Week Ahead: Sainsbury, HSBC, BoE base rate

4th May 2012 12:10

Results from Sainsbury on Wednesday may give some pointers whether sector leader Tesco is finally rousing from its slumbers in the UK.Results from Morrisons in the first week of May showed the supermarket chain suffering its first year-on-year fall in like-for-like (LFL) sales since the time it bit off more than it could chew buying Safeway, and the company suggested that this was because rivals (no names, but they probably meant Tesco) had stepped up their money-off coupon promotions in the first quarter.Tesco's muscle-flexing will not have gone unnoticed by Sainsbury, and it will be interesting to see how well it responded to it.Broker Jefferies thinks Sainsbury's full year results should show "solid" 6% growth in earnings before interest and tax, "but with close to £1.4bn of gross capex [capital expenditure] leading to net debt increasing to over £2bn."The broker expressed the hope that "with returns still amply trailing those of peers, the group may follow Tesco's lead in reducing expansionary capex (and reinforce yield credentials)."The market is expecting profit before tax of £711.9m on sales of £22,545m.Operating margin is forecast to be broadly flat at 3.5%, held back by an increased sales mix of low margin petrol, reckons broker Charles Stanley. "Future dividend policy is expected to be clarified. Current policy is to maintain dividend cover [earnings per share/dividend per share] in the 1.5-1.75x range," notes Charles Stanley. "Accelerated investment in new space means the current dividend payout is not being covered by free cash flow, leading to rising net debt. In our opinion, however, all balance sheet ratios remain sound and we believe the group has the ability to support a moderately higher level of net debt," the broker suggests.The market is expecting a full year dividend of 15.7p, but Charles Stanley is going for a smaller divi of 15.1p. "The level of capex is also expected to moderate over the coming years, meaning the dividend should once again be covered by free cash flow. Our base case assumption is that dividend policy will remain broadly unchanged, although we would not rule out the possibility that the dividend cover target is raised to 2.0x, leading to dividend growth lagging EPS growth over the near / medium term," Charles Stanley speculates.HSBC brings the banking results season to an end on Tuesday with first quarter results."We expect the group to post a profit per share of $0.20 this quarter with revenues up 7% QoQ [quarter on quarter] (+5% YoY [year on year]) mainly driven bynon-interest income as a result of stronger revenues in GBM [Global Banking and Markets]," broker Credit Suisse said.The broker will be looking to see if the improvement seen at the troublesome Household (HFC) unit seen towards the end of the last year is confirmed, especially after the increase in provisions in the third quarter, which caught the market by surprise. "We expect the impairment charge at HFC to be $1.3bn in Q1 2012 compared to the $1.4bn reported in Q4 2011 and $2.3bn in Q3 2011," Jefferies said.Credit Suisse is tipping first quarter profit before tax of $5,214m, headline earnings per share of 20 cents and a dividend of 10 cents. On Thursday, the Bank of England Monetary Policy Committee (MPC) is set to announce its base rate decision and any changes to its asset purchase programme. The market is not expecting the MPC to make any changes to either.Monday May 07INTERNATIONAL ECONOMIC ANNOUNCEMENTSConsumer Credit (US) (20:00)Harmonised Competitiveness Indicators (EU) (09:00)PMI Construction (GER) (08:55)FINALSBeximco Pharmaceuticals Ltd. GDR (Reg S)FINAL DIVIDEND PAYMENT DATEFBD HoldingsTuesday May 08INTERIM DIVIDEND PAYMENT DATEBegbies Traynor Group, GETECH Group, Photo-Me International, Thorpe (F.W.)QUARTERLY EX-DIVIDEND DATEIBM Corp.INTERNATIONAL ECONOMIC ANNOUNCEMENTSIndustrial Production (GER) (11:00)FINALSChagala Group Ltd. GDR (Reg S)ANNUAL REPORTEvrazIMSSHansard Global, Hiscox Ltd.EGMSAlpha Bank GDR (Reg S) USDAGMSBiotech Growth Trust (The), Gresham Computing, Macfarlane Group, Morgan Crucible Co, Norsk Hydro ASA, St James's Place, Vitec Group, Weir Group, William HillUK ECONOMIC ANNOUNCEMENTSBRC Shop Price Index (00:00)RICS Housing Market Survey (09:30)FINAL DIVIDEND PAYMENT DATEFirst Quantum Minerals Ltd., Goals Soccer Centres, JPMorgan American Inv Trust, Phoenix Group Holdings (DI)Q1Bank of Georgia Holdings, Petroleum Geo Services ASA, PostNL NVWednesday May 09INTERIMSeasyJet, Sage Group, United DrugINTERIM DIVIDEND PAYMENT DATESt IvesINTERIM EX-DIVIDEND DATEAberdeen Asset Management, Henderson Fledgling Trust , Matrix Income & Growth 4 VCT, Numis Corporation, Redefine International, Smart (J) & Co., Smiths News, Spirit Pub CompanyQUARTERLY PAYMENT DATEBritish Land CoQUARTERLY EX-DIVIDEND DATEBP, GlaxoSmithKline, Royal Dutch Shell 'A', Royal Dutch Shell 'B', UnileverINTERNATIONAL ECONOMIC ANNOUNCEMENTSBalance of Trade (GER) (07:00)Crude Oil Inventories (US) (15:30)Current Account (GER) (07:00)Factory Orders (GER) (11:00)MBA Mortgage Applications (US) (12:00)Retail Price Index (GER) (07:00)Wholesales Inventories (US) (15:00)FINALSSainsbury (J)IMSSCRH, Glencore International, Resolution Ltd.SPECIAL EX-DIVIDEND PAYMENT DATEAntofagastaEGMSMatra PetroleumAGMSBrady Exploration, Brady Exploration, Chime Communications, Costain Group, CRH, Dairy Farm International Holdings Ltd. (Singapore), Downing Planned Exit VCT 2011 (General A Shares), Downing Planned Exit VCT 2011 (General Shares), Downing Planned Exit VCT 2011 (Low Carbon Shares), Downing Planned Exit VCT 2011 (Structured A Shares), Downing Planned Exit VCT 2011 (Structured Shares), European Assets Trust NV (Regd), First Quantum Minerals Ltd., Futura Medical, Glanbia, Glencore International, Go Plc GDR (Reg S), Hygea VCT, Imagelinx, ITV, KBC Advanced Technologies, Melrose, Merchants Trust, Mithras Inv Trust, MyCelx Technologies Corporation (Reg S), Orogen Gold, Rightmove, Savills, Standard Chartered, UnileverUK ECONOMIC ANNOUNCEMENTSBRC Sales Monitor (00:00)FINAL DIVIDEND PAYMENT DATE4Imprint Group, Acencia Debt Strategies Ltd., Dialight, Novae Group, Quadnetics Group, Smith & NephewFINAL EX-DIVIDEND DATEAntofagasta, Avocet Mining, Bilfinger Berger Global Infrastructure Sicav S.A.(DI), Bunzl, Bwin.party Digital Entertainment, Cape, CSR, G4S, GVC Holdings, H&T Group, Hiscox Ltd., IS Solutions, Lighthouse Group, Macfarlane Group, Matrix Income & Growth VCT, Maven Income & Growth 3 VCT, Maven Income & Growth 4 VCT, Maven Income & Growth 4 VCT 'S' Shares, Neptune-Calculus Income & Growth VCT, Octopus Second AIM VCT, Persimmon, Randgold Resources Ltd., Rexam, Rightmove, Ted BakerQ1InmarsatThursday May 10INTERIM DIVIDEND PAYMENT DATENorthamber, Octopus Eclipse VCT 1, Octopus Eclipse VCT 3, Octopus Eclipse VCT 4INTERNATIONAL ECONOMIC ANNOUNCEMENTSBalance of Trade (US) (13:30)Bloomberg Consumer Confidence (US) (14:45)Continuing Claims (US) (13:30)ECB Report (EU) (09:00)Import and Export Price Indexes (US) (13:30)Initial Jobless Claims (US) (13:30)Treasury Budget Statement (US) (19:00)FINALSExperian, Tissue Regenix Group, Tissue Regenix GroupIMSSAlpha UK Multi Property Trust, Beazley, Eurasian Natural Resources Corp., Inchcape, Old Mutual, Rank Group, Rathbone Brothers, Trinity Mirror, Wood Group (John)SPECIAL DIVIDEND PAYMENT DATEOctopus Eclipse VCT 1, Octopus Eclipse VCT 3, Octopus Eclipse VCT 4AGMSAegis Group, Anglogold Ashanti Ltd., Balfour Beatty, Catlin Group Ltd., Cenkos Securities, Delcam, HGCapital Trust, Highcroft Investment, Highcroft Investment, Inchcape, Jardine Matheson Holdings Ltd (Singapore), Jardine Strategic Holdingd Ltd. (Singapore), Mecom Group, National Express Group, Old Mutual, Omega Insurance Holdings Ltd. (DI), Pendragon, Rathbone Brothers, Ruukki Group (DI), South African Property Opportunities plc, Sportech, Trinity Mirror, Tullett Prebon, Wood Group (John)TRADING ANNOUNCEMENTSDixons Retail UK ECONOMIC ANNOUNCEMENTSBoE Interest Rate Decision (09:30)Industrial Production (09:30)Manufacturing Production (09:30)UK Trade (00:00)FINAL DIVIDEND PAYMENT DATEMondiQ1Aegon NV, Bank Pekao SA GDS (Reg S), Coca-Cola HBC S.A., Corio NV, Hellenic Telecom Industries SA ADS, OJSC Magnit GDR (Reg S)Friday May 11INTERIM DIVIDEND PAYMENT DATEKier GroupQUARTERLY EX-DIVIDEND DATELilly (Eli) & CoINTERNATIONAL ECONOMIC ANNOUNCEMENTSConsumer Price Index (GER) (07:00)Producer Price Index (US) (13:30)U. of Michigan Confidence (Prelim) (US) (15:00)Q3Eurocommercial Properties NVIMSSCatlin Group Ltd., Centrica, Logica, Petrofac Ltd.AGMSCentrica, Clarkson, Clarkson, Goldenport Holdings Inc., Kazakhmys, Logica, Ovoca Gold, Petrofac Ltd., Planet Payment Inc., Telekomunikasi Indonesia (Persero) ADS, UBMUK ECONOMIC ANNOUNCEMENTSProducer Price Index  (09:30)FINAL DIVIDEND PAYMENT DATE32Red, AZ Electronic Materials SA (DI), Drax Group, Fisher (James) & Sons, Foreign and Colonial Inv Trust, Glanbia, Kerry Group 'A' Shares, Meggitt, Microgen, Molins, Psion, Schroders, Schroders (Non-Voting), Smurfit Kappa Group, Vitec Group, WSP GroupQ1International Consolidated Airlines Group SA (CDI), Telefonica SA