Wednesday preview: Experian, ICAP, BoE minutes

16th Nov 2010 18:36

Credit checking specialist Experian is set to deliver a solid set of first half results, according to broker Charles Stanley, which reckons pre-tax profit will edge up to $440m from $430m last year.For the first half Experian is targeting mid single-digit organic revenue growth and earnings before interest and tax (EBIT) growth from continuing activities."Going forward, the performance of Credit Services within the North American and UK divisions will be a key driver of sentiment. Although the comparatives are weak, there has been some improvement in North American Credit Services. Within Credit Services, Experian is growing in other vertical markets such as telecommunication, automotive, health and utilities. We expect North American Credit Services to return to growth in the second half and for the UK to show some improvement," Charles Stanley said. Business publisher Informa puts out an interim management statement on Wednesday, and the read across from sector peers UBM, Euromoney and Daily Mail & General Trust suggests the tone should be upbeat. "We expect Informa to be benefitting from similar trends and are more confident of a successful science journal subscription renewal season than in the prior year, which we saw as the key test of the normally high resilience," said Singer Capital Markets. "Given industry trading trends, our modest assumptions and Informa's conservative guidance we see upside potential to forecasts across all the divisions/activities," the broker added. KBC Peel Hunt, meanwhile, focuses on the group's Academic Information division, which may be under a cloud as a result of cuts to UK university budgets."We have set out a range of scenarios ... that show that (on paper) a 10%-30% drop in UK Academic revenues produces a corresponding 2.1%-6.6% fall in underlying earnings per share (EPS). However, in practice we believe in the robustness of the Informa model and its ability to absorb these revenue dips without sacrificing EPS. We therefore see any stock price weakness around the IMS as a buying opportunity," the broker said. "Based on commentary from others in the sector, we anticipate that events markets and other subscription revenue areas have been resilient as late-cycle effects wash through the B2B [business to business] sub-sector," Peel Hunt added. Inter-dealer broker ICAP has probably been enjoying the market volatility experienced this week though it has come way too late to affect the company's interim results, due to be unveiled on Wednesday. "This year ICAP is focusing on growing the business organically," Charles Stanley notes. "Over the first six month period as a whole, revenue was driven by robust performances in the volatile interest rate and foreign exchange markets and continuing strength in the commodities and emerging markets businesses. However, following a good start to the year, credit markets have been quieter but a considerable issuance backlog has developed that may boost corporate bond activity in the second half. The equity derivatives businesses have been adversely affected by low cash volumes and reduced risk appetite," the broker added.Charles Stanley has pencilled in £186m for profit before tax at 14.7p for EPS. It predicts an interim dividend of 5.11p.After a period of strong expansion baby clothes and children's toy retailer Mothercare seems to have lost its way somewhat, with the shares down almost 20% over the last year.KBC Peel Hunt thinks Wednesday's interims will reveal a year on year fall of around 15% in UK earnings before interest and tax, "although we forecast this to be more than offset by the increase in contribution from international expansion."Fashion group Ted Baker is tipped by Panmure Gordon to show group sales growth of around 11-12%, year on year, for the third quarter. The broker is not sure the retailer will disclose gross margin information but if it does so Panmure Gordon is expecting there to have been some improvement on this score."It is worth bearing in mind the fact that trading in both divisions in the last nine weeks of H1 2011A [first half of fiscal 2011], reported in early October, had slowed, ... so that we approach Wednesday's statement with a little caution," the broker observed.Film distributor Entertainment One's September trading update indicated that the film release slate for the rest of the year is strong, but with much of the product kept in reserve for the Christmas period it may still be too early to tell how well the company is likely to do.Singer Capital Markets thinks the company will strike a cautious tone in Wednesday's interim results and maintain full year earnings guidance. "Both Film and TV units look capable of delivering a positive surprise and the valuation is still not discounting the strong growth we currently forecast, suggesting the shares have significant further upside," the broker reckons.SIG, the insulation materials and specialist construction products maker, issues a third quarter management statement covering the third quarter. Panmure Gordon thinks that while market conditions have remained challenging, there is some evidence of stabilisation patterns beginning to emerge. "SIG is more exposed, through the commercial sector, to later cycle trends, so will have lagged its peers," the broker adds.The key issues, the broker reckons, will be market demand following the government's comprehensive spending review; signs of the commercial sector picking up, and the company's working capital and cash management. On the economic front, the release on Wednesday of the minutes from the November meeting of the Bank of England's Monetary Policy Committee (MPC) will be more keenly awaited than most MPC minutes releases over the last two years. At the October meeting there was a three-way split, with Andrew Sentance reiterating his call for a quarter point hike in the Bank's key lending rate to 0.75%, while Adam Posen voted for an easing in monetary policy by means of a £50bn increase to the quantitative easing (QE) programme.Messrs. Posen and Sentance are likely to have voted the same way in November, but the key element of interest will be whether any MPC members have moved into either of their camps. After the recent release of the Bank of England's Quarterly Inflation Report the Bank's governor, Mervyn King, conceded that there had been some "vigorous debate" among MPC members about the state of the UK economy. The MPC in its November meeting "stood ready to respond in either direction as the balance of risks evolved," a statement from the Bank said after the inflation report was released, with the outlook for growth described as "highly uncertain".INTERIMSEntertainment One Ltd. (DI), Experian, ICAP, Metric Property Investments , Speedy HireINTERIM DIVIDEND PAYMENT DATEAviva, Centrica, Scisys, Total SAINTERIM EX-DIVIDEND DATEAndrews Sykes Group, Braemar Shipping Services, Charles Stanley Group, DCC, Great Portland Estates, HSBC Infrastructure Company Ltd., London Security, Marks & Spencer Group, Norcon, Printing.com, Sainsbury (J), Scottish Mortgage Inv Trust, Straight, Vodafone Group, Wynnstay PropertiesQUARTERLY EX-DIVIDEND DATECanaccord Financial Inc., Carnival, Henderson Financial Opportunities Ltd., M WinkworthINTERNATIONAL ECONOMIC ANNOUNCEMENTSConstruction Output (EC) (10:00)MBA Mortgage Applications (US) (12:00)Building Permits (US) (13:30)Consumer Price Index(US) (13:30)Housing Starts (US) (13:30)Crude Oil Inventories (US) (15:30)Q3MirLand Development Corp.GMSDimension Data Holdings, Plantic Technologies Ltd. (DI)FINALSBarloworld Ltd., Dimension Data Holdings, United DrugIMSSCentaur Media, Centrica, Informa, Paddy Power, SIG, Ted BakerSPECIAL EX-DIVIDEND PAYMENT DATEEdinburgh Inv Trust, Narborough PlantationsEGMSAbbey, Ruukki Group (DI)AGMSBarratt Developments, Centaur Media, Coal of Africa Ltd., Medusa Mining Ltd. (DI), New Star Inv TrustUK ECONOMIC ANNOUNCEMENTSBoE Interest Rate Minutes (09:30)Claimant Count Rate (09:30)Unemployment Rate (09:30)FINAL DIVIDEND PAYMENT DATEHargreaves ServicesFINAL EX-DIVIDEND DATECPL Resources, Euromoney Institutional Investor, Fidelity Special Values, Keystone Inv Trust, Lok'n Store Group, Tristel