THE WEEK AHEAD
Monday 11 December 1995
Interims: Greene King, Kenwood Appliances, Pelican Group, Carclo Engineering, Court Cavendish, Drew Scientific Group, Dunedin Enterprise Inv Trust, Firstbus, Prior, Vtech Holdings, Wynnstay Properties
Finals: Airtours, Allders, API Group, Dwyer Estates, Electronic Data Processing, Greencore Group, Hardys & Hansons, Hawtin, Invesco Recovery Trust, Johnson & Firth Brown, Richards, Whessoe
AGMs: Benson Group, Beverley Group, Gartmore European Trust, Mercury Keystone Trust, J D Wetherspoon.
Kicking off a heavy week for economic statistics, the rate at which manufacturers' costs are growing is expected to have slowed again to around 7 per cent in November, although analysts do not think the month-on-month drop in October will have been repeated. Further along the inflation pipeline, prices charged by producers at the factory gate are expected to show a small rise, taking their annual rate of increase a shade below October's 4.6 per cent.
Northern Electric's results are unlikely to hold any surprises on the dividend front following the aggressive defence package announced earlier this year in the wake of the bid from Trafalgar House. Profits will be down because of the effect of two reviews of the electricity distribution price control by the regulator, Offer, but earnings per share will be buffered by a reduction in the average number of shares. Pre-tax profits are expected to be about pounds 52.4m and earnings per share 39.6p. The company is the most highly geared in the sector as a consequence of the bid.
Interims: Northern Electric, Berkeley Group, British Land, Cray Electronics, Baring Emerging Europe, Creighton's Naturally, Halma, Oceana Consolidated, Precoat Intl, Schroder UK Growth, Stewart & Wight.
Finals: Stakis, Titon Holdings, Vaux Group, Dunedin Smaller Companies Inv Trust, Dunedin Worldwide Inv Trust, Eurocopy, Hunters Armley, Sheriff Holdings, Slimma.
AGMs: DFS Furniture, James Dickie, Dorling Kindersley, Intereurope Technology, Millwall, Orb Estates, Schroder Income Growth, Scottish National Trust.
EGMs: Orb Estates.
Construction: new orders (Oct). US producer price inflation is expected to have slowed below 2 per cent in November.
Interims: Chubb Security, East Midlands Electricity, Birkby, HP Bulmer Holdings, First Technology, Hamlet Group, MFI Furniture, Ovoca Resoures, David S Smith, Worthington Group.
Finals: Apollo Metals, Baggeridge Brick, Chemring Group, Grainger Trust, New Zealand Investment Trust, Widney.
AGMs: AG Holdings, BMG Charles Sidney, Fleming Japanese Trust, Glasgow Income Trust, Kwik Save Group, Morgan Grenfell Equity, Town Centre Securities.
The key event of the economic week is the monthly monetary meeting between the Chancellor of the Exchequer and the Governor of the Bank of England. Financial markets have priced in a quarter point cut in base rates, although City economists reckon there is only a 50-50 chance of this happening. The Chancellor will give evidence on the Budget and the economy to the Treasury Select Committee.
November figures for retail sales, unemployment (for November) and average earnings (for October) are also due. City analysts expect a reasonable increase in retail sales, following last week's buoyant CBI survey of the high street. After a small rise in unemployment in October, a small fall is expected for November - and possibly the revision of the previous month's increase.
Asda Group is expected to announce half-year pre tax profits up 22 per cent to pounds 135m and an increased dividend up 21 per cent to 2.69p. Sales growth should grow 13 per cent, marking the peak in the Asda sales growth cycle, while underlying costs will only go up by 1 per cent, thus driving future operating margins ahead.
Southern Water is the last water company to announce but unlikely to disappoint. The company is expected to clarify its plans for balance sheet restructuring.
Interims: London Electricity, Scottish Hydro-Electric, Southern Electric, Albrighton, Bristol Water Hldgs, CRT Group, Eastern Electricity, Ensor Holdings, Five Arrows Currency Fund, MS International, Phonelink, VideoLogic Group.
Finals: Daily Mail & General Trust, M&G Group, Securicor Group, Care UK, SEP Industrial Hldgs, CA Sperati.
Retail prices are expected to show a rise in November after the unexpected fall in October. The market view is that the target inflation measure, the RPI excluding mortgage interest payments, will stay around October's 2.9 per cent rate, above the 2.5 per cent target. The Bundesbank council meets for the last time before Christmas. A quarter to half point cut in key rates is likely, but perhaps not until the New Year.
Interims: Yorkshire Electricity, Eliza Tinsley, Forminster, Moorgate Smaller Company's Inv, TR Technology.
Finals: Trafalgar House, Barcom, First Russian Frontiers.
Wrapping up the week, the CBI monthly trends survey for December is likely to confirm the weakness of the manufacturing sector. Analysts are keeping an eye on the rising balance of firms expecting to raise prices, although some of the recent upward trend is seasonal.
Sources: NatWest Securities, Deutsche Morgan Grenfell.
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