Thursday preview: Punch, Spirit, Restaurant Group

31st Aug 2011 17:20

Thursday will see Punch Taverns and Spirit Group issue their first trading update as separate entities since the two entities split up.Panmure Gordon recently slashed its target price for Punch Taverns by 42% from 19p to just 11p, given the economic uncertainty and the disposal of its non-core pubs. On a pro-forma basis (reflecting the demerger of the Spirit business which occurred at the start of August), Panmure expects the company to make £78m in pre-tax profit during the year ending 21 August 2011 and thinks that this will drop to £58m the year after, "mainly reflecting the disposal c500 non-core pubs and a slight increase in the interest charge to 6.9%," said analysts Simon French and Lindsey Kerrigan. The broker also highlights a double-dip recession in the UK and legislation against the tied pub model as key risks going forward. As for the Spirit Pub Company, Royal Bank of Scotland (RBS) projects a 15% compound earnings per share growth rate during 2011-13. "We target double-digit investment-led growth from the underinvested managed pub estate, as we expect the 'non-core' leased estate to be reduced over time," RBS analysts noted.Frankie & Benny's restaurant chain operator, The Restaurant Group, is set to announce a 4% increase in profit before tax, more or less in line with inflation, according to Numis Securities. The company, which specialises in restaurants in edge of town shopping centres and at London airports, will have benefited, in Numis's view, from a recovery in cinema attendances and increased traffic at airports. As Panmure Gordon points out: "External data points for June remained firmly positive with the Coffer Peach Business Tracker reporting +3.9% LFL [like-for-like] sales growth, cinema admissions +45.5% and BAA airport traffic +4.9%.While Numis goes for pre-tax profit of £25.4m, Panmure Gordon is less optimistic, and goes for £24.0m, and earnings per share of 8.5p. It has pencilled in an interim dividend of 1.7p."Whilst we anticipate trade to have been tougher over July and August (primarily due to tougher comps) we think the group continues to make profitable market share gains. In our view, the mediocre weather in recent weeks will have had a favourable impact on the majority of the group's estate with footfall at cinema and retail parks," Panmure Gordon said.INTERIMSChina Food Co, Restaurant Group, ServicePower TechnologiesINTERIM DIVIDEND PAYMENT DATEBritish Portfolio TrustINTERIM EX-DIVIDEND DATEPromethean WorldQUARTERLY PAYMENT DATEJPMorgan Claverhouse Inv TrustINTERNATIONAL ECONOMIC ANNOUNCEMENTSAuto Sales (US) (15:00)Bloomberg Consumer Confidence (US) (14:45)Construction Spending (US) (15:00)Continuing Claims (US) (13:30)Initial Jobless Claims (US) (13:30)ISM Manufacturing (US) (15:00)ISM Prices Paid (US) (15:00)PMI Manufacturing (EU) (09:00)PMI Manufacturing (GER) (08:55)Productivity (US) (13:30)GMSLipoxenFINALSEaga, Go-Ahead Group, Hargreaves Lansdown, Hays, MonitiseAGMS@UK, Amiad Filtration Systems Ltd., Amphion Innovations, Cohort, Consort Medical, D1 OilsTRADING ANNOUNCEMENTSPunch Taverns, Spirit Pub CompanyUK ECONOMIC ANNOUNCEMENTSPMI Manufacturing (09:30)--jh