Tuesday preview: Burberry, TalkTalk Telecom, Enterprise Inns

15th Nov 2010 16:14

High flying fashion chain Burberry is fast becoming one of Britain's best known global brands. Charles Stanley thinks the success story will continue with "a strong set of interim results, driven by a buoyant sales performance and higher gross margins." The results will, however, be complicated "by the ongoing restructuring of operations in Spain and the buyout of its franchise partner in China," the broker notes.Charles Stanley is forecasting revenue of £672m, up from £572m at the interim stage last year, and earnings before interest, tax and amortisation of £97.0m, up from £82.1m. Profit before tax is tipped to climb to £93.0m from £78.4m, with earnings per share up to 15.8p from 13.6p. Charles Stanley thinks the interim dividend will be hiked to 4.1p from 3.5p.Internet service provider TalkTalk Telecom issues interim figures, and Daniel Stewart thinks the near-term focus will be on the integration of the Tiscali UK broadband customers. Assuming management has that under control, however, the broker thinks attention will soon turn to internet protocol TV (IPTV) delivered on the YouView platform."We expect Talk Talk to report good progress in subscriber integration, with 70,000 net adds for the first half," the broker predicts. The group added 34,000 (net) new broadband customers in the third quarter so Daniel Stewart's forecast suggests a small pick-up in subscriber growth in the second quarter.The group's broadband base at the end of the first quarter stood at 4.231m, and Daniel Stewart is projecting this will have risen to 4.337m at the end of September. Broadband average revenue per user (ARPU) is tipped to rise to £24.02 for the first half, from £23.90 at the end of the first quarter. Total revenue is seen rising to £903m.Enterprise Inns kicks off the reporting season for pub companies with final results on Tuesday. Market consensus is for profit before tax of £176.7m and earnings per share of 25.8p, but it is likely that the debt figure will be of equal, or more, importance to the market. "Debt remains above the comfort levels of most investors," notes Singer Capital Markets, at 8.1 times projected earnings for the current year, though this number falls to 7.7 based on Singer's projected earnings for next year. "Although Enterprise has a combination of bank debt, corporate bonds and securitised bonds, we do not believe it has the flexibility that Punch has potentially to exit any class of liability," the broker adds.The broker is concerned that after a period in which pub valuations held steady, the results might see a return of impairments on the value of the estate, though it thinks there might be some good news on the dividend front. "With the benefit of pub disposals, we forecast net positive cash flow averaging £280m pa for the next three years. This should be adequate to pay down debt amortisation obligations, including the £625m bank facility which terminates in December 2013. We believe that as well as this, it could also support a dividend of 3-5p, which we anticipate will be reinstated with this announcement. This falls far short of the previous level of 16p, but would equate to a similar percentage yield," the broker notes.As well as a full schedule of results Tuesday sees the release of UK consumer price inflation data, with the annual inflation rate likely to have remained at 3.1% in October. The core consumer price inflation rate is seen sticking at 2.7%, unchanged from September, or maybe easing down to 2.6%.Retail price inflation is forecast to have remained unchanged at 4.6%.INTERIMSAdvanced Computer Software Group, Burberry Group, Byotrol, Cropper (James), HSBC Infrastructure Company Ltd., Record, TalkTalk Telecom Group , Trifast, VictoriaINTERNATIONAL ECONOMIC ANNOUNCEMENTSMachine Tool Orders (JPN)RBA Interest Rate Minutes (AUS) (00:00)Non-Farm Payroll (FRA) (07:45)Consumer Price Index (EU) (10:00)New Car Registrations (EU) (10:00)ZEW Survey (EU) (10:00)ZEW Survey (GER) (10:00)Producer Price Index (US) (13:30)Capacity Utilisation (US) (14:15)Industrial Production (US) (14:15)NAHB Housing Index (US) (15:00)ABC Consumer Confidence (US) (22:00)Q3Frutarom Indstries Ltd.GDR (Reg S), MHP SA GDR (Reg S)FINALSeasyJet, Enterprise InnsANNUAL REPORTWorld Careers NetworkIMSSJohn Menzies, Premier OilAGMSAntisoma, BHP Billiton, Dunelm Group, IRP Property Investments Ltd., MeDaVinci, Smiths GroupUK ECONOMIC ANNOUNCEMENTSConsumer Price Index (09:30)Retail Price Index (09:30)DCLG House Prices (09:30)FINAL DIVIDEND PAYMENT DATEStrategic Equity Capital