After Lloyds Banking turned in a decent set of results earlier this week it is the turn of the other part-nationalised bank, Royal Bank of Scotland (RBS), to bring a smile to the face of the tax man, if such a thing is possible.
Credit Suisse said: "Having seen a strong performance YTD [year-to-date] we were disappointed by the scale of the announcement of GBM [Global Banking and Markets] restructuring. Since then the debate has moved on to discussion surrounding government exit strategies, which will likely support the stock in the short term despite sub-sector return profile."
The Swiss bank is forecasting first quarter revenues of £1.85bn for RBS, down 22% year-on-year. It is expecting a loss before tax of £340m and a loss per share of 0.2p.
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"We expect Non-Core assets to decline by 4.5% QoQ [quarter-on-quarter] to £100bn at end Q1 2012," Credit Suisse said.
Rentokil Initial, rat-catcher to Her Majesty, and a big name in wash-rooms up and down the land, is once again expected to have had its performance dragged down by the troublesome City Link courier business in the first quarter.
"City Link will continue to post losses with no signs of improvement likely to be visible until H2 [second half] 2012 at the earliest, while recent euro weakness will put additional pressure on earnings," reckons Panmure Gordon.
The broker is forecasting first quarter revenues of £629m, up from £609.7m last year. For earnings before interest, tax and amortisation (EBITA) it has pencilled in a figure of £37.5m, a smidgen up from last year's £37.2m, while it has forecast adjusted profit before tax of £28.5m, up from £27.4m the year before.
"City Link remains an unresolved issue and we anticipate larger losses of £11.3m at the EBITA level vs. £10.7m last year," the broker said in a preview of the results.
"Improving organic growth in Textile & Hygiene and Facilities Services should drop to the bottom line and we are anticipating improving profitability as a result. Pest Control is likely to see some margin pressure with the US loss making during Q1 due to seasonality with higher margin European operations likely to see some FX [foreign exchange] pressure. It is also important to point out that the segmental split has been reclassified with Australian /New Zealand operations moved into Textile & Hygiene and Pest Control. City Link and Facilities Services are the only divisions to remain unchanged," the broker added.
Across the pond, US non-farm payrolls is, as ever, the first key economic indicator to be released for the preceding month.
Expectations are that payrolls will have increased by 175,000 in April, following on from March's 170,000 increase. The unemployment rate is seen staying at 8.2%.
INTERIM DIVIDEND PAYMENT DATE
Animalcare Group, Asian Citrus Holding
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Non-Farm Payrolls (US) (13:30)
PMI Composite (EU) (09:00)
PMI Composite (GER) (08:55)
PMI Services (EU) (09:00)
PMI Services (GER) (08:55)
Unemployment Rate (US) (13:30)
Dillistone Group, Toumaz Limited
IMI, Laird, Rolls-Royce Holdings, Royal Bank of Scotland Group
SPECIAL DIVIDEND PAYMENT DATE
Asian Citrus Holding
Aer Lingus Group, Globaltrans Investment GDR (Reg S), IMI, John Laing Infrastructure Fund Ltd, Laird, Rolls-Royce Holdings, Smurfit Kappa Group, Toumaz Limited
UK ECONOMIC ANNOUNCEMENTS
New Car Registrations (09:30)
FINAL DIVIDEND PAYMENT DATE
Amino Technologies, Berendsen, Bodycote, Devro, Foresight 2 VCT, Foresight 2 VCT 'C' Shares, London Capital Group Holdings, Nichols, Pearson, Promethean World, SEGRO, Tikit Group, Ultra Electronics Holdings
Lancashire Holdings, Norwegian Property ASA, Smurfit Kappa Group
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