The Week Ahead: HSBC set to reveal robust full-year figures

Analysts are poised to upgrade their forecasts when HSBC posts what are expected to be a strong set of full-year numbers this morning.

Bank of America-Merrill Lynch expects improving bad-debt trends to prompt a revision of forecasts as the City plays catch-up with falling provisions. The broker is looking for $25.1bn (£16.5bn) in bad debts, compared with expectations of over $26bn (£17.1bn), implying a charge of $11.2bn (£7.3bn) for the second half against $13.9bn (£9.1bn) for the first half of 2009.

BofA-Merrill said such an improvement could mean that market hopes of $21.3bn (£14bn) in bad debts in 2010 prove "too bearish", particularly as the global economy improves. It pencils in a figure of $15.6bn (£10.2bn), saying: "We are 30 per cent above consensus in 2010 and would expect the 2009 figures to drive upgrades."

UBS, which sees $26.6bn (£17.4bn) in impairments for 2009, with the second half at $12.7bn (£8.3bn), is also hopeful. "We expect bad debts to fall significantly further in 2010, to $20.5bn (£30.4bn), with half of those accounted for by the household division. We expect reductions in consensus bad-debt expectations to drive upgrades," its analysts said.



Monday: Numis is eyeing "a typically solid set of results" from Ultra Electronics, the defence and aerospace group which is due to issue full-year numbers this morning. "Operating cash conversion for the year is expected to be strong at 101 per cent (88 per cent using Ultra's definition, which includes capital expenditure), leading to a year-end net-debt forecast of £49.6m," the broker said. "Of key interest will be Ultra's guidance. The company cited 'some recent evidence of delays' in UK contract awards in its most recent [update], but we do not expect these to have a material impact on the group's organic growth outlook."

Results/updates – Amlin, Arena Leisure, Hiscox, Tomkins, Pearson, WSP, British Polythene Industries, Senior, Ultra Electronics and HSBC.



Tomorrow: Insurance group Admiral should issue a good set of full-year results, with pre-tax profits up 3 per cent at £209m "despite headwinds of lower investment income and recessionary pressures," according to UBS. "We expect Admiral to confirm positive rate trends at the results," the broker said. "Continued growth is central to the investment case, and a rising rate environment provides conducive backdrop for the group to continue to increase market share in the UK."

Deutsche Bank expects to hear of £1.98bn in sales and £70m in pre-tax profits before exceptional items when the engineering group Cookson posts full-year numbers on Tuesday. The broker does not expect any dividend, saying: "We expect Cookson to finish 2009 with about £450m of net debt though this is very dependent on working capital trends in the fourth quarter."

Also tomorrow, Provident Financial is due to issue full-year results and Evolution is looking forward to a robust performance, forecasting "another set of solid numbers as management continues to deliver on its strategy of measured and risk adjusted growth". Looking ahead, the broker is also positive on the outlook for 2010.

It said: "Having assumed that Provident had a good Christmas period in terms of customer and receivable growth, we expect another year of very measured growth as the UK [macroeconomic] recovery slowly takes hold."

Results/updates – Informa, Jardine Lloyd Thompson, Keller, Meggitt, Persimmon, Rotork, Wood Group, Provident Financial, Cookson and Admiral.



Wednesday: Results/updates – Carillion, International Personal Finance, ITV, LSL Property Services, RPS, Sportingbet, Taylor Wimpey, Unite, Arriva and Standard Chartered.



Thursday: Expectations are likely to running high ahead of Whitbread's trading update this week, with Numis pointing out that the hospitality group has "established an enviable track record of positive surprises" with recent statements.

"The key division for Whitbread is the Premier Inn hotel chain, where we expect continued outperformance relative to the broader hotel market and look for a fall in revenue per available room of 2.5 per cent for the 13 weeks to the end of February," the broker said last week.

Results/updates – Aggreko, Balfour Beatty, Cobham, Galiform, IMI, Partygaming, Schroders, Spirax Sarco Engineering, Spirent Communications, Trinity Mirror, Whitbread, Amec, Aviva, SVG Capital, Robert Walters and Kazakhmys.



Friday: Results/updates – Marshalls, Michael Page International and WPP.

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