The Week Ahead: Investors unlikely to clean up on McBride

 

Today

There is pressure for the City to clean up its act, but today’s first-quarter update from soap-to-detergent maker McBride might not be what people had in mind. Analysts expect the squeaky-clean update to be largely lacklustre because its results usually improve in the second half.

Numis said “growth in the full year 2013-14 is likely to be extremely second-half loaded so there is unlikely to be much to excite in the short term”. Even so, investors will be closely watching margins in the highly competitive price environment of own-brand personal and homecare products.

Although there are signs the price wars have calmed down somewhat, McBride has been focusing on developing new products so any news on this will be of considerable interest to punters.

Results/Updates: Essentra, McBride, Nanoco and Tristel.

Tomorrow

Fears of a prolonged slowdown of sales growth in China has rocked luxury goods companies again recently, and tomorrow Burberry will update on its six-months sales to October. Analysts like the long-term outlook for the group but some have warned of potential issues from the fine summer in Europe.

Luca Solca at Exane BNP Paribas said the company’s focus on outwear – including its famous trenchcoats – will have helped sales in the first quarter “when the weather was horrible but a slowdown is to be expected over the summer”. Analysts at Berenberg expect half-year sales of £981.7m – around 4 per cent below a company-compiled consensus of just over £1bn. Investors will also be watching to see how its make-up and perfumes business performs after it took the fragrances in-house. Although the longer term looks rosy, Mr Solca also pointed out that Burberry’s move into make-up and control of the fragrances business means there is “execution risk”.

Results/Updates: Burberry (pictured), Bellway, Carpetright, dotDigital, e2v Technologies, Hargreaves Lansdown, Lombard Risk Management, Michael Page, Rio Tinto and Utilitywise.

Wednesday

Latin American precious metals miner Hochschild Mining’s third-quarter update follows news of its purchase of the remaining stakes that it didn’t already own in Peruvian silver mines Pallancata and Inmaculada. Analysts thought the deals were good news for the group, especially as half of the equity will come from its chairman, Peruvian businessman Eduardo Hochschild, who is the company’s largest shareholder.

Metals prices have been weak and this will of course have an impact on the figures, but management has already adopted a highly conservative approach to guidance on the outlook for the group since May so any concerns have already been factored into the price.

Results/Updates: e-Therapeutics, Hochschild Mining, Imperial Innovations and Smiths News.

Thursday

By Thursday, the market could do with a drink but spirits giant Diageo’s third-quarter update is expected to show a mixed bag in terms of regional performance.

Europe will be tough again and there are concerns that emerging-market growth will have also slowed.

However analysts at JP Morgan think the Smirnoff-to-Guinness owner is likely to produce an update that will show its “geographical and brand diversity” means it is less “exposed” to any problems in a single region. Analysts at Nomura predict sales growth of 4 per cent “with growth in emerging markets” and resilience in the “US and a less-negative decline in Western Europe”.

Results/Updates: BSkyB, Britvic, Booker, Bunzl, Cairn Energy, Dechra Pharma, Diageo, Etalon, Ferrexpo, Fresnillo, Jupiter Fund Management, Man Group, Mothercare, Omega Diagnostics, Polymetal International, Rank, Rathbone Brothers, Renishaw SAB Miller, Speedy Hire and Travis Perkins.

Friday

The continued squeeze on household incomes should be good for door-to-door lender Provident Financial, but Numis expects this to cause volumes to fall and impairments to increase for the third quarter update on Friday.

However the broker’s analyst James Hamilton also predicts its credit card Vanquis business will have had a “very strong performance” which will off set issues in its home credit arm.

Results/Updates: Anglo American, Evraz, Provident Financial, Record and Spectris.

Economics Diary:

Today

Chinese consumer price index, Chinese producer price index.

Tomorrow

Consumer price index, Office for National Statistics house price index, producer price index, retail price index, US Empire State manufacturing index.

Wednesday

Average earnings data, claimant count data, unemployment rate.

Thursday

Retail sales, US industrial production, US unemployment claims.

Friday

China retail sales.

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