The Week Ahead: Kingfisher weathers hard times to surprise market

Kingfisher, the home improvement retailer behind the B&Q chain, may surprise the market with news of better-than-feared quarterly trading this week.

In the UK, the weather has caused some concern about the strength of business over the start of the year, with Liberum Capital terming the conditions "remarkably unhelpful" for B&Q. That said, the performance may not be as bad as some expect, the broker said, noting that mortgage approvals were up by an annual rate of 25 per cent over the first quarter and planning applications, which in the past have "shown a good correlation with B&Q's like-for-like [LFL] sales", "should now be heading into moderately positive" territory in year on year terms. As a result, Liberum's pencilled in a 2 per cent fall in B&Q's first quarter LFL sales, the same as UBS, whose analysts point out that, if achieved, the result would be in line with news from rival DIY chain Wickes. Investec is less optimistic, expecting the chain to post a LFL sales decline of 3 per cent, reflecting the poor weather and the tough comparative from last year when, boosted by favourable weather conditions, B&Q booked a 2.9 per cent rise over the first quarter.

Looking ahead, though the outlook for the UK consumer remains uncertain, Deutsche Bank said investors should recognise the support provided by the recent improvement in housing activity. "House moves are running 30 per cent up on the last year (in the last three months) and house owners continued to benefit from [the] lowest ever mortgage rates, so we expect investors to recognise [that] increasingly there are less reasons to worry about UK DIY than most other consumer markets," the broker said.

Today – Northern Foods, the maker of Fox's Biscuits and Goodfella's Pizzas, will post full-year figures this morning. The group's already posted like-for-like revenue growth of 1 per cent, prompting Panmure Gordon to forecast flat reported revenues of £976m, with an 8 per cent slide in clean pre-tax profits to £36m, against a consensus estimate of just under £37m. Elsewhere, the broker is looking for a 1 per cent decline in earnings before interest, tax, depreciation (EBITDA) and amortisation to £52m, which equates a group EBITDA margin of 5.3 per cent.

Results/Updates – Volex and Northern Foods.

Tomorrow – Numis is expecting no surprises from Hamworthy, the industrial engineer which is due to post its annual results tomorrow. The company issued a trading update at the start of April, and the broker expects the release to confirm that the business has been performing in line with expectations, "highlighting a weaker climate for original equipment but robust aftermarket activity". There is unlikely to be any noticeable boost in the pace of orders, the broker added, forecasting £225m in full-years sales, with £19m in pre-tax profits and 30.6p in earnings per share.

"Longer term, while it is difficult to determine when activity levels will recover, we believe newsflow should become incrementally positive as the year unfolds," Numis said. "Therefore, [2011] should represent the trough year for Hamworthy and we remain positive on the long-term prospects given its exposure to environment legislation-driven markets, a robust aftermarket business and its strong cash position."

Results/Updates – Alterian, Topps Tiles, Northumbrian Water and Hamworthy.

Thursday – Johnson Matthey, the world's largest supplier of catalytic converters, will issue its full-year figures later this week and City analysts expect underlying pre-tax profits to come in anywhere between £238m to £273.4m. JP Morgan Cazenove expects the release to be upbeat, with an encouraging outlook to boot. "The outlook is likely to reflect generally better trading conditions in autocatalysts for both car and trucks, and the benefit of more robust PGM [platinum group metals] prices," the broker said, adding that, with "a robust first half" in prospect for 2011, "investors should be encouraged by these results". Citigroup also expects the company to be "more sanguine" about the road ahead, highlighting the beneficial impact of rising PGM prices.

"Johnson Matthey's state sensitivity to PGM prices is that a 10 per cent in the average annual PGM basket price adds £3m to [it's] annual group earnings before interest and tax," Citi said. "In our view, however, this understates the sensitivity, since it ignores the fact that rising PGM prices [are] usually linked to rising demand for JM's products."

Results/Updates – Helical Bar, Redhall, Synergy Health, Johnson Matthey and Kingfisher.

Friday – Toy-maker Hornby is due to post annual numbers at the end of this week and, given that the company issued an encouraging pre close update just weeks ago, the focus is likely to be on the outlook. Numis expects news on the product pipeline to be among the talking points on the day. The opportunities presented by the London Olympic Games are also likely to attract interest, as Hornby holds a license to develop and market a range of products to go with the events.

Results/Updates – Hornby and SThree.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Books should be for everyone, says Els, 8. Publisher Scholastic now agrees
booksAn eight-year-old saw a pirate book was ‘for boys’ and took on the publishers
Life and Style
Mary Beard received abuse after speaking positively on 'Question Time' about immigrant workers: 'When people say ridiculous, untrue and hurtful things, then I think you should call them out'
Life and Style
Most mail-order brides are thought to come from Thailand, the Philippines and Romania
Life and Style
Margaret Thatcher, with her director of publicity Sir Gordon Reece, who helped her and the Tory Party to victory in 1979
voicesThe subject is being celebrated by the V&A museum, triggering some happy memories for former PR man DJ Taylor
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

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Business Analyst - Financial Services - City, London

£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

Day In a Page

General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence
Public relations as 'art'? Surely not

Confessions of a former PR man

The 'art' of public relations is being celebrated by the V&A museum, triggering some happy memories for DJ Taylor
Bill Granger recipes: Our chef succumbs to his sugar cravings with super-luxurious sweet treats

Bill Granger's luxurious sweet treats

Our chef loves to stop for 30 minutes to catch up on the day's gossip, while nibbling on something sweet
London Marathon 2015: Paula Radcliffe and the mother of all goodbyes

The mother of all goodbyes

Paula Radcliffe's farewell to the London Marathon will be a family affair
Everton vs Manchester United: Steven Naismith demands 'better' if Toffees are to upset the odds against United

Steven Naismith: 'We know we must do better'

The Everton forward explains the reasons behind club's decline this season
Arsenal vs Chelsea: Praise to Arsene Wenger for having the courage of his convictions

Michael Calvin's Last Word

Praise to Wenger for having the courage of his convictions