Wednesday preview: Compass, Cineworld, BoE minutes

17th May 2011 17:59

Contract caterer Compass hopes to be turning up the heat with its interim results on Wednesday. Broker Charles Stanley forecasts pre-tax profits of £510m, up from £462m last year, and EPS of 20p, up from 18p at the interim stage in 2010. The broker has pencilled in 6p for the interim dividend, up from 5p last year."In the six months to March 2011, Compass Group's organic revenue growth has been about 5.5% and after the contribution from acquisitions, constant currency revenue growth will be about 9.5%," writes Charles Stanley investment analyst Tony Shepard. "Organic growth has been driven by good levels of new business across the group and a slight improvement in contract retention to 94%. In addition, Compass may deliver a 20 basis point improvement in the profit margin and underlying earnings per share is expected to increase by about 12%. Cash flow conversion remains in line with expectations," Shepard added.Cinema attendance levels often hold up well in a recession, as a trip to see a film can work out as a cheap evening if you avoid the expensive popcorn and other dubious delights of the cinema foyer, so Cineworld's interim management statement may be a more upbeat affair than updates from other companies dependent on discretionary spending.The first quarter statement will reflect the timing of the Easter week-end and the timing of the school holidays, both of which occurred in April this year rather than March, as was the case last year.Blockbusters have been a bit thin on the ground this year; the success of "The King's Speech" in the Oscars will have given a lift to that film's box office returns, but it is no one's idea of a blockbuster to rival the success of "Avatar", which was pulling in the punters big time in March of last year."According to the Cinema Exhibitors' Association, UK cinema admissions for March were down 24% year on year," notes Panmure Gordon, adding the aforementioned caveats about the timing of the Easter break this year. "The recent update from The Restaurant Group highlighted that footfall levels at cinema parks has been variable in recent weeks. However, we have not seen enough evidence to alter our view that cinema is a particularly resilient area of the leisure sector and, whilst discretionary expenditure levels remain a concern for UK customers, in our opinion, Cineworld should continue to perform well, given its focus on value-orientated offering, reinforced by its low average spend per head," the broker said.On the economic front, the main point of interest will be the release of the Bank of England interest rate setting meeting minutes. Speculation over whether more Monetary Policy Committee (MPC) members have defected to the rate-hike camp has died down of late, since March's inflation rate headed lower to 4.0%. It was back up to 4.5% in April, a bigger rise than expected, but probably not enough to have tempted more doves to move to the hawks' end of the MPC perch.Mervyn King, in his letter to the Chancellor, George Osborne, blamed stubbornly high inflation on the increase in the standard rate of VAT in January and higher energy and import prices, suggesting that he, for one, remains resolutely in the camp that is in favour of holding off on an interest rate rise. "The [Monetary Policy Committee] judges that attempting to bring inflation back to the target quickly risks generating undesirable volatility in output and would increase the chances of undershooting the target in the medium term," he wrote.INTERIMSCompass Group, Sanderson GroupINTERIM EX-DIVIDEND DATEBellway, Narborough Plantations, Noble Investments (UK), Titon Holdings, United Drug, WH SmithQUARTERLY EX-DIVIDEND DATECarnival, M Winkworth, MedicX Fund Ltd.INTERNATIONAL ECONOMIC ANNOUNCEMENTSTertiary Industry Index (JPN)Construction Output (EC) (10:00)MBA Mortgage Applications (US) (12:00)Crude Oil Inventories (US) (15:30)FOMC Interest Rate Minutes (US) (19:00)GMSStobart Group Ltd., Thor MiningFINALSBlinkx, C&C Group, Experian, Gable Holdings Inc., ICAP, Land Securities Group, UK Mail Group ANNUAL REPORTSurgical Innovations GroupIMSSWilmington GroupAGMSAIM Investments, Candover Investments, Cineworld Group, Commerzbank AG, CSR, Dragon Oil, Essar Energy , Fidelity European Values, Ingenious Entertainment VCT 1, Ingenious Entertainment VCT 1 'C' Shares, Ingenious Entertainment VCT 1 'D' Shares, Ingenious Entertainment VCT 1 E Shares, Ingenious Entertainment VCT 1 F Shares, Ingenious Entertainment VCT 2, Ingenious Entertainment VCT 2 'C' Shares, Ingenious Entertainment VCT 2 'D' Shares, Ingenious Entertainment VCT 2 E Shares, Ingenious Entertainment VCT 2 F Shares, Ingenious Live VCT 1, Ingenious Live VCT 2, Interserve, Irish Life & Permanent Group Holding, Jupiter Fund Management , Lloyds Banking Group, Mercantile Inv Trust, New Britain Palm Oil Ltd. (DI), Portmeirion Group, Resolution Ltd., StatPro Group, Tamar European Industrial Fund Ltd., W H Ireland GroupUK ECONOMIC ANNOUNCEMENTSBoE Interest Rate Minutes (09:30)Claimant Count Rate (09:30)Unemployment Rate (09:30)FINAL DIVIDEND PAYMENT DATEARM Holdings, Dairy Farm International Holdings Ltd. (Singapore), Fyffes, Hongkong Land Holding Ltd. (Singapore), Jardine Matheson Holdingd Ltd. (Singapore), Jardine Strategic Holdingd Ltd. (Singapore), Norsk Hydro ASA, Rathbone Brothers, Spirax-Sarco Engineering, St James's PlaceFINAL EX-DIVIDEND DATEAdmiral Group, Cookson Group, DCC, Derwent London, Dillistone Group, F&C Private Equity Trust, Fortune Oil, Home Retail Group, Inchcape, Morgan Crucible Co, ProVen Health VCT, Restaurant Group, Robinson, S & U, Sainsbury (J), Severfield-Rowen, Share Plc, SQS Software Quality Systems AG, Ukrproduct Group Ltd., Vertu MotorsQ1Eurasia Drilling Co Ltd. GDR (Reg S), New World Resources NV A Shares