Thursday preview: Kingfisher, Johnson Matthey, ASOS

1st Jun 2011 17:50

Matrix Group has upgraded B&Q owner Kingfisher ahead of the retailer's first quarter results on Thursday, so it must be expecting good news."The company has avoided the heavy promotion of Homebase, the UK's No.2, in the past year or so, and the results have been plain in high-teens profit growth. We expect that to continue, first in the Q1 figures that we are about to see, with c.20% growth in the UK, and through the course of the next year. Q1 profit growth should be equally good in France, also up 20%, and Other International, where Poland has been a particularly strong performer and where profits could nearly double," the broker said.Speciality chemicals group Johnson Matthey issues full year results on Thursday, and expectations are for profit before tax to rise to £334.6m from £228.5m last year. Revenue is seen climbing to £9.94bn from £7.84bn. Earnings per share are forecast to crash through the 100p barrier to 117.02p, up from 86.4p last year, while the full-year dividend is tipped to be 44.58p, up from 39p the year before.Broker Charles Stanley notes that analysts increasingly look at Johnson Matthey (JM) revenues with the volatile Platinum Group Metals (PGM) content stripped out, in an attempt to get a better view of underlying performance. "On this occasion and boosted by the continued recovery in auto-catalysts and confirmed in a recent Q1 2011 trading update from rival Umicore, JM is expected to report c.15% growth in year on year underlying revenue, with earnings before interest and tax (EBIT) on the same basis ahead by c.24% y/y," reports the broker's head of research, Jeremy Batstone-Carr."Investors should note that Umicore guided for markedly higher 2011 EBIT than implied by consensus, suggesting that non-trivial earnings upgrades for that business were likely. The market has chosen to interpret this news positively from Johnson Matthey, particularly so given Umicore's comment relating to its own Recycling division which benefited from strong precious metals pricing and volumes. In the context of a strong trading year and upbeat comment from its rival we expect Johnson Matthey to deliver a strong set of results," Batstone-Carr said. Fast growing online clothing store ASOS is set to deliver another sharp rise in full-year pre-tax profits, with consensus suggesting profits of £27.5m on sales of £340.4m, up from profits of £20.3m on sales of £223m the year before.ASOS has already given the nod to the market and said that profits will be at the higher end of the £26m - £29m guidance range, but even so, the most optimistic projection - from Peel Hunt - is only £28.2m."Based on the run rate over H2 2011E [second half of fiscal 2011] and in Q4 [fourth quarter], the US and wider international markets are running ahead of assumptions for the year ahead. Our focus for the final results will be to assess the development of the next tier of international markets, including China, Russia and Singapore. We also look for an update on the new warehouse development in Barnsley," Peel Hunt said.Switching to the economy, the rash of Purchasing Manager Index releases continues, this time with the one for UK construction. Market consensus is for a reading of 53.5.INTERIMSRedhall GroupINTERNATIONAL ECONOMIC ANNOUNCEMENTSInitial Jobless Claims (US) (00:00)Unit Labour Costs (13:30)Continuing Claims (US) (13:30)Durable Goods Orders (US) (13:30)Productivity (US) (13:30)Bloomberg Consumer Confidence (US) (14:45)Factory Orders (US) (15:00)Crude Oil Inventories (US) (15:30)FINALSASOS, Johnson Matthey, Mckay SecuritiesANNUAL REPORT3i GroupAGMSAqua Resources Fund Ltd., Hochschild Mining, Marwyn Capital II Ltd. (DI), Maven Income & Growth 2 VCT, NB Distressed Debt Investment Fund Ltd., PowerFilm Inc. (Reg S), Real Good Food Company, Vane Minerals, WPPTRADING ANNOUNCEMENTSKingfisherUK ECONOMIC ANNOUNCEMENTSPMI Construction (09:30)FINAL DIVIDEND PAYMENT DATEH&T Group, Highcroft Investment, Interserve, Playtech Ltd., Randall & Quilter Investment Holdings, Weir Group--jh