The Week Ahead: Barclays' results signal start of the bonus season

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The Independent Online

Signalling the start of the banks' reporting season, Barclays' full-year results tomorrow will be especially closely watched after the publication last week of Project Merlin, the agreement between the Government and the biggest banks.

Last year, Barclays managed to smash expectations – revealing earnings more than 10 per cent above consensus – but Exane BNP Paribas' Ian Gordon is "not anticipating a significant 'beat'" this time round.

He feels the results will be "a source of further reassurance and comfort as distinct from delivering any material positive earnings surprise", predicting the bank's profit before tax will come in at around £5.7bn.

As well as the performance of Barclays Capital, the focus will also be on comments expected from Bob Diamond on his goals as the new CEO.

Instead of "radical announcements", Evolution Securities' Arturo de Frias feels Mr Diamond will touch on Barclay's "three main (and very interrelated) problems... how to improve the low profitability of the bank, how to rebalance the business mix, and how to reach (and keep) a 10 per cent [core tier 1 capital ratio] under Basel III".


Strong results are expected from Fidessa today, with analysts pointing out that the trading systems group often manages to beat market expectations. Panmure Gordon's George O'Connor is estimating its revenue in 2010 to total £266.9m, compared to £238.5m the year before, while in terms of the outlook he predicts it will "speak about the uncertainty with regard to both the macroeconomic environment and the impact of regulation."

Results/Updates: Fidessa.


The recently announced disposal of its vegetarian brand Quorn may have resulted in Premier Foods enjoying a strong run, but Investec believes the company's top line remains weak. Ahead of its full-year results on Tuesday, therefore, the broker's analyst Martin Deboo says the "concern is that [it] might have made numbers by favouring margin over growth in the second-half, to the potential detriment of [the fiscal year 2011]."

Altium Securities' feels there is a good chance Domino's Pizza's preliminary results tomorrow will result in another round of upgrades, following its update at the start of the year.

There will be a large amount of interest in the group's outlook, says the broker, including comments on "input price inflation,... lunch time and later evening sales potential, [and] the company's plans for its growing cash pile."

Results/Updates: Barclays, British Land, Domino's Pizza, Intercontinental Hotels, Micro Focus, Pennon, Premier Foods and Yell.


Panmure Gordon believes engineer Morgan Crucible's numbers will be greeted positively by its sector peers on Wednesday, "allaying fears over pricing ability, margins, and the position in the cycle". The group's full-year results, says Oliver Wynne-James, are expected to beat forecasts in a number of areas "given the strong close to the year enjoyed by the industrial space".

"The more important part of the Morgan Crucible story, however, should be tied to first-quarter trading, and visibility for [the year ahead]," added the analyst.

"Here we expect growing confidence over the pick-up in mid-cycle end industries, and a clear signal that it is using its niche market position and materials know-how to more than pass on the inflation in raw material costs."

Results/Updates: African Barrick Gold, BHP Billiton, Millennium & Copthorne Hotels, Morgan Crucible, Thorntons and WS Atkins.


With its full-year results on Thursday, Reed Elsevier should – according to UBS's Polo Tang – prove reassuring for the market. Noting that its legal unit "has been the biggest drag on investor sentiment... signs that organic revenue growth is improving and that the publishing giant is not losing market share are likely to be taken well."

Meanwhile, Deutsche Bank's Mark Braley says Reed Elsevier's science business will also be in focus, adding that "the degree of pain from academic library budgets" is unknown.

Results/Updates: Cable & Wireless Worldwide, Dunhelm, EasyJet, Holidaybreak, Kingfisher, Ladbrokes, Rathbones, Redrow, Reed Elsevier and Sports Direct.


Rentokil Initial is among the companies updating investors on Friday, with the multi-tasking group releasing its preliminary figures. Analysts are expecting the extreme weather in December to have had a negative effect, especially on the City Link delivery company, which saw its managing director resign at the end of last year.

Results/Updates: Anglo American, Go-Ahead and Rentokil Initial.



Eurozone industrial production


Consumer prices index; DCLG house prices; Eurozone GDP; Retail prices index; US Empire State manufacturing survey; US retail sales


Bank of England inflation report; Claimant count unemployment data; ILO unemployment rate; US industrial production; US producer price index


Eurozone construction output; Eurozone consumer confidence; US consumer price index


Retail sales data