The Week Ahead: Lloyds figures unlikelyto cheer their ailing boss

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The Independent Online

It has been a rather eventful run-up to Lloyds' latest set of figures. As well as the many twists and turns of the eurozone debt crisis drama, plus updates from its UK rivals Barclays and Royal Bank of Scotland, there was also the small matter of theannouncement last week that its chief executive, António Horta-Osório, is taking a temporary leave of absence.

If Credit Suisse is right, his health will not exactly be improved by the group's third-quarter update this Thursday. Forecasting "weak results", the broker's analysts expect Lloyds to unveil a 9.6 per cent drop in total income from the previous quarter to £4.7bn, contributing to a netattributable loss of £90m. One of the key issues, according to Nomura's Robert Law, will be impairments, and the analyst – noting he is rather more pessimistic than some of his peers in the City – is expecting them to total £2.7bn over the quarter.

He also warns of potential downside to Lloyds' implied margins guidance of 198bps for the second-half of the year, saying that "given the worsening outlook we assume margins of 195bps" over the period.

Meanwhile, analysts from CreditSuisse believe the numbers themselves will not actually be that important.Instead, they are keener to hear "guidance given in terms of how the bank plans toaddress current market conditions", picking out the issues of funding and deleveraging in particular.


Rat-catcher Rentokil Initial starts the week with its third-quarter figures, and once again it will be its struggling City Link operation that will be closely watched. JP Morgan Cazenove expects there to be some improvement at the parcels business given easing comparables, and forecasts a loss over the period of £2m from the unit – a £4m improvement from the previous three months. The broker does expect City Link to return to profit in the final quarter of the year, although it also warns that the poor outlook for the UK economy means there could be further downside ahead.

Results/updates: Hiscox, Rentokil Initial, Taylor Wimpey, Telecity and Weir.


Marks & Spencer releases its interimresults on Tuesday after being hit last week by a number of analysts downgrading their expectations. Among them was HSBC's Paul Rossington, who cut his full-year general merchandise sales forecast to a like-for-like jump of 0.3 per cent, having previously predicted 1.7 per cent.

He expects the second quarter to show a drop in sales of 3 per cent. The final half of the year, meanwhile, will be "contingent on lower underlying consumer demand", adds Mr Rossington, warning over households in the UK adapting "to challenging [macroeconomic] conditions through lower spending and increased propensity to save".

Results/updates: Associated British Foods, AZ Electronics, Babcock, Capital & Counties Properties, Hammerson, Hardy Oil & Gas, InterContinental Hotels, Lloyds Banking Group, Marks & Spencer, Persimmon, Phoenix Group, Prudential, Segro and Vodafone.


As well as releasing its third-quarter update, Admiral is also holding an investor day on Wednesday which Nomura hopes management will use to address a number of concerns, including a recent surge in bodily injury claims seen by the sector.

After its interim results back in August, the insurer lost nearly 17 per cent in just two sessions, but analysts from the broker believe that now – with "a lot of the negative sentiment [seemingly] priced in" – the figures "could be a positive catalyst".

Another updating the market on Wednesday is Sainsbury's, and – say Evolution Securities' analysts – the results "are unlikely to offer any respite from the woes of the current industry climate".

Results/updates: Admiral, Cobham, First Group, HSBC, Moneysupermarket, Sainsbury's, SIG, SSE, Talvivaara, Tullow Oil.


Results/updates: BBA, Cookson, Dairy Crest, Eurasian Natural Resources, Euromoney, Experian, Halfords, Howden Joinery, IMI, Land Securities, Morrisons, Restaurant Group, Rightmove, Schroders, Synergy Health, Vedanta, Yule Catto.


The week is closed by Spectris, with the electrical engineer giving its interim management statement. Numis' Scott Cagehin expects the company to have enjoyed a "strong third quarter with robust demand", and is positive for the future too.

Results/updates: Rolls-Royce, Spectris.

Economics Diary

TODAY Eurozone retail sales; Eurozone Sentix investor confidence.

TOMORROW UK manufacturing production data; National Institute of Economic and Social Research GDP estimate.

WEDNESDAY UK trade balance.

THURSDAY Bank of England interest rate decision; European Central Bank monthly bulletin; US consumer confidence data; US trade balance; US unemployment claims.

FRIDAY UK producer price inflation data; US University of Michigan consumer sentiment.