The Week Ahead: Dairy Crest's cheesy ads win City friends
Monday 24 September 2012
What do cheese and pop stars have in common? Dairy Crest has had a habit of using singers to promote its brands. First there was Johnny Rotten's Country Life ads, now there is "up and coming" singer Ed Prosek singing Paul Simon's "Homeward Bound" in its Cathedral City telly ads.
The commercials are going down well, we are told. And so is the company's strategy. Now the group has flogged its French spreads brand St Hubert, analysts think it is in good shape. Its food business is doing rather well, in contrast to milk, which has been at the centre of the milk pricing scandal.
The Jefferies scribe Alex Howson rates the cheese to butter business a buy, ahead of its trading update today, and gives its shares a price target of 400p, up from 370p. He thinks its key food brands have maintained encouraging growth, but the milk business remains challenged. But he argues that there is "scope for management to restore Dairies profitability mid-term" and Mr Howson remains "positive" on the company. He expects profit before tax for the full year to come in at £49.1m.
Results/Updates: AG Barr, China Food Company, DDD Group, EKF Diagnostics, Lighthouse Group, Manganese Bronze, Michelmersh Brick Holdings, Personal Group, RGI International, VPhase, Finsbury Food, Petra Diamonds, Aberdeen Asset Management, QinetiQ.
There is no indication how much money Daily Mail owner Daily Mail & General Trust makes from the most-visited newspaper website in the world: Mail Online. But despite this still unknown fact, scribes at Investec rate DMGT a buy, ahead of its pre-close trading update tomorrow. It has sold the US-based Evanta conference business for £58m, and earlier this year sold its Australian radio joint venture. Investec analysts think both the sales produced a good lot of cash to be re-invested. Investec's analyst Steve Liechti said: "Management continues to refocus the portfolio to concentrate on core growth and drive a higher ultimate rating" and he reiterated his share price target of 578p.
Results/Updates: Albemarle & Bond, Augean, Bond International Software, InternetQ, Judges Scientific, KBC Advanced Technologies, PhotonStar LED Group, Close Brothers, CVS, Hargreaves Services, Netcall, Regenersis.
Last month house repair and insurance group Homeserve got traders spooked that the Financial Services Authority was set to release the results of its investigation into the group. But the rumours were wide of the mark and there are still no signs of the FSA report ahead of Homeserve's trading update on Wednesday. Analysts at Liberum Capital think the update will be "unexciting" and "unlikely – although not impossible – that there will be any clarification from the FSA." But the bid speculation that emerged earlier this year could resurface. Liberum did not "rule out an eventual bid from private equity" but said that any potential bidder would need greater clarification on Homeserve's business going forward after the FSA report into mis-selling.
Results/Updates: ACTA, Dillistone, Domino's Pizza, IQE, HMV, Icap, London Stock Exchange, S&U, Scisys.
Feeding canteen food to overseas miners, schoolchildren and the Army is still a pretty good business. Simon French at the broker Panmure Gordon said Compass Group offers "attractive investment qualities given its defensive, predominantly non-UK earnings". Panmure, which rates the stock a buy, raised its share price target for the company from 785p to 820p ahead of its trading update on Thursday. The pre-tax profit consensus for the group is £1.089bn.
Results/Updates: Fairpoint, Inditherm, Nationwide Accident Repair Services, SimiGon, Straight, WANdisco, Hansard Global, Indigovision, Pan African Resources, Euromoney Institutional Investor, Tate & Lyle, TUI Travel, Trinity Biotech.
Investors will be hoping there aren't any more own goals for five-a-side football operator Goals Soccer Centres on Friday. Shareholders did not approve the planned takeover by one of Canada's biggest pension funds, Ontario Teachers' Pension Plan, last month. Goals accepted a £73.1m bid, but then surprised the market by announcing that not enough independent shareholders passed the motion.
Goals, which operates 43 outdoor centres in the UK and one in the US, will update the market on its half-year results on Friday. It is also set for a windfall after winning an appeal against a tax ruling by HMRC earlier this month.
Results/Updates: Harvey Nash, Orchid Developments, Helphire, Electrocomponents, Hyder Consulting, Thomas Cook.
Today German retail sales, import prices and business climate update.
Tomorrow BBA house purchase loans.
Wednesday CBI reported sales.
Thursday GDP (Q2 final revision); Current account (Q2); total business investment.
Friday GfK consumer confidence (September); Index of services.
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