The Week Ahead: TUI Travel cannot escape the turbulence altogether
While Thomas Cook has been engaged in a struggle for its future, fellow operator TUI Travel has been faring rather better. Its bitter rival may have lost roughly 60 per cent of its share price sinceadmitting last month it needed more cash to survive, but over the same period TUI has managed to advance 10 per cent.
Today, TUI issues its first update since its peer revealed trading had deteriorated, and its preliminary results will therefore be keenly watched either for signs that it has been facing a similar slowdown or that it has in fact been given a boost by the developments.
Numis Securities' Wyn Ellis believes it will be the latter, claiming that "future headlines in the press are likely to be disconcerting for Thomas Cook customers" and that they will "book with other brands" as a result, resulting in TUI enjoying its "best summer ever" in 2012.
However, although Charles Stanley's Douglas McNeill says TUI "tends to cope with weak demand better" than its rival, he also warns it cannot "remain entirely unscathed". Aside from this, Mr McNeill will be closely looking at its debt levels, which are expected to have dropped for the second consecutive year, as well as exceptional charges.
The company said in September that it was on track to meet the City's expectations. House broker Royal Bank of Scotland says it could even beat them, predicting earnings of £480m, while adding that it also thinks there will be no major changes to forecasts for the next financial year.
The recent choppy markets have resulted in a number of fund managers suffering from clients pulling out their cash, with Aberdeen Asset Management already having announced back in September that £800m had been withdrawn in July and August. The group starts the week with its preliminary results when, Barclays Capital believes, it will reveal its assets under management for the year have dropped 7 per cent to £165.5bn.
This would represent a further 6 per cent slide from its last update, thanks – say analysts from the broker – to the sharp fall during September in both emerging markets and Asian equities. However, although they predict Aberdeen will "outline industry-wide caution", they still say it remains in a relatively good position thanks to its impressive track record as well as a bias towards institutions.
Results and updates: Aberdeen Asset Management and TUI Travel.
Tuesday brings Northgate's interimresults, which come nearly three months after the UK's largest van-rental business assured investors that it was on line to meet its targets despite the current economic woes. Peel Hunt's analysts believe trading conditions will have held up since then and forecasts a pre-tax profit for the first half of the year of £31.7m – a 17 per cent rise – thanks in part to a number of self-help measures.
Results and updates: EasyJet, Northgate, Victrex and Wolseley.
Carillion unveils its pre-close update on Wednesday. Peel Hunt's Andrew Nussey expects its pre-tax profits for the year to total £210m, thanks in part to "the momentum achieved" over the first half of the year and the synergies resulting from the recent £300m acquisition of the energy-services firm Eaga.
The focus, however, will be on thefuture thanks to the Government's plans to slash solar-panel subsidies, which the company warned last week could result in 4,500 of its staff losing their jobs.
Results and updates: Brewin Dolphin, Carillion, DS Smith, Kesa Electricals, Micro Focus and Stagecoach.
Tesco launched its "Big Price Drop" in September and will be hoping its third-quarter trading statement will show it has reaped the benefits from the £500m price offensive. The supermarket has already publicly made optimistic noises, though Deutsche Bank's James Collins notes management concede that in the short term, they will not have recovered costs. The analyst believes like-for-like UK sales – excluding VAT and fuel – will have fallen 0.5 per cent, an improvement from the 0.9 per cent drop suffered over the last quarter.
Results and updates: Ashtead, Premier Farnell, PZ Cussons, Standard Chartered and Tesco.
Results and updates: None expected.
MONDAY Eurozone retail sales; Eurozone Sentix Investor Confidence; Services PMI;US factory orders; US ISM non-manufacturing PMI.
TOMORROW German factory orders.
WEDNESDAY Manufacturing production; Niesr GDP estimate; US oil inventories; US budget balance.
THURSDAY European Central Bank press conference; Official bank rate; US unemployment claims.
FRIDAY PPI data; Trade balance; US preliminary University of Michigan consumer sentiment; US trade.
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