The Week Ahead: B&Q woes weigh on ailing Kingfisher


Kingfisher, the do-it-yourself giant, may be launching the retailing reporting season on Thursday but few expect the calendar to get off to a flying start. The group has promised to meet market expectations, despite shocking investors recently with its first fall in quarterly sales at B&Q for almost three years.

Kingfisher, the do-it-yourself giant, may be launching the retailing reporting season on Thursday but few expect the calendar to get off to a flying start. The group has promised to meet market expectations, despite shocking investors recently with its first fall in quarterly sales at B&Q for almost three years.

Gerry Murphy, the chief executive, will come under pressure to explain how he intends to reignite a business that, as the UK's biggest seller of screws and nails, should be flying high despite the slowdown in the housing market. He will also have to fend off criticism that the group's overseas expansion ambitions have distracted its bosses from its core businesses in the UK and France, where its Castorama arm is experiencing trading hiccups.

JP Morgan still expects Kingfisher to report a profit of £685m before tax, goodwill and exceptionals. But the broker warns that an early Easter may combine with a cautious UK consumer to slow like-for-like sales further in the first quarter. The meagre 0.6 per cent underlying rise in fourth-quarter sales hit its shares, which are supported by speculation that the US group Home Depot may swoop on its only European rival.

TODAY: The housing market will once again be a talking point this week, with results from Bovis Homes today and Barratt Developments due this week. After cautious statements in the past fortnight from other highly regarded sector players, and disappointment from Westbury, Bovis's comments will be closely scrutinised.

Analysts expect the high profit margins at Bovis to have been advanced in 2004, as a result ofconstruction efficiencies. Williams de Bröe is looking for a 24 per cent jump in full-year pre-tax profits, to £153m, although this is higher thanmost predictions, of between £141m and £150m.

Results: Full year - Abbot, Bovis Homes, Greggs, Hiscox, Regus, Entertainment Rights, Johnson Service, Group 4 Securicor, Greggs. Half year - Centaur.

TOMORROW: Expect the copper and molybdenum miner Antofagasta's profits to soar to about $576m (£299m) for 2004, from $110m previously. Bears of the stock noted that the price of molybdenum has begun to moderate. The group is likely to be confident about future copper prices, but this may be tempered by concern over the volatile Chilean peso. According to Numis Securities: "Management's cautious statements belie their more aggressive approach to mine planning, expansion and construction."

Results: Full year- Antofagasta, Computacenter, Cookson, Derwent Valley, Laird, Mersey Docks, Beazley, iTouch, John Menzies, Trafficmaster, Wyevale Garden Centres, Xaar.

WEDNESDAY: Johnston Press, the regional newspaper publisher,told the market that advertising revenues were strong last year. Pre-tax profits are expected to be up 14 per cent to £149m. Numis said: "One key issue this year will be the impact of rising newsprint prices. We estimate newsprint prices will rise by between 7 per cent and 9 per cent in 2005."

Smiths Group, the engineer, ought to provide more detail on its recent $925m acquisition of Medex with its interims results. Greater clarity on the expected synergies from the acquisition is hoped for, particularly in routes to market, together with the deal's implications for sales growth. The City would like an update on future R&D spend and clues to further acquisitions. Pre-tax profit is seen at some £150m, up from £133m last time.

Results: Full year - Alea Group, Johnston Press, Provident Financial, JKX Oil & Gas, Unite. Half year - Smiths Group. Trading update - Luminar.

THURSDAY: This will be a landmark week for Corus, which is expected to report its first full-year operating profit since the company was formed in 1999 through the merger of British Steel with the Dutch player Hoogovens. Operating profits will come in at more than £600m, from £160m in the first half, after a great second half for demand and pricing.The benefits of the restructuring will also be reflected in the company's figures. Investors will want to know whether steel price rises will continue to outpace the increase in raw material costs - which would lead to contracting margins in 2005.

Results: Full year - Corus, Kingfisher, McAlpine (Alfred), Paladin Resources, Premier Farnell, Ted Baker, Barratt Developments. Trading update - BPB.

FRIDAY: Results: Full year - Aga Foodservice, Collins Stewart, Friends Provident, Premier Oil.

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