The Week Ahead: Wolseley should build on its solid foundations

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The Independent Online

When a company's fortunes seem to be so closely tied to the US housing market, it is hard to be bullish about their results. Yet, analysts are confident that Wolseley should be able to offset losses, and looks like a good bet for the longer term.

Evolution Securities said the company's management and business model are strong and believes that its European business should help to compensate some losses from the US.

Evos said: "This is a distributor with world-class capability. It is trading on a five-year low on virtually all measures. With the ability to offset some aspects of falling US housing activity, the shares are good value. The US housing market is a year from stability, but Wolseley has and will continue to effectively manage the impact on its business."

Pre-tax profit is expected to be around £786m and, with the share price slumping this year, the building supplies group is backed to provide a solid upside in the long term.



TODAY: Results: Full year – Centaur Media, Close Brothers, PuriCore, Wolseley. First half – Alexon, Camco International, Charles Taylor Consulting, Clean Air Power, Heritage Underwriting Agency, Highland Gold Mining, Peter Hambro Mining, Plant Health Care, Velosi.



TOMORROW: The troubled property services provider Erinaceous Group is still recovering from its recent turmoil that saw its takeover collapse, an exodus of senior executives and a handful of lawsuits from former employees.

The consensus among analysts in March was that the company could expect pre-tax figures for 2008 to reach £46.3m, a rise of £5.4m on 2007.

Results: Full year – Helphire, Sinclair Pharma, White Young Green. First half – Acambis, Austin Reed, Barr (AG), Central African Gold, Clinical Computing, Continuum Payment Solutions, Corin Group, Datacash, Erinaceous, Game, Hat Pin, Havelock Europa, Individual Restaurant Co, Inspace, JKX Oil and Gas, M&C Saatchi, Pipex Communications, Polyfuel, ServicePower Technologies, Tanfield; Tawa, Trafficmaster. Second quarter – Acambis.



WEDNESDAY: One sector that has underperformed badly this year on the FTSE 100 is housing, so Barratt Developments' full-year results could make for interesting reading.

It is reporting the results on Wednesday following a difficult few months and will provide an update on its progress with digesting the acquisition of Wilson Bowden last April.

Brokers are estimating pre-tax profits of around £438.9m, although that doesn't take into account the exceptionals related to restructuring costs.

Many are encouraging investors to buy into the company as its fundamentals remain strong, and the sector drag means that the shares could prove a bargain.

Results : Full year – Barratt Developments, Energy XXI Bermuda, Land of Leather, Manganese Bronze, Smiths Group, Synairgen. First half – D1 Oils, EG Solutions, Intelligent Environment, John David Group, Kesa Electricals, London Asia Capital, Manganese Gold, Mission Marketing Group,Plethora Solutions.



THURSDAY: Moss Bros continues to show delicate signs of recovery from last summer, when warm weather and the distraction of England's short-lived success in the World Cup forced revenue downwards. Not even a surge in the sale of tuxedos following the release of the new Bond film helped the company's fortunes, but the company should enjoy strong like-for-like numbers on the back of the weak comparatives.

With warm clothes and umbrellas jumping off the shelves in the unusually poor summer, pre-tax profits are expected to rise to £6.8m as the company continues to outperform the market.

Results: Full year – SCI Entertainment, Society of Lloyd's, William Sinclair. First half – Entertainment Rights, Moss Bross, MP Evans, Oxford Catalysts, Salamander Energy, SMC Group, William Sinclair Holdings.



FRIDAY: On the flip side to Moss Bros is JJB Sports, which along with its peer Sports Direct International have suffered this year.

The dreary summer and the damaged pride of England fans during the team's lacklustre performance in the Euro 2008 qualifiers have taken their toll. It has been a baptism of fire for JJB's new chief executive, Chris Ronnie, who joined last month with the company issuing a profit warning shortly after.

The shares went into freefall after the group admitted it could miss full-year targets by 25 per cent. It blamed the poor performance on the wet weather and tough comparatives with last year's World Cup, which saw England shirts fly off the shelves. JJB added in its update that trading in the six weeks to September have not improved, after its new "store- within-a-store" concept with Nike and Adidas failed to take off.

Results : First half – Andrew Sykes Group; Cellcast; Dawnay Day Carpathian; Harvey Nash; JJB Sports; New Star Asset Management; Silence Therapeutics; SPI Lasers; Surface Technology Systems; Tissue Science Laboratories.

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