and a net asset value per share of 57p.The big question at newspaper publishing group Trinity Mirror is whether trading has improved enough to resume paying dividends?"Trinity's reading of the macro environment and its level of focus on completing a major transaction (Mecom or DMGT Regionals?) are likely to be key considerations" when the Mirror publisher unveiles results on Thursday, reckons Singer Capital Markets. "The pension deficit is likely to show a marked improvement due to the move in discount rates and there are some favourable pension rule changes coming through," the broker notes.Singer believes that mature businesses such as Trinity"need to pay a dividend" and believes that when it resumes pay-outs "the sooner the valuation will move to reflect the value of the business and volatility will reduce."Singer predicts that revenue will rise by 1.2% to £772.7m, reflecting the benefit of the Guardian Regional Media acquisition. It thinks earnings before interest and tax will rise 16.8% to £123,1m. A "token dividend" of 0.5p could be in the offing, the broker believes.INTERIMSFrontier IP GroupINTERNATIONAL ECONOMIC ANNOUNCEMENTSECB Interest Rate (EU) (12:45)ISM Services (US) (15:00)Retail Sales (EU) (10:00)GMSAnglo & Overseas, Astaire Group, Evolve Capital, Moss Bros GroupFINALSACTA Spa, Amec, Aviva, Balfour Beatty, Cobham, Communisis, CPP Group, Grafton Group Units, Hardy Underwriting Bermuda Ltd. (DI), Howden Joinery Group, IMI, OAO Severstal GDR (Reg S), Psion, Spirent, Taylor Wimpey, Total Produce, Trinity Mirror, Vitec GroupIMSSDS SmithEGMSAtlantic Coal, e-Therapeutics, Gitanjali Gems Ltd. GDR (Reg S), Premier FoodsAGMSIDOX, Jersey Electricity 'A' Shares, Local Shopping REIT, LPA GroupTRADING ANNOUNCEMENTSKazakhmys, Liontrust Asset Managament