Week Ahead: Oils, pharmas, Reckitt, Domino's

22nd Jul 2011 11:35

The half-year results season gets underway next week with a flood of updates from heavyweights, including some big players from the energy (BG, BP and Shell) and pharmaceuticals (Glaxo and Shire) sectors.Even Monday, normally one of the quietest days of the week for results, sees announcements from heavyweights such as Reckitt Benckiser and Domino's Pizza.Reckitt Benckiser is a perennial bid target, with the usual suspects - Unilever and Procter & Gamble - often touted as the companies keen to get their hands on Reckitt's well-known brands, which include Cillit Bang, Durex and Nurofen. The rumours seem to discount the size of Reckitt, a £25bn company, and the competition concerns that are likely to arise.Speculators are always looking to make a quick buck but the current management seems to be making a decent fist of exploiting the group's enviable portfolio of brands. Credit Suisse thinks the group's second quarter results will see a slowdown in year-on-year (yoy) organic growth to 3% from 4% in the first quarter. The Swiss bank reckons the operating margins will be up by one-fifth of a percentage point. "The group will also likely take the opportunity to shed some more light on its Pharma business," Credit Suisse reckons.Panmure Gordon is expecting growth outside of the Reckitt pharmaceuticals business to remain weak. "We expect LFL [like-for-like] sales growth of 4.9% to drive 13.3% total sales growth to £2.335bn, with net acquisitions (mainly SSL) adding c10% to sales, and currency 1% negative," Panmure Gordon said. "We forecast operating margins to decline 20bp [20 basis points, i.e. one-fifth of a percentage point] to 24.2%, although this largely reflects the dilutive effect on margins of the move to film sales in RBP [Reckitt Benckiser Pharmaceuticals], and ex-RBP we expect margins to be 40bp higher. We expect PBT [profit before tax] growth of 10% to £558m (consensus £565m) and EPS [earnings per share] up 7% to 55.3p (consensus 56.1p)," the broker continued.The broker thinks growth in developed markets to remain weak, with Europe flat and North America up 1% or so. "We don't expect Reckitt to report any material reduction in the heavy promotional activity in most developed markets," Panmure Gordon said.By common consent, the marketing expertise of Domino's Pizza is tremendous, and the operational side of the business is terrific; shame about the pizzas.Charles Stanley thinks the pizza delivery firm will announce half-year profits before tax of £19.4m, up from £17.5m at the interim stage last year. It sees earnings per share rising to 8.80p from 7.90p the year before, and the interim dividend rising to 5p from 4.50p last year."New product innovation such as "Get Stuffed" or general promotional activity like "Two for Tuesday" remain keenly used tactics for stimulating top line sales growth. Whilst the success of previous promotions may be dissected, any news pertaining to future marketing campaigns is unlikely to be disclosed at this meeting given the competitive nature of the business and peer group responses," Charles Stanley's James Dawson suggests. The company is likely to give an update on its progress towards a full-year target of 60 new stores. There may also be news on the group's incursion into Germany - the UK market being, like the company's pizzas, somewhat saturated. Credit Suisse notes that the company is going up against tough comparative figures. "Whilst the warm weather was a negative in April and May, we note a cooler June and new product launches (stuffed crust) could help offset this. We forecasts Q2 LfL sales of 1%, however, [we] acknowledge the risk they could be flat or negative," Credit Suisse said. The Swiss bank is going for half-year revenues of £97m, profit before tax of £20m and earnings per share of 8.8p. On the dividend front, Credit Suisse thinks the interim dividend will be bumped up to 5.5p.Singer Capital Markets predicts profit before tax of £19.2m and earnings per share of 8.7p. "We base this on an first half LFL sales assumption of +3% (which in turn implies only 1% LFL growth in quarter two), combined with increased overhead and commissary utilisation. We assume 19 store openings, the same as in the first half of 2010," Singer said."Whatever the precise numbers, there will be two important positive impacts from this H1 announcement: The point will be made that Domino's is now in a phase where earnings growth is a multiple of LFL growth; the Q2 comparative challenge will now be behind the company, giving way to less challenging H2 comparatives of 10%," Singer added.The broker thinks that the acceleration of Domino's like-for-like sales growth in 2010 may have been a one-off. "It may be that mid-single-digit LFL growth is more realistic, and the real question is why sales were actually so strong in 2010. That was really because of the triple positives of the World Cup, Britain's Got Talent, and Two For Tuesday," the broker reckons. Monday July 25INTERIMSAmino Technologies, Domino's Pizza UK & IRL, Reckitt Benckiser Group, Sagentia Group, Wolfson Microelectronics, WSP GroupQ2Wolfson MicroelectronicsGMSDominion Petroleum Ltd. (DI), ProvexisFINALSe-TherapeuticsIMSSHansen Transmissions International NV (DI), National GridEGMSBank Audi SAL- Audi Saradar Group GDR (Reg S), Equity Partnership Inv Co Income SharesAGMSAlbion Prime VCT, China New Energy Limited, Diamondcorp, ETF Securities ETFX S-Net ITG Global Agri Business Fund USD, HICL Infrastructure Company Ltd., Hogg Robinson Group, Medilink-Global UK Ltd., Merchant House Group, National Grid, Plastics Capital, Sepura, Volex GroupEUROPEAN ECONOMIC ANNOUNCEMENTSRetail Sales (GER) Chicago Fed National Activity Index (US) (13:30)Dallas Fed Manufacturing Activity (15:30)UK ECONOMIC ANNOUNCEMENTSBBA Mortgage Lending Figures (09:30)FINAL DIVIDEND PAYMENT DATEAurora Inv TrustTuesday July 26INTERIMSARM Holdings, BG Group, BP, Communisis, GlaxoSmithKline, Informa, Norsk Hydro ASAINTERNATIONAL ECONOMIC ANNOUNCEMENTSSmall Business Confidence (JPN)GfK Consumer Confidence (GER) (07:00)Consumer Confidence Indicator (FRA) (07:45)Consumer Confidence (US) (15:00)New Homes Sales (US) (15:00)Richmond Fed Manufacturing Index (US) (15:00)UK ECONOMIC ANNOUNCEMENTSGross Domestic Product Q2 (09:30)Q2ARM Holdings, BG Group, BP, GlaxoSmithKline, Norsk Hydro ASAQ4Aquarius Platinum Ltd.GMSPunch TavernsFINALSAdEPT Telecom, Ashley House, eXpansys, ITM Power, PZ Cussons, Sceptre LeisureANNUAL REPORTCSS StellarIMSSImperial Tobacco GroupAGMSAberdeen All Asia Inv Trust, CSS Stellar, Endace Ltd., Helical Bar, iPoint-Media, Nautilus Minerals Inc. (DI), New Century AIM VCT, Porta Communications , Scapa Group, TR Property Inv Trust, TR Property Inv Trust Sigma Shares, Viridas, Vodafone GroupFINAL DIVIDEND PAYMENT DATECupid, Vertu Motors, ViCTory VCTWednesday July 27INTERIMSAccess Intelligence, Autonomy Corporation, British American Tobacco, CSR, Dignity, ITV, Lancashire Holdings, Morgan Crucible Co, Provident Financial, Rathbone Brothers, Telekomunikacja Polska GDR (Reg S), Virgin Media Inc.INTERIM EX-DIVIDEND DATEBritish Portfolio Trust, Fenner, Ludgate Environmental Fund Ltd., Matrix European Real Estate Inv Trust Ltd., MicrogenQUARTERLY PAYMENT DATEDow Chemical CoQUARTERLY EX-DIVIDEND DATECity of London Inv Trust, Premier Energy & Water TrustINTERNATIONAL ECONOMIC ANNOUNCEMENTSM3 Money Supply (EU) (09:00)Consumer Prices (GER)Import Prices (GER)MBA Mortgage Applications (US) (12:00)Durable Goods Orders (US) (13:30)Crude Oil Inventories (US) (15:30)Beige Book Fed Survey (US) (19:00)Q2Autonomy Corporation, CSR, Lancashire Holdings, Virgin Media Inc.GMSAstaire Group, Promethean WorldFINALSAvisen, Renishaw, Scientific Digital ImagingIMSSBrewin Dolphin Holdings, Marston's, Sage Group, Titon HoldingsSPECIAL EX-DIVIDEND PAYMENT DATESt Peter Port Capital Ltd.AGMSAPI Group, Argo Real Estate Opportunities Fund, Blacks Leisure Group, Carphone Warehouse Group, E2V Technologies, Evolve Capital, Ncondezi Coal Co Ltd. (DI), Northumbrian Water Finance 6% Gtd Bds 11/10/17 £ (VAR)(BR), Subex Ltd. GDR (Reg S), Synergy Health, Tinci Holdings Ltd. (DI), TyraTech Inc. (Reg S), Vedanta Resources, Ventus 2 VCT, Ventus VCT, Ventus VCT 'C' SharesTRADING ANNOUNCEMENTSCarphone Warehouse GroupUK ECONOMIC ANNOUNCEMENTSCBI Industrial Trends Surveys (11:00)FINAL DIVIDEND PAYMENT DATEBraemar Shipping Services, Hargreave Hale AIM VCT 2, Martin Currie Pacific Trust, Rensburg AIM VCT, Templeton Emerging Markets Inv TrustFINAL EX-DIVIDEND DATEHeath (Samuel) & Sons, Investec, London Stock Exchange Group, Scottish & Southern Energy, St Peter Port Capital Ltd., Volex GroupQ1Gail (India) Ltd. GDR (Reg S), Yell GroupThursday July 28INTERIMSAstraZeneca, BAE Systems, Centrica, Croda International, Dairy Farm International Holdings Ltd. (Singapore), Hongkong Land Holding Ltd. (Singapore), Inchcape, Jarvis Securities, Laird, Mandarin Oriental International (Singapore), Mondi, National Express Group, Promethean World, ProPhotonix (Reg S), Rank Group, Reed Elsevier, Rolls-Royce Group, Royal Dutch Shell 'A', Royal Dutch Shell 'B', RPS Group, Shire Plc, Telefonica SAINTERNATIONAL ECONOMIC ANNOUNCEMENTSRetail Sales (JPN)PMI Retail (GER) (08:55)Unemployment Rate (GER) (08:55)PMI Retail (EU) (09:00)Business Climate Indicator (EU) (10:00)Economic Sentiment Indicator (EU) (10:00)Continuing Claims (US) (13:30)Initial Jobless Claims (US) (13:30)Bloomberg Consumer Confidence (US) (14:45)Pending Homes Sales (US) (15:00)Q2AstraZeneca, Coca-Cola HBC S.A., Kazakhmys, Royal Dutch Shell 'A', Royal Dutch Shell 'B', Shire PlcGMSSynchronicaFINALSMisysIMSSCompass Group, Halma, InvensysAGMSAcal, Caffyns, Connemara Mining Co, Dee Valley Group, Elektron, EPE Special Opportunities, F&C Global Smaller Companies, Framlington AIM VCT 2, Halma, Invensys, Kewill, Northumbrian Water Group, Opsec Security Group, Pennon Group, Phoenix IT Group, Record, RENN Universal Growth Investment Trust, RIT Capital Partners, VSA Capital Group, Workspace GroupUK ECONOMIC ANNOUNCEMENTSCBI Distributive Trades Surveys (11:00)FINAL DIVIDEND PAYMENT DATEBrulines Group, Caffyns, Helical Bar, Land Securities Group, MDM Engineering Group Ltd. (DI), Petropavlovsk, Printing.comQ1BT GroupFriday July 29INTERIMSAnglo American, Charter International, International Airlines, Jardine Matheson Holdings Ltd (Singapore), Jardine Strategic Holdingd Ltd. (Singapore), Manganese Bronze Holdings, Pearson, Rentokil Initial, Travis PerkinsINTERIM DIVIDEND PAYMENT DATECharacter Group, Chrysalis VCT, Dunedin Smaller Companies Inv Trust, Jupiter Green Inv Trust, Octopus Titan VCT 1, Octopus Titan VCT 2, Paragon Group Of Companies, ProVen Growth & Income VCT, ProVen VCT, ZytronicQUARTERLY PAYMENT DATEEquity Partnership Inv Co Income Shares, Schroder Income Growth FundINTERNATIONAL ECONOMIC ANNOUNCEMENTSHousehold Spending (JPN)Jobless Rate (JPN)Consumer Prices Index (JPN)Industrial Production (JPN)Construction Orders (JPN)GFK Consumer Confidence (GER) (07:00)Producer Prices (FRA) (07:45)Consumer Spending (FRA) (07:45)Consumer Prices estimate (EU) (10:00)International Reserves (EU) (11:00)GDP (Advance) (US) (13:30)Personal Consumption (US) (13:30)Chicago PMI (US) (14:45)NAPM Milwaukee (US) (15:00)U. of Michigan Confidence(Final) (US) (15:00)GMSINVUFINALSBritish Sky Broadcasting GroupEGMSNoventa Ltd.AGMSBritish Smaller Companies VCT, Creon Corporation, Edinburgh Inv Trust, European Convergence Development Co, Fidelity China Special Situations , Homeserve, ING Global Real Estate Securities Ltd., INVU, Longships, Parallel Media Group, RAM Investment Group, Suretrack Monitoring , Tongaat-Hulett Ltd., TorotrakUK ECONOMIC ANNOUNCEMENTSGFK Consumer Confidence (09:30)Net Consumer Credit (09:30)M4 Money Supply (09:30)Mortgage Approvals (09:30)FINAL DIVIDEND PAYMENT DATEAberdeen All Asia Inv Trust, Acal, Aveva Group, Brown (N.) Group, Edinburgh Inv Trust, Investec Structured Products Calculus VCT, KCOM Group, Kiotech International, Lindsell Train Inv Trust, Montanaro European Smaller Companies Trust, MS International, Octopus VCT , PME African Infrastructure Opportunities, Puma VCT V, Severn Trent, TP70 2008 (I) VCT, TP70 2008 (II) VCT, UBC Media Group