The Week Ahead: Shareholders to get cash return from Enterprise
Monday 21 November 2005
In the past, the Enterprise chief executive Ted Tuppen has spent the huge amount of cash the business generates on buying groups of pubs, snapping up 4,000 outlets from Unique last year.
The trouble is, there are now few good pubs left to buy. Instead, shareholders can expect to find as much as £300m a year back in their pockets, probably in the form of higher dividends and share buy-backs.
In September, the Solihull-based group indicated that thirsty Britons had driven operating profits at least 8 per cent higher in its pubs over the past 12 months. That's slightly slower than at the half-way stage of the year, but analysts at UBS still expect 2005 profits of £301m, £73m better than last time.
Investors will be looking for any signal that the consumer slowdown or rising energy costs may hurt future profits. Enterprise will also have a platform to have its say on longer pub opening hours, which come into force this week.
TODAY: Results: Full year - Care UK; RM. Interims - Thus; Workspace.
TOMORROW: EasyJet shares flew to their highest for 18 months in the summer after the owner of Icelandair took a chunky stake, fuelling speculation that a takeover approach could be on the runway.
That distracted from solid trading in the year to the end of September, when the low-cost airline inflated its network to 187 routes out of 57 airports and shunned the levy of a fuel surcharge on flyers.
ABN Amro expects Stelios Haji-Ioannou's orange airline to post annual pre-tax profits of £66.7m, up from £62.2m a year ago.
The electricity distributor Viridian Group should unveil slightly better profits for the first half of its year too. Williams de Broë expects the Belfast-based company to notch up pre-tax profits of £57m, £1.2m better than last time.
Power transmission and distribution price controls coming into force in April 2007 are seen as key to Viridian's future success. Early signs are encouraging, the broker said.
SSL International is likely to unveil pre-tax interim profits of about £22m, £5m higher than in 2004, on the back of healthy sales of Durex in America and Eastern Europe and of its Scholl Party Feet across Europe. Last month, SSL said sales were 7 per cent ahead of last year at around £220m.
Results: Full year - Anglo Irish Bank; Enodis; easyJet; Enterprise Inns; Greencore; Innovation Group. Interims - SSL International; Viridian Group; ICAP; Great Portland Estates. Q3 - InterContinental Hotels; Signet.
WEDNESDAY: Results: Full year - Paragon. Interims - Johnson Matthey; Land of Leather; Speedy Hire; Synergy Healthcare; Radstone Technology. Q3 - Tomkins; Inmarsat.
THURSDAY: The commercial radio group GCap Media may unveil the sale of several of its local stations with half-year results. GCap - formed by a merger of Capital Radio and GWR - is believed to be considering disposals to pay for extra investment in its big-name stations, including Xfm, Capital FM and Classic FM, at a tough time for radio advertising.
In September, GCap revealed that revenues over the first six months of its year had fallen 9 per cent. Cost savings from the merger have surged to £25m from just £7.5m, and analysts want to know more before making fresh forecasts for the company.
Results: Full year - none. Interims - Bank of Ireland; United Utilities; British Land; GCap Media; Expro International; Imagination Technologies. Q3 - Kesa Electricals.
FRIDAY: Tesco's chief executive Sir Terry Leahy is due in India this week, where Britain's most successful retailer is lobbying hard to be allowed access to its huge and expanding market.
That will send shivers down the spines of rivals that Tesco is already outpacing by a country mile.
Third-quarter figures are likely to top anything from other food retailers, with analysts expecting like-for-like sales to grow by 6 per cent. Its international business should be doing better still, with sales likely to be a fifth better on the back of quicker opening of new stores.
Some investors thought Fuller Smith & Turner - the brewer of ESP and London Pride - overpaid for the Hampshire-based George Gale this month. At £82.7m, the price was certainly a full one for a deal that also raised concerns that Fullers may now own too many pubs instead of having an even split with managed outlets.
Analysts are looking at interim results for signs of weakness suffered by others in the sector in recent months.
Results: Full year - None. Interims - Fuller Smith & Turner; Caffyns. Q3 trading - Tesco.
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