The wet weather has taken its toll on the high street this summer. The clothing retailer Next is expected to post slightly improved first-half profits this week, but some are preparing for a possible shock.
Next's figures are likely to suffer from a lack of punters through the door as the rain kept them away, but it should offset those falls by rising sales on its online business Next Directory and a programme of cost-cutting. Evolution Securities said the stock has underperformed the wider market by 15 per cent over the summer, but that the value was now about right.
The market will be waiting for the management's outlook for the rest of the year, and hoping for a better take-up of next season's collection. Retail like-for-like sales and sentiment is weak, but it does have a strong cash flow, high returns and low gearing. The interim consensus is a 2 per cent increase in first-half profits at £183m.
TODAY: 888 Holdings is expected to boost revenues by a quarter, but analysts are pretty down on a stock that is facing a challenging longer-term outlook. Dresdner Kleinwort said the online gambler is underperforming its listed rivals in customer and revenue growth. "The stock's premium rating to the much faster-growing PartyGaming is unjustified," it added. The problems could be visible this week, with limited underlying revenue in the casino division. It put the stock on a "sell" recommendation.
Results: Full year – Aero Inventory; Glisten; Minerva. Half year – 888 Holdings; Axon Group; Batm Advanced Communications; Bond International Software; Bovis Homes Group; Chaucer Holdings; Corporate Services Group; Dialight; Forth Ports; Johnson Service Group; KBC Advanced Technologies; Medical Solutions; OCZ Technology Group; Star Energy; TT electronics; Tullett Prebon; Zirax.
TOMORROW: Cairn Energy was up on Friday after announcing two acquisitions, but one of its existing projects casts a longer shadow over tomorrow's announcement. Analysts complained about a lack of visibility on its exploration opportunities, and the prospective update on a project in India is described as crucial to the share performance.
Elsewhere in the sector, Imperial Energy is also reporting, but analysts are only really interested in whether it updates on progress in Russia. KBC said it would have to secure support from the Russian authorities to be fully operational in the country. "Its current ability to achieve that seems somewhat limited given the Russian government's current attitude towards foreign E&P companies," the broker added.
Elsewhere, International Personal Finance is reporting its first trading update since demerging from Provident Financial in July. The stock has suffered from the wider market sell-off in the sector since going it alone, but Dresdner believes the market should take another look. It estimates interim profits of £16.8m. Investors will be looking for further information into its potential plans to expand into Russia.
Results: Full year – Redrow; Half year – Augean; Cairn Energy; Cello Group; Cobham; Computacenter; Derwent London; Evolution; French Connection Group; Goldenport Holdings; Headlam Group; Heywood Williams Group; Imperial Energy; Interior Services Group; Just Car Clinics Group; MacFarlane Group; Next; NSB Retail Systems; Oxford Biomedica; Provident Financial; Savills; Sportech; Tikit Group.
WEDNESDAY: Restaurant Group was the focus of takeover speculation last week, although the whispers petered out by Friday. Evolution said pre-tax profits would be around £16m, up 19 per cent on last year, although it added that there would be some caution in the outlook.
Melrose, which invests in underperforming specialist manufacturing, has had a busy few months selling businesses, and returned £220m to shareholders. It is hoping that recent market turbulence will open some potentially cheap acquisitions. Citigroup is predicting profits of £9.8m up from £7.6m last year.
Results: Full year – Alumasc Group; Ashmore Group; Tennon Group; Thorntons. Half year – Alliance Pharma; Charter; Chime Communications; Ennstone; Hardy Underwriting Group; Intelligent Environments Group; Mavinwood; Melrose; Nikanor; Parity Group; Prostrakan Group; Restaurant Group; Spring Group; Unite Group; Xaar.
THURSDAY: The market is expecting good things from Aggreko's results. The company, which provides temporary power generators, is being backed to boost interim profits by 60 per cent according to Evolution. While the stock suffered amid the recent market turmoil, "interim results are forecast to be stunningly good," the broker said. It added that following recent profit taking, the price was at a good buying level. The boost in profits is expected to be driven by its International Power Projects business.
Results: Full year – IndigoVision Group; Isotron; Kier Group. First half – Aggreko; Biocompatibles International; Cattles; Dignity; Foseco; Prezzo; SIG; SVG Capital.
FRIDAY: Results: Half year – Ant; Costain Group; Mission Marketing Group; Novae Group. Full year – NetStore.