The Week Ahead: Modern life gives Beales a beating
Monday 24 June 2013
Department stores like the 32 shops that Beales runs are a dying breed. These small-town stores were once the heart of the high street. But, as other old-fashioned retailers have found, cheaper competitors, the internet and modern life have not been kind. Beales has shops from Harrogate to Horsham but its sales growth has been weak, and it reported a loss this year. When it reports its half-year results today, it is likely it will have suffered another tough period, with the inconsistent weather a major problem for many retailers.
Investors will also want to know what is happening with the job of chairman. Keith Edelman, best-known for his stint running Arsenal Football Club, said this month that he plans to retire. The chief executive Michael Hitchcock, who took over in February, has a difficult job on his hands. But the Bournemouth-based group, which traces its roots back to 1881, is in a better financial position than earlier this year after announcing a refinancing of its debt.
Results/Updates: Andor Technology, Beales, Porvair, Devro, Tarsus, Tyman.
Carpetright may just be able to justify rolling out a red one tomorrow. It has extended its market share and been helped by the weather and the rise in housing activity, and has improved costs. Gross margins are expected to be in line and it may have made some progress on its weaker overseas business in the Netherlands, Belgium and Ireland. Analysts at Numis expect its final results to bring in £9.5m in pre-tax profit. But Numis is concerned the shares are still overvalued, and rates them a sell at 350p.
Results/Updates: Advanced Computer Software, African Barrick Gold, Carpetright, Northgate, Petrofac, Ovoca Gold, Domino Printing.
Is composting something that gets punters excited? When TEG Group last month said it had reached a composting milestone, having recycled one million tonnes of waste, enough to fill Wembley Stadium, the shares rallied. The AIM-listed organic waste solution group's trading update is expected to reveal strong growth. Last week, it said it had won a contract from Perth & Kinross council for the treatment of waste, and more contracts are expected soon.
Results/Updates: Carphone Warehouse, Stagecoach, IFG Group, Northern Petroleum, Silence Therapeutics, Bunzl, Kentz, Standard Chartered, TEG Group, Real Good Food.
Who is having a punt on Betfair? Fresh from a flutter at Royal Ascot last week, investors will be keen to hear what the online betting exchange has to say alongside its annual results after it rejected a £980m private-equity bid last month. Analysts at Citi think the fact it said no to the bid means there could be "considerably more upside to pricing changes than we had initially expected". It raised its rating from neutral to buy and increased the target price to 950p this month. Increasing commission has led to improved revenues and back in May, Betfair forecast underlying earnings would be £73m for the year. Betfair said it is testing pricing elasticity in five markets. Citi thinks there is no reason why commission rates need to be universal across geographies, sports or markets. Citi said: "At current commission levels, we would value the business at 710p." But it added that a significant increase "could lead to a 1,200p valuation". Numis expects management to defend further its decision not to have entered into bid discussions.
Results/Updates: Betfair, CSR, Debenhams, Glanbia, Havelock, JD Sports, John Wood.
Outsourcing services provider Serco looks interesting ahead of its pre-close statement on Friday. Panmure Gordon rates it a buy with a 700p price target because it is trading at a discount to its peer Capita. Investors will be looking for information on margins following quite hefty investment in growth. Panmure thinks "rewards more than outweigh the risks" for the stock. Numis is predicting the Boris bikes provider to "deliver strong organic revenue growth of 7 per cent", driven by last year's "record level of contract awards".
Results/Updates: Keller Group, Xenetic Biosciences.
Today Nationwide house price survey.
Tomorrow British Bankers Association mortgage approvals, US consumer confidence data, US new home sales and manufacturing data.
Wednesday CBI reported sales, Bank of England Financial Stability Report, CBI realised sales, Inflation Report hearings.
Thursday 30-year bond auction; Bank of England credit conditions Survey; current account; final GDP, GfK consumer confidence
Friday UK index of services.
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