Week Ahead: BoE notes, Kingfisher, Capita

15th Jul 2011 12:22

Wednesday sees the release of the minutes of the most recent minutes of the Bank of England's Monetary Policy Committee (MPC) and though it is assumed that voting on interest rate policy has become a bit of a non-event, Dr. Howard Archer, the seemingly omnipresent economist of forecasting agency IHS Global Insight, thinks the idea of a resumption of the Quantitative Easing (QE) programme to try to boost the spluttering economy could be gaining support."The stock of Quantitative Easing has been unchanged at £200 billion since February 2010; and, until recently, there had seemed little likelihood that the Bank of England could relax monetary policy further by engaging in more Quantitative Easing even though one MPC member, Adam Posen, has been repeatedly voting for a £50 billion rise to £250 billion," Dr. Archer writes."Indeed, until the last few weeks, attention had focused exclusively on when the Bank of England would start to tighten monetary policy through raising interest rates from the current record low level of 0.50% ... However, a recent extended series of weak data and surveys has significantly heightened concerns over the health of the economy and its ability to withstand the increasing fiscal squeeze," he added. On the corporate front, Dr. Archer's "fiscal squeeze" may well have been a factor on the recent trading of do-it-yourself retailer Kingfisher, at least in the UK; the company's French operations may have had an easier time of it."We expect UK LFL [like-for-like] sales at B&Q to be down strongly in the second quarter, given seasonal sales pull forward, poor weather, a clearance event at Focus following administration and a tough underlying environment. However, with 30 Focus stores set to be converted to B&Qs by the fourth quarter and many others exiting the market, fiscal 2012/13 may see a strong uplift for the group and more than offset short-term weakness," according to Nomura Securities."Despite a top-line slowdown in France in the second quarter relative to the first, we continue to expect positive LFL sales trends. Gross margin initiatives, such as direct sourcing and common product, continue to flow through, while a favourable sterling/euro exchange rate should help offset UK weakness," the Japanese broker added.There is no shortage of brokers willing to pontificate on the half-year results of outsourcing giant Capita. Panmure Gordon thinks the firm will rack up revenues of £1,388.7m, up from £1,361.1m last year, implying a 2% growth rate. All of this and more will have been driven by acquisitions, however, in Panmure Gordon's view. On a like-for-like basis, the broker thinks revenues will be down by 3%, as previously indicated by the company."In adjusted PBT [profit before tax] terms we are forecasting £174.2m vs. £163.1m last year, which reflects higher margins of 13.65% vs. 13.11% last year. Consensus is currently £1442.7m for revenues and £176.8m for PBT. If our forecasts are achieved it would imply EPS of 21.4p (consensus 21.95p), which is 11% ahead of the 19.4p delivered last year. We have pencilled in an interim dividend of 7.3p (consensus 7.1p) vs. 6.6p paid last year," Panmure Gordon added.Charles Stanley is forecasting profit before tax of £172m and an interim dividend of 7.2p. "Clearly, the interim results will show some revenue growth due to acquisitions but organic growth is likely to be mildly negative due to the earlier lull in the order flow. Some recent awards may help to improve sentiment but further contracts in the second half are needed to secure the outlook for 2012, in our opinion," Charles Stanley analyst Tony Shepard said.Shore Capital is of a similar view. "Interim results are likely to show that the negative organic growth rate running at 5% through fiscal 2010 has only moderated to c3% in the first half of fiscal 2011 with growth returning only in the fourth quarter of the current year. We estimate top line growth for the half-year period at c5%, driven solely by acquisitions totalling some £475m over the past 18 months, these add some £534m to our revenue forecast for fiscal 2011."Shore Capital forecasts revenues of £1.425bn with adjusted PBT of c£178m (up9%) and earnings per share of 21.0p (up c8%). It forecasts net debt at June 2010 to be around £1.03bn.Monday July 18INTERNTIONAL ECONOMIC ANNOUNCEMENTSDepartment Store Sales (JPN) NAHB (US)UK ECONOMIC ANNOUNCEMENTSRightmove House PricesNationwide Consumer ConfidenceINTERIMSSThreeQUARTERLY EX-DIVIDEND DATECaterpillar Inc.FINALSCSF GroupANNUAL REPORTDixons Retail AGMSAurora Inv Trust, Big Yellow Group, NewRiver Retail Ltd. (Reg S)TRADING ANNOUNCEMENTSLavendon GroupFINAL DIVIDEND PAYMENT DATEBATM Advanced Communications Ltd.Tuesday July 19INTERNATIONAL ECONOMIC ANNOUNCEMENTSZEW Survey (EU) (10:00)ZEW Survey (GER) (10:00)Construction Output (10:00)Building Permits (US) (13:30)Housing Starts (US) (13:30)FINALSIG Group Holdings, Scientific Digital ImagingIMSSLand Securities Group, OptosAGMSAqua Bounty Technologies Inc. (Reg S), Downing Planned Exit VCT 6, Downing Planned Exit VCT 6 'A' Shares, Downing Planned Exit VCT 7, Downing Planned Exit VCT 7 'A' Shares, FFastFill, Intermediate Capital Group, Johnson Matthey, JPMorgan European Inv Trust Growth Shares, Perpetual Income & Growth Inv Trust, PME African Infrastructure Opportunities, Securities Trust of ScotlandFINAL DIVIDEND PAYMENT DATEAlbany Inv Trust, Man GroupQ1Ashok Leyland Ltd. GDR (Reg S)Wednesday July 20INTERIM EX-DIVIDEND DATECharter European Trust, Heavitree Brewery, Imperial Tobacco Group, Sanderson Group, THB GroupQUARTERLY EX-DIVIDEND DATEEquity Partnership Inv Co Income SharesINTERNATIONAL ECONOMIC ANNOUNCEMENTSConvenience Store Sales (JPN)Producer Price Index (GER) (07:00)Consumer Confidence Indicator (EU) (10:00)MBA Mortgage Applications (US) (12:00)Crude Oil Inventories (US) (15:30)Existing Home Sales (US) (15:00)FINALSAEA Technology Group, ZetarIMSSSevern TrentSPECIAL EX-DIVIDEND PAYMENT DATEBritish Smaller Companies VCT, iEnergizer Ltd.EGMSIrish Life & Permanent Group HoldingAGMSB.P. Marsh & Partners, Bedford Row VCT, BTG, Chariot Oil & Gas Ltd., Digital Barriers, Experian, Fitbug Holdings, Investment Company, IQE, Maven Income & Growth VCT, Renold, Rensburg AIM VCT, Severn TrentTRADING ANNOUNCEMENTSGlanbia, Playtech Ltd.UK ECONOMIC ANNOUNCEMENTSBoE Interest Rate Minutes (09:30)Trends in Lending (09:30)FINAL DIVIDEND PAYMENT DATEBig Yellow Group, Hasgrove, Home Retail Group, NewRiver Retail Ltd. (Reg S)FINAL EX-DIVIDEND DATEBritish Smaller Companies VCT, Castings, Fidelity China Special Situations , Halma, ICAP, Kewill, Mulberry Group, PME African Infrastructure OpportunitiesThursday July 21INTERIMSCapita Group, Howden Joinery Group, MicrogenINTERIM DIVIDEND PAYMENT DATEEdinburgh Worldwide Inv Trust, Euromoney Institutional InvestorINTERNATIONAL ECONOMIC ANNOUNCEMENTSPMI Manufacturing Survey (FRA) (08:00)PMI Service Sector Survey (FRA) (08:00)PMI Manufacturing Survey (GER) (08:30)PMI Service Sector Survey (GER) (08:30)PMI Manufacturing Survey (EC) (09:00)PMI Service Sector Survey (EC) (09:00)PMI Composite Index (EC) (09:00)Current Account (EU) (09:00)Initial Jobless Claims (US) (13:30)Continuing Claims (US) (13:30)Bloomberg Consumer Confidence (US) (14:45)Leading Indicators (US) (15:00)Philadelphia Fed Index (US) (15:00)GMSMedia Square, WincantonFINALSEredene CapitalIMSSGreat Portland Estates, Mitchells & ButlersAGMSAlbion Enterprise VCT, Athol Gold Ltd. (DI), Byotrol, Cable & Wireless Worldwide, Caledonia Investments, Coastal Energy Co (DI), De La Rue, Mckay Securities, Media Square, Personal Assets Trust, RAB Special Situations Company Ltd. (Reg S), SABMiller, Scottish & Southern Energy, Shanks Group, Vertu Motors, WincantonTRADING ANNOUNCEMENTSHilton Food Group, Kingfisher, SABMillerUK ECONOMIC ANNOUNCEMENTSPublic Sector Finances (09:30)Retail Sales (09:30)FINAL DIVIDEND PAYMENT DATEBritish Polythene Industries, DCC, Hamworthy, Nature Group, Tongaat-Hulett Ltd.Friday July 22INTERIMSBeazleyQUARTERLY PAYMENT DATEPersonal Assets Trust, Real Estate Credit Investments Ltd.INTERNATIONAL ECONOMIC ANNOUNCEMENTSSupermarket Sales (JPN)Company Production Outlook (FRA) (07:45)Business Confidence Outlook (FRA) (07:45)IFO Business Climate (GER) (09:00)IFO Current Assessment (GER) (09:00)IFO Expectations (GER) (09:00)Industrial New Orders (EU) (10:00)IMSSCable & Wireless Communications, United Utilities Group, Vodafone GroupAGMSBellzone Mining, Cable & Wireless Communications, East Balkan Properties, Hargreave Hale AIM VCT 2, JPMorgan Japan Smaller Companies Trust, KCOM Group, MobilityOne Ltd., Regal Petroleum, Strategic Natural Resources, United Utilities Group, Vectura GroupTRADING ANNOUNCEMENTSClose Brothers GroupFINAL DIVIDEND PAYMENT DATEDowning Planned Exit VCT 6, Downing Planned Exit VCT 7, Electrocomponents, Investment Company, Maven Income & Growth VCT, Melrose Resources, Northern 2 VCT, Northern Investors Co, PayPoint, Telford Homes, Tex Holdings, UK Mail Group , Walker Crips Group, Wynnstay Properties