Tuesday preview: N Brown, Bellway, Informa, inflation

15th Oct 2012 16:35

Panmure Gordon recently downgraded its rating for internet and catalogue home shopping firm N Brown from 'buy' to 'hold', ahead of the firm's interims on Tuesday.Panmure Gordon has pencilled in sales growth of 2.8% to £373.7m, a gross margin decline of 0.7 percentage points to 54.2% and earnings before interest and tax of £45.7m. It predicts half year profit before tax of £41.7m, and diluted djusted earnings per share of 11.6p. The interim divi is seen rising 4% to 5.5p. Seymour Pierce is forecasting a 3% growth in half year sales but a 7% decline in profit before tax to £42.3m, "driven by a lower gross margin as product margin had been under pressure from mix.""We will be looking for management to confirm that it still expects H2 [second half] margin to benefit from lower mark downs and input prices, which should stimulate demand as we expect some of the sourcing benefits to be invested into lower prices. It will be interesting to see if credit control has continued to be relaxed and whether consumers are still paying down debt as there is evidence elsewhere that they may be starting to borrow more," Seymour Pierce's Kate Calvert opined.Business publisher and events organiser Informa issues a third quarter interim management statement which could be a mixed bag. For the first nine months of the year, Investec forecasts like-for-like (LFL) sales will be down 0.7% year-on-year, with the Academic side up, but PCI/Events still down.On the data (PCI) side, Investec reckons nine-month LFL sales will be down 3.7%. The Events business, which was running 1.6% behind the previous year's sales on a LFL basis at the halfway point, is predicted to see an improvement over the nine-month duration to a decline of 1.0%.Academic revenues are expected to be 3.7% ahead on a LFL basis, as they were at the half-year stage."While we do not expect a profit/margin number, we hope for some indication of progress," the broker said.House builder Bellway will report preliminary results, and Panmure Gordon predicts profits will be up 49% on last year.The broker expects Bellway to report the completion of 5,226 units over the full year at an average selling price of £187,000, which would represent a 6.5% improvement on the previous year's average. Net margins are likely to have improved by two-and-a-quarter percentage points to 11.0%, Panmure Gordon thinks.The market consensus is for profit before tax of £98.2m on revenue of £985m. Earnings per share are tipped to surge to 61.48p, paving the way for the full year dividend to be hiked to 17.15p from 12.50p, if analysts covering the stock are to be believed. Switching attention to the economy, Credit Suise expects the UK consumer price index (CPI) annual inflation rate for September to ease to 2.1% from 2.5% in August, which puts it slightly below the consensus forecast of 2.2%. "CPI inflation could skirt the 2% inflation target in September, for the first time since the end of 2009, largely on the back of base effects from energy price hikes last year. In addition, it is possible that air fares may exert some downward pressure on prices, after unusually high levels in July and August. Clearly, if this does not occur it presents an upside risk to our forecast. Also on the upside, we expect petrol prices to increase by just less than 4%mm [month-on-month], contributing around 0.2%mm to the change in headline CPI," Credit Suisse said."In the medium term however, inflationary pressures are likely to be on the upside. In the index for October data (released next month), higher tuition fees could increase the CPI index by around 0.2% on the month. In addition, the recent behaviour of agricultural harvests suggests that food inflation could accelerate by a couple of percent over the next six months. Lastly, fears of hikes to oil and gas prices continue to pose a threat to low inflation," the Swiss bank added.INTERIMSBrown (N.) Group, Vertu MotorsINTERNATIONAL ECONOMIC ANNOUNCEMENTSCapacity Utilisation (US) (16:15)Consumer Price Index (EU) (10:00)Consumer Price Index (US) (13:30)Harmonised Index of Consumer Prices (EU) (10:00)Industrial Production (US) (16:15)New Car Registrations (EU) (10:00)ZEW Survey (EU) (10:00)ZEW Survey (GER) (10:00)Q3GKNGMSBlavod Wines & Spirits, Energetix GroupFINALSBellway, EpiStem Holdings, Plexus Holdings, Smiths News, Spirit Pub CompanyIMSSGKNEGMSGlobal Ports Investments GDR (REG S)AGMSIn-Deed OnlineUK ECONOMIC ANNOUNCEMENTSConsumer Price Index (09:30)Producer Price Index (09:30)Retail Price Index (09:30)JH