The Week Ahead: Hays profits under pressure despite solid year

Hays, the FTSE 250-listed recruitment group, is due to publish full-year results tomorrow. Following a positive fourth-quarter update last month, Panmure Gordon is anticipating evidence of a "solid" performance in the year to June, forecasting adjusted pre-tax profits of £237.9m. The broker has also pencilled in a full-year dividend of 5.9p, up from the 5p per share paid last year.

Beyond the numbers, the focus will be on the outlook for the year ahead as the business deals with a slowing economy. "The company has already indicated that the UK business has been coming under increasing pressure, with the focus on profit protection (no headcount growth) rather than growth," Panmure said. "Comparatives from last year are still relatively strong and, with the current climate perhaps more akin to the early 1990s rather than the slowdown of 2001-2003, this could be a source of further downside risk."

As a result, for 2009, the broker forecasts adjusted pre-tax profits of £200.5m, at the lower end of the current consensus range of £258m to £192m.

"We believe we will see consensus move towards the bottom end of the range, which could create some pressure on the share price," the broker added.



Today: The software group ANT is due to publish interim results and, given the commentary in the company's AGM statement in May, and the positive newsflow since, KBC Peel Hunt expects an in-line performance in the period to June.

"The theme at the [2007 results in February] was of cost control with second-half improvement as [the] units shipped increased 40 per cent year-on-year and royalty rates improve with the product mix, while licence revenue declines, as expected, in favour of ongoing royalty development," the broker said in a recent preview note, adding: "Cash at 31 December was £6.2m, and we expect £4.7m for the first half of 2008, falling to £4.4m, or 18p per share [for the full year]."

KBC also weighed in on Goals, the five-a-side football centre provider which is due to publish interims today. The broker expects a 19 per cent hike in pre-tax profits, to £3.7m, and a 17 per cent increase in earnings per share, to 5.8p.

"Following the first three additions in March, all three of the remaining openings, at Dudley, Tolworth and Northampton, are already on site and should open progressively over the second half, to meet the target of six additions for 2008," KBC said, adding that another six additional sites in 2009 should help earnings to grow by another 30 per cent.

Results/updates: Goals, ANT.



Tomorrow: Results/updates: Ashtead, Hays.



Wednesday: Analysts expect a subdued announcement from Punch Taverns, the pubs group which is due to publish a trading update midweek. Management is expected to reconfirm that it remains confident of meeting the market's lowered full-year profit forecasts. But as Morgan Stanley pointed out in a recent preview note, against the backdrop of a protracted consumer slowdown and a debt-laden balance sheet, "it is hard to see the stock outperforming".

The broker anticipates some improvement in life-for-like sales this quarter, but margins are expected to come under pressure from rising food and energy costs, foretelling what is likely to be a challenging year ahead.

Also on Wednesday, the online payment specialist Neteller is due to publish interim results, and Evolution Securities forecasts $4.1m in first-half earnings before interest, tax, depreciation and amortisation. Pre-tax profits are expected to come in at $3.1m, with 1.9 cents in earnings per share.

"Neteller will grow on the back of online merchants, mainly online gaming, and in Europe for the foreseeable future," the broker said, adding: "We see this as an attractive growth driver and see Neteller's product as still work in progress. As it increased the range of product on offer it should be able to deliver its target of increasing active users."

Results/updates: DS Smith, Signet, WS Atkins, Neteller and Punch Taverns.



Thursday: Whitbread, the FTSE 100-listed hospitality group, is due to publish a trading update near the end of this week and, according to Dresdner Kleinwort, while there could well be some deceleration in like-for-like's for the last 11 weeks, any impact is expected to be mitigated by a strong performance at Premier Inn in London. The broker said: "The pace of growth [is] likely to slow in coming quarters though and we have reduced estimates to better reflect this and see few immediate catalysts while UK consumer uncertainty remains."

Also on Thursday, SQS, the software testing and quality management services provider, is due to publish interim results. Evolution anticipates €63.3m in revenues, with €5.6m in earnings before interest and tax, reflecting assumptions of robust top-line growth in the company's core geographies, stable margins and a relatively immaterial contribution from the recent acquisition of Sweden's Validate.

"Our assumptions of growth and stable margins should prove conservative given the group's positive AGM statement and recent update highlighting outsourcing contract wins," the broker said, reiterating its "buy" rating on SQS.

Results/updates: McBride, SQS and Whitbread.



Friday: Results/updates: Go-Ahead, HMV and JD Wetherspoon.

Start your day with The Independent, sign up for daily news emails
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

SThree: Talent Acquisition Consultant

£22500 - £27000 per annum + OTE £45K: SThree: Since our inception in 1986, STh...

Recruitment Genius: Experienced Financial Advisers and Paraplanners

Negotiable: Recruitment Genius: This extremely successful and well-established...

Guru Careers: FX Trader / Risk Manager

Competitive with monthly bonus: Guru Careers: We are seeking an experienced FX...

Guru Careers: Investment Writer / Stock Picker

Competitive (Freelance) : Guru Careers: An Investment Writer / Stock Picker is...

Day In a Page

How to stop an asteroid hitting Earth: Would people co-operate to face down a global peril?

How to stop an asteroid hitting Earth

Would people cooperate to face a global peril?
Just one day to find €1.6bn: Greece edges nearer euro exit

One day to find €1.6bn

Greece is edging inexorably towards an exit from the euro
New 'Iron Man' augmented reality technology could help surgeons and firefighters, say scientists

'Iron Man' augmented reality technology could become reality

Holographic projections would provide extra information on objects in a person's visual field in real time
Sugary drinks 'are killing 184,000 adults around the world every year'

Sugary drinks are killing 184,000 adults around the world every year

The drinks that should be eliminated from people's diets
Pride of Place: Historians map out untold LGBT histories of locations throughout UK

Historians map out untold LGBT histories

Public are being asked to help improve the map
Lionel, Patti, Burt and The Who rock Glasto

Lionel, Patti, Burt and The Who rock Glasto

This was the year of 24-carat Golden Oldies
Paris Fashion Week

Paris Fashion Week

Thom Browne's scarecrows offer a rare beacon in commercial offerings
A year of the caliphate:

Isis, a year of the caliphate

Who can defeat the so-called 'Islamic State' – and how?
Marks and Spencer: Can a new team of designers put the spark back into the high-street brand?

Marks and Spencer

Can a new team of designers put the spark back into the high-street brand?
'We haven't invaded France': Italy's Prime Minister 'reclaims' Europe's highest peak

'We haven't invaded France'

Italy's Prime Minister 'reclaims' Europe's highest peak
Isis in Kobani: Why we ignore the worst of the massacres

Why do we ignore the worst of the massacres?

The West’s determination not to offend its Sunni allies helps Isis and puts us all at risk, says Patrick Cockburn
7/7 bombings 10 years on: Four emergency workers who saved lives recall the shocking day that 52 people were killed

Remembering 7/7 ten years on

Four emergency workers recall their memories of that day – and reveal how it's affected them ever since
Humans: Are the scientists developing robots in danger of replicating the hit Channel 4 drama?

They’re here to help

We want robots to do our drudge work, and to look enough like us for comfort. But are the scientists developing artificial intelligence in danger of replicating the TV drama Humans?
Time to lay these myths about the Deep South to rest

Time to lay these myths about the Deep South to rest

'Heritage' is a loaded word in the Dixie, but the Charleston killings show how dangerous it is to cling to a deadly past, says Rupert Cornwell
What exactly does 'one' mean? Court of Appeal passes judgement on thorny mathematical issue

What exactly does 'one' mean?

Court of Appeal passes judgement on thorny mathematical issue