Tuesday preview: Whitbread, Capital Pub

20th Jun 2011 16:35

Whitbread did relatively well during the credit crunch era, with hotel users trading down to its Premier Inns and coffee addicts finding themselves unable to give up the Costa Coffee habit, but since the company's full year results at the end of April, investors have turned sour on the company, as the figures were accompanied by a cautious appraisal of the outlook for trading for the rest of this year.Credit Suisse, for one, responded by slashing its price target for the stock from 2,230p to 1,992p, though it stuck with its "outperform" rating. The broker also cut its full year earnings per share forecasts by 6% and 9% for 2012 and 2013, respectively.Panmure Gordon thinks Tuesday's interim management statement could trigger further downward revisions of forecasts."We forecast the group will report +1.8% LFL [like-for-like] sales growth in Q1 (Premier Inn +1.5%, Restaurants +2.5% and Costa +2.0%) but this is not enough to prompt a rerating of a stock trading on a current year 2011E P/E [price/earnings ratio] of 12.1x," Panmure Gordon said.Results from The Capital Pub Company will be garnering more attention than usual after it emerged last week that its bigger rival in the pub-ownership game, Fuller, Smith & Turner - or just "Fuller's", to most real ale drinkers - had made two bid approaches for the London based company, both of which were rebuffed.The second of these was at 200p a share which, for a company with shares trading in the 150s prior to the news of the bid approaches, means the Capital management must be confident they are on to a good thing with their current business.The market is expecting the pubs group to move firmly into the black, with pre-tax profit of £4.0m in the year to end-March, compared to a loss of £1.5m last year. Sales are expected to shoot up to £27.2m from £22.0m.Aside from the premium price being offered, Fuller's argument is that Capital's growth strategy is likely to require further equity assistance. "Fuller's considers that there are considerable risks associated with the successful execution of this strategy that could dilute the overall quality and attractiveness of Capital's estate and which could have a negative impact on valuation over time," Fuller's said.INTERIMSDomino Printing SciencesINTERIM DIVIDEND PAYMENT DATEMatchtech GroupINTERNATIONAL ECONOMIC ANNOUNCEMENTSZEW Survey (EU) (10:00)ZEW Survey (GER) (10:00)Existing Home Sales (US) (15:00)UK ECONOMIC ANNOUNCEMENTSPublic Sector Finances (09:30)CBI Industrial Trends Surveys (11:00)GMSAlpha Bank GDR (Reg S) USD, Image Scan Holdings, IP GroupFINALSAssura Group Ltd., Capital Pub Company, Creston, First Property Group, Halma, HML Holdings, RPC GroupIMSSWhitbreadEGMSElephant CapitalAGMSAlpha Bank GDR (Reg S) USD, Crosby Asset Management Inc., EIH Plc, Hambledon Mining, JSC OGK-2 GDR (Reg S), Medicsight, MMC Norilsk Nickel ADR, Oracle Coalfields, Tiger Resource Finance, Tower Resources, Toye & Co, Volvere, WhitbreadFINAL DIVIDEND PAYMENT DATEBlackRock Smaller Companies Trust, Capital Shopping Centres Group, Dillistone Group, Hiscox Ltd., Martin Currie Portfolio Inv Trust, Provident Financial, Share Plc--jh