The Week Ahead: Cautious optimism for tour operators' updates

Demand for holidays will be in focus when tour operators Thomas Cook and TUI Travel publish updates this week.

Worries about the strength of consumer demand has held back the shares, with both TUI, which is due to post its interim management statement and third-quarter figures tomorrow, and Thomas Cook, which is due to follow with its update on Wednesday, underperforming the FTSE All-Share Index over the year to date.

Additionally, the disruption caused by the Icelandic volcanic ash cloud highlighted what JP Morgan Cazenove termed the "exposure these companies have to exceptional events, and consequently their low earnings visibility".

That said, the broker expressed some cautious optimism about the medium-term outlook, noting that while consumer demand was falling in Britain and remained flat in Europe, employment trends were likely to "remain robust". This suggests families are likely to stick with their holiday plans, driving demand for Thomas Cook and TUI.

Turning to this week's figures, investors are likely to be greeted with news of softness in May and June. "We expect May and June bookings to have been weaker than initially expected due to the seasonably warmer than usual weather and the distractions of the world cup," JP Morgan said in a preview published last week. "However, the past four weeks should have been stronger owing to re-bookings from the failed Goldtrail operator and the more mixed weather."

Citigroup is also cautious about the May and June performance, pointing to industry data which showed that UK tour operator volumes "continued to be weak" in both months. Though encouraged by pricing trends, Citi said that while it was optimistic volumes would bounce back in July and August, it had become "increasingly concerned about signs of greater discounting, which may help deliver good volumes but could come at the cost of lower margins".

"The real focus will be on the outlook for the rest of the summer season and we expect both companies to be cautious," the broker added.

Also today, the construction company Morgan Sindall is due to issue its half-year results. Ahead of the update, Numis flagged up the likelihood of a flat year-on-year performance.

The broker expects improvements in trading to be offset by the costs of integrating the company's construction and infrastructure services arms.

Panmure Gordon said that, following the recent problems at the social housing repairs group Connaught, any comments about affordable housing trends and opportunities were likely to be talking points this morning.

Morgan Sindall's house broker, Royal Bank of Scotland, had similar expectations, anticipating the focus to be on risks attached to affordable housing.

Results/Updates: Hill & Smith and Morgan Sindall.


Shore Capital anticipates news of "relatively subdued" trading when Greggs the baker issues its half-year numbers. Beyond the headline figures, Greggs has embarked on a five-year efficiency and expansion drive and, though the programme is still in its early stages, the broker is looking forward to an update on the progress so far.

Also tomorrow, the hospitality group InterContinental Hotels is due to post interim figures. Citigroup is looking forward to a positive update, citing recent industry data which showed improvements in revenues per available room (revpar) around the world.

"We expect an optimistic tone... with management referring to strong occupancy trends, stabilising of mid-scale pricing and improved visibility for group bookings," the broker said last week, upgrading its forecasts in advance of the update.

Results/Updates: Greggs, InterContinental Hotel, International Power, Interserve, Mondi and TUI Travel.


The software specialist Micro Focus International's first-quarter interim management statement may reveal in-line trading, says Panmure Gordon.

The quarter is likely to have unfolded in step with management's hopes, said Panmure, and its analysts also expect the company to express confidence in the outlook for the rest of the year. "The chief executive officer, Nigel Clifford, is likely to reiterate guidance stating that in the short-term Micro Focus expects to deliver mid-single-digit organic revenue growth, with the ambition of returning to double-digit growth over the medium term, while maintaining adjusted earnings before interest, tax, depreciation and amortisation margins at about 40 per cent," Panmure said in a preview.

Results/Updates: Balfour Beatty, Standard Life, Micro Focus International and Thomas Cook.


Results/Updates: Prudential, Holidaybreak, Greencore and Lincat.


Results/Updates: None.

Economics Diary


Regional PMIs; Bank of England narrow money report.


British Retail Consortium-KPMG retail sales; Royal Institution of Chartered Surveyors' housing market survey; Department of Communities and Local Government house price index.


Council of Mortgage Lenders regulated mortgage survey; Office for National Statistics monthly unemployment figures; Bank of England inflation report.


Mortgage and landlord possession statistics.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Ben Little, right, is a Labour supporter while Jonathan Rogers supports the Green Party
general election 2015
The 91st Hakone Ekiden Qualifier at Showa Kinen Park, Tokyo, 2014
Life and Style
Former helicopter pilot Major Tim Peake will become the first UK astronaut in space for over 20 years
food + drinkNothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
Kim Wilde began gardening in the 1990s when she moved to the countryside
peopleThe singer is leading an appeal for the charity Thrive, which uses the therapy of horticulture
Alexis Sanchez celebrates scoring a second for Arsenal against Reading
Life and Style
An easy-peel potato; Dave Hax has come up with an ingenious method in food preparation
voicesDave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
Japan's population is projected to fall dramatically in the next 50 years (Wikimedia)
Life and Style
Buyers of secondhand cars are searching out shades last seen in cop show ‘The Sweeney’
motoringFlares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

Ashdown Group: Training Programme Manager - City, London

£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

Day In a Page

NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

UK's Major Tum to blast off on a spice odyssey

Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
John Harrison's 'longitude' clock sets new record - 300 years on

‘Longitude’ clock sets new record - 300 years on

Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

Let the propaganda wars begin - again

'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
Why Japan's incredible long-distance runners will never win the London Marathon

Japan's incredible long-distance runners

Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
Why does Tom Drury remain the greatest writer you've never heard of?

Tom Drury: The quiet American

His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace
You should judge a person by how they peel a potato

You should judge a person by how they peel a potato

Dave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
Beige is back: The drab car colours of the 1970s are proving popular again

Beige to the future

Flares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
Bill Granger recipes: Our chef's dishes highlight the delicate essence of fresh cheeses

Bill Granger cooks with fresh cheeses

More delicate on the palate, milder, fresh cheeses can also be kinder to the waistline
Aston Villa vs Liverpool: 'This FA Cup run has been wonderful,' says veteran Shay Given

Shay Given: 'This FA Cup run has been wonderful'

The Villa keeper has been overlooked for a long time and has unhappy memories of the national stadium – but he is savouring his chance to play at Wembley
Timeless drama of Championship race in league of its own - Michael Calvin

Michael Calvin's Last Word

Timeless drama of Championship race in league of its own