Tuesday preview: Tesco, Burberry, Redrow

18th Apr 2011 18:07

Supermarket giant Tesco brings out results for the year to 27 February on Tuesday, the first set of results delivered by new boss Philip Clarke. Sam Hart, of broker Charles Stanley, thinks the company will make a profit before tax of £3.5bn, up from £3.18bn the year before, on sales of £62.5bn, up from £56.9bn.Earnings per share are tipped to grow to 32.5p from 29.2p while the broker thinks the full year dividend will be hiked to 14.5p from 13.1p."We very much regard Clarke as a 'continuity' appointment and, therefore, anticipate no radical changes to current group strategy," Hart says. "Tesco Bank is forecast to report a 12% rise in operating profit to £280m. An update on the launch schedule for mortgage and current account products is expected to be provided," Hart added. Barclays Capital (BarCap) thinks the focus will be as much on new boss Philip Clarke as on the figures on Tuesday. "In this vein, one major focus will be on management's plans for its real estate given that its current five-year plan to release up to £5bn from its property portfolio concludes this month," BarCap notes. "It is conceivable that management may likely announce a new round of property divestments. In this respect, we are keen to see whether further divestments, if any, will be expanded to include non-UK properties. Foremost too is how management plans to use the proceeds. Given that Tesco has little ratings headroom within its low-A ratings, Tesco's credit profile will be well-served if such proceeds are used to be reinvested in its business. Conversely, a shift to excessive shareholder returns will be a negative. On balance, we expect Tesco to lean towards a reinvestment in its business growth on the back of any further property divestments, which would in our view, be broadly credit neutral," BarCap continued.Fashion brand Burberry brings out a trading update covering the second half of its financial year, which runs until the end of March.The company had been on what looked like an unstoppable run until Japan, one of its major markets, was devastated on 11 March by the earthquake and subsequent tsunami. That tragic development is sure to have spoiled what otherwise was figuring to be another upbeat trading statement from the group.Nevertheless, Royal Bank of Scotland thinks the group will still report a "robust" performance though the rate of sales growth may have tailed off in 2011. It predicts an increase in wholesale revenues, excluding China, of around 15%.Housebuilder Redrow kicks off a spate of updates from the sector. Panmure Gordon expects a continuation of the group's statements regarding healthy trading."At Redrow, we expect that the group will report a continuation of its good start to H2. We are also interested in any comments from the business on the ability of securing mortgages (particularly for first time buyers) given Redrow has been one of the more forthright speakers in recent months. When the group last reported it commented that net reservations achieved during the first six weeks were 'comfortably ahead' YOY [year on year] against a backdrop of stable prices. The group commented it did not expect to see significant price deflation in the coming months, which is in line with our expectations," Panmure said.INTERIMSCharacter Group, Egdon Resources, Imperial Innovations GroupINTERIM DIVIDEND PAYMENT DATEInterior Services GroupINTERNATIONAL ECONOMIC ANNOUNCEMENTSConsumer Confidence (JPN)Machine Tool Orders (JPN)PMI Manufacturing Survey (FRA) (08.00)PMI Service Sector Survey (FRA) (08.00)PMI Manufacturing Sector (GER) (08:30)PMI Service Sector Survey (GER) (08:30)PMI Manufacturing Sector Survey (EU) (09:00)PMI Service Sector Survey (EU) (09:00)PMI Composite Index (EU) (09:00)Current Account (EU) (09:00)New Car Registrations (EU) (10:00)Construction Output (EU) (10:00)Building Permits (US) (13:30)Housing Starts (US) (13:30)GMSBank Pekao SA GDS (Reg S), Independent Media DistributionFINALSGLOBO, Hasgrove, Surgical Innovations Group, TescoIMSSNCC Group, Promethean World, Reed ElsevierEGMSEuropean Convergence Properties CoAGMSAtlantic Global, Bank Pekao SA GDS (Reg S), Cathay International Holdings Ltd., European Convergence Properties Co, Finansbank GDR (Reg S), Invesco Perpetual UK Small Companies Inv Trust, Management Consulting Group, Mediwatch, Promethean World, Royal Bank of Scotland Group, Symphony International Holdings Ltd.TRADING ANNOUNCEMENTSSABMiller---jh