The Week Ahead: TUI looks set to restore holiday feel-good factor
Monday 08 August 2011
The recent troubles at Thomas Cook also knocked the share price of its rival TUI Travel, and this week investors will find out the extent to which the latter has been affected by the same sort of issues.
Last Wednesday Thomas Cookannounced that not only had its third-quarter operating profit dropped by over 20 per cent but that its chief executive Manny Fontenla-Novoa was leaving after overseeing three profit warnings in less than a year.
The last of these came in July, when the company blamed both the economic climate in the UK as well as therecent turmoil in North Africa and the Middle East.
However, analysts remain confident that when TUI releases its figures for the third-quarter on Wednesday, it will reassure investors it has remained on track. Numis Securities' Wyn Ellis is among the bullish voices, saying its "more upmarket brand image, a higher proportion of differentiated product and a stronger relative position in the Spanish destination market" means it will have held up better than its peer.
Panmure Gordon's analysts, meanwhile, do expect TUI to have been knocked by a weak French market, but they also believe its UK performance will not be as bad as Thomas Cook's, and they are forecasting a profit-before-tax for the full-year of £349m.
Meanwhile, Deutsche Bank's Simon Champion believes it will be the company's own profits guidance that will prove key, given the fact that by the time of the results it "should ... have visibility on trading for the rest of the year to September".
Before last week's sell-off across the markets, Telecity's share price had more than tripled since the start of 2009, helped by the growing popularity of cloud computing technology. Further signs of growing demand for the services of Europe's largest data centres group came last Monday when it confirmed it was in discussions over a possible takeover of its Irish peer Data Electronics.
Today the group releases its interim numbers, and JP Morgan Cazenove believes the update will "provide another marker along its growth story". The broker's analysts predict its revenue for the six months will have risen to £111m, although they are not expecting "any overtly aggressiveoutlook statement leading to material upgrades."
Results / Updates: Telecity.
InterContinental Hotels announces its interim results on Tuesday, and Panmure Gordon is rather optimistic after what it believes has been a positive run-up. As well as the reworking of the hotel group's tie-up agreement with the real-estate investment trust Hospitality Properties and the appointment of a new chief financial officer, the broker also points to encouraging industry data from the US.
Panmure's analysts are expecting its earnings before interest and tax for the second-quarter to come in at $138m, pretty much unmoved from the same period last year, thanks in part to recent world events such as the earthquake and tsunami in Japan. Investors hoping for news on a potential sale of its Barclay hotel in New York, however, are likely to be disappointed, they say, although they still believe "a disposal will be announced before the year-end".
Results / Updates: Greggs, InterContinental Hotels and InternationalPower.
With a number of its global peers having already released figures, Standard Life continues the insurers' reporting season on Wednesday with its first-half results. JP Morgan Cazenove is looking out for its "sales growth, especially in the UK pension business", and predicts IFRS operating earnings for the whole group of £189m, which would equate to a year-on-year increase of 4 per cent.
Results / Updates: Interserve, Standard Life and TUI Travel.
After missing analysts' forecasts with its four-quarter production figures at the end of last month, Aquarius Platinum releases its full-year results on Thursday and although the price of platinum is currently very strong, Evolution Securities warns that this "shouldn't fool investors into believing this translates into strong earnings".
The broker is forecasting a gross margin for the 12 months of 24 per cent, a significant retreat from previous years, thanks in part to the South African rand strengthening and rhodium prices moving down. Nonetheless, it still expects the group's profits-before-tax to have more than doubled, rising to $181m, with its sales reaching $666m.
Results / Updates: Aquarius Platinum.
Results / Updates: EnQuest.
BRC sales monitor; Industrial production; Manufacturing output; RICS house price balance; Trade balance; US FOMC rate announcement.
Bank of England inflation report; US crude oil inventories; US federal budget balance.
ECB monthly report; US trade balance; US unemployment claims.
US business inventories; US preliminary University of Michigan consumer sentiment; US retail sales.
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