The Week Ahead: Thomas Cook expected to reveal Egypt cost
Monday 07 February 2011
Following an update last week from Tui Travel in which it said the turmoil in Egypt – plus the recent unrest in Tunisia – could cost it £30m, Thomas Cook should tell the market tomorrow how it expects to be affected when the tour operator releases its interim management statement.
Wyn Ellis of Numis Securities estimates that the two countries contribute roughly 8 per cent of Thomas Cook's sales, but points out that "the vast majority of these ... will not be lost [as] many customers will book holidays in other destinations."
More generally, the group will be hoping to follow on from the positive comments of its blue-chip peer regarding trading for the summer period. "We expect Thomas Cook to be relatively upbeat about trading in Germany," said Mr Ellis, "but the outlook in the UK remains highly uncertain and UK profitability may be under some pressure."
Bellway's trading statement, set to be released today, will be an opportunity to find out how the first-half period has been going for the housebuilder. Analysts from Panmure Gordon are expecting that it will have "remained challenging", while saying that "any observations on trade during the early weeks of the spring selling season will be an interesting guide."
Results/Updates: Bellway, Randgold and St Modwen Properties.
Fourth-quarter numbers from BG Group are out tomorrow, and an increase in UK gas prices is expected to have lifted the company's profits for the period. Tony Shepard of Charles Stanley is predicting earnings over the three months of $950m (£590m), as well a final dividend of 11.2 cents, leaving the year's total at 21 cents per share.
The analyst remains a fan of the oil and gas explorer, saying that although its "rating looks full, BG Group is moving into a high-growth phase which should more than justify [it]".
Results/Updates: Beazley, BG Group, McBride, Thomas Cook, Wolfson Microelectronics and Xstrata.
Reckitt Benckiser reveals its full-year results on Wednesday, and Royal Bank of Scotland does not expect much change in the fourth-quarter from the previous nine months.
The broker's analysts forecast an underlying sales growth in the British consumer goods' base business of just over 5 per cent, mainly propelled by a stronger performance in its developing markets as opposed to Europe and North America.
Future, whose range of magazine titles include T3 and Total Film, is expected to reveal "a continuation of the improving trends highlighted in November's [update]" in its interim management statement, according to Altium Securities. Then, the group announced that both its advertising and circulation had increased in the first six months, while its US business managed to post a profit again.
Another media company announcing its latest figures on Wednesday is DMGT. Gareth Davies, an analyst at Investec, which has chosen The Daily Mail publisher as one of its key picks in the sector, sees 2011 "as an important year in DMGT's continued evolution".
Mr Davies speculates that it could sell its Northcliffe Media unit this year, which he says is "the only real drag on revenue growth", and the analyst is expecting the company's interim management statement for the first quarter to still show the "good trends" seen in the previous three months.
Results/Updates: Cable & Wireless Communications, CSR, DMGT, Future, Quintain, Reckitt Benckiser and Telecity.
With Rio Tinto announcing its full-year results on Thursday, Nick Raynor of the Share Centre believes "investors are starting to get slightly concerned with the wealth and cash balances that the larger mining companies have at hand".
He says they are eager for either an increase in dividends or share buyback schemes, and therefore hopes "to see some rewards for investors in [Rio Tinto's] figures".
Also updating the market is Smith & Nephew, the medical-device manufacturer which has frequently been the subject of takeover speculation in recent months.
Charles Weston of Numis Securitie expects its knee business to show strong growth after a recent advertising campaign, while in endoscopy and wound management he sees "little reason for third-quarter trends not to have continued into the fourth-quarter – arthroscopy repair products and negative pressure wound therapy remaining the drivers, respectively".
Results/Updates: Aquarius Platinum, Catlin, Diageo, Hargreaves Lansdown, Rio Tinto, Rolls-Royce, SAB Miller, Shire, Smith & Nephew.
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