The Week Ahead: ABF thrives on cheap clothes and chapattis
Monday 10 September 2012
The mound of cheap Primark clothes piling up in the UK's collective wardrobes will be joined by similar size stacks across Europe as the budget fashion chain continues its expansion across the continent. Associated British Foods, the "throw-away" clothes business to sugar company, has had a strong run with Primark, but investors will also be looking to see if operating profits at its sugar division are being sustained at its trading update today.
ABF's purchase of Elephant Etta, Britain's biggest producer of chapatti flour, got the approval from the Office of Fair Trading last week. The brand, part of Westmill Foods, which ABF agreed to buy this summer for £34m from Premier Foods, is used by half of Britain's Asian families and bolsters ABF's food cupboard.
The broker Sheridan Admans at The Share Centre rates ABF a buy, while scribes at UBS also rate it a buy, with a share price target of 1,400p.
Results/Updates: Hydrogen, Telit Communications, Williams Grand Prix, Murgitroyd.
How many times have 40-plus male analysts and journalists warned that when a 40-plus man is spotted wearing a Superdry hoodie or T-shirt it must mean the brand is dead?
Remarks like this have accompanied nearly every Supergroup comment. Although apparently still fashionable for now, the group has revealed a series of embarrassing problems, including warehouse stock issues and an accounting error that was blamed on someone not being able to do their maths.
Peel Hunt scribes are not fans and rate the stock a sell with a target price of 300p.
Analysts will be awaiting news on overseas sales and expansion abroad and an update on its wholesale order book when it updates on its first quarter.
Peel Hunt forecasts full-year retail sales growth of 20 per cent.
Results/Updates: Futura Medical, Hilton Food, Laura Ashley, Ashmore, Interior Services, Town Centre Securities, Betfair, IG Group, SuperGroup, Assura, Betfair, Colefax, Oxford Instruments, Reneuron, Rockhopper Exploration, Scientific Digital Imaging.
It's not only the UK's cash-strapped homeowners that could hurt B&Q owner Kingfisher. The French are also giving analysts cause for concern. Their appetite for products from Kingfisher's Castorama and its tradesmen-focused Brico Dépôt could be shrinking.
Sheridan Admans at The Share Centre said investors are concerned that low to no growth in the UK and Europe and poor weather over the summer is likely to impact Kingfisher's revenues and rates the stock a hold. There are also concerns that margins will continue to be hit by increased marketing costs.
Panmure Godron scribes are more positive and rate it a buy with a target price of 350p. Panmure's Philip Dorgan thinks the slowing French economy should reverse over time, but he still remains cautious and has downgraded his current pre-tax profit forecast by 6 per cent to £748m.
Results/Updates: Alliance Pharma, Gulf Keystone Petroleum, Interquest, Kingfisher, Netplay, Tikit, Barratt Developments, Thorntons.
Cushions, curtains and kitchenware have been flying off the shelves at Dunelm Mill as shoppers spend on mini makeovers for their homes if they can't afford to move to a new one. Analysts at Peel Hunt rate the homewares retailer's shares a buy with a target price of 650p, and it keeps the scribes' "top pick in the sector" status, seeing further growth of brand awareness, direct sourcing and online developments.
Results/Updates: Next,Premier Farnell, Brooks Macdonald, Centaur Media, Kier, Sinclair IS Pharma, Darty, Home Retail, Investec, Photo-Me.
Brits' boozing and eating pub grub during the Diamond Jubilee and Euro 2012 helped JD Wetherspoon end its year on a high. The group is expected to reveal a jump in profits in its full-year results on Friday. Its 850 pubs are forecast to report a 15 per cent rise in profits to close to £70m. Investors will be awaiting indications of any impact from the Olympics. Results/Updates: MP Evans, Songbird Estates.
Lloyds employment confidence survey, KPMG/Rec report on jobs compiled by Markit.
Rics house price balance, trade figures, Bank of England Monetary Policy Committee appointment hearing with Ian McCafferty.
Employment data – claimant count rate and jobless claims change, average weekly earnings and employment change updates.
Bank of England Quarterly Bulletin 2012 third quarter
Employment and consumer prices for the eurozone
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