Tuesday preview: GKN to report jump in annual revenues

Engineering heavyweight GKN is expected to record a 14.8 per cent rise in revenues when it releases its annual results Tuesday.

Revenues are expected to reach £6.6bn for 2012, compared to £5.7bn posted the previous year.

Shares jumped a day ahead of the results but Nomura has advised investors to remain cautious following a decline in Europe car sales.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

"Although we are in-line with consensus for fiscal year 2012 and weakness in European auto demand has been well-flagged previously, the share price momentum is a slight concern to us, as car sales in Europe declined a further 9.0% year-on-year in January of this year, which we think will prompt a cautious outlook by GKN's management," Nomura analyst Juho Lahdenpera warned in a report released late last week.

"We take a cautious view on the shares heading into the numbers."

Nomura will be focusing on the management's outlook, particularly on how they intend to offset a possible further fall in European demand on Driveline's and Powder Metallurgy's margins.

January car sales in Europe dropped 9.0% year-on-year to all-time lows and the analyst anticipates total regional auto production to decline 4.0% for the fiscal year 2013, compared to the previous year's 2.0% year-on-year decline.

"In addition, the progress of restructuring in Aerospace to integrate Volvo is of interest to us," Nomura added.

"Consensus, like us, looks to give management full credit for its integration plans and any delays would be a downside risk to estimates. The ongoing safety reviews on Boeing's Dreamliner aeroplane are unlikely to have impacted Aerospace production to date, as we understand that Boeing has asked GKN to maintain production rates."

INTERIMS

Asian Citrus Holding, Craneware, Dechra Pharmaceuticals, DotDigital Group, Redrow, Robert Walters, Wilmington Group

INTERIM DIVIDEND PAYMENT DATE

IG Group Holdings

QUARTERLY EX-DIVIDEND DATE

Canadian General Investments Ltd.

INTERNATIONAL ECONOMIC ANNOUNCEMENTS

US Federal Reserve President Ben Bernanke speaks before US Senate (15:00)

Consumer Confidence (US) (15:00)

House Price Index (US) (15:00)

New Homes Sales (US) (15:00)

GMS

Sirius Petroleum

FINALS

CRH, Devro, GKN, Goals Soccer Centres, Provident Financial

SPECIAL DIVIDEND PAYMENT DATE

Rensburg AIM VCT

AGMS

Andor Technology, Bankers Inv Trust, The Commercial Bank of Qatar (Q.S.C) GDR (Reg S), XCAP Securities

TRADING ANNOUNCEMENTS

Mail.ru Group Ltd GDR (Reg S), Whitbread

UK ECONOMIC ANNOUNCEMENTS

CBI Distributive Trends Surveys (11:00)

Speech from BoEs Paul Fisher at University of Bristol Alumni, London (18:30).

Speech from Mervyn King to Japanese Bankers Association, Tokyo (06:00 GMT).

RD