Do-it-yourself retailer Kingfisher's first quarter earnings are set to confirm a weather-challenged UK performance and slowing trends in France, according to Jefferies, the US investment bank which bought venerable City broker Hoare Govett earlier this year.
It thinks first quarter sales will be down by almost 4% year-on-year, or down 2% with foreign exchange (forex) movements stripped out. The broker thinks EBIT will be up by 1%.
Comparative figures in the UK are tough, given the weather was better last year and the royal wedding provided an extra bank holiday.
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"Strong progress on the gross margin front should limit the damage," the broker reckons. "In addition, the increasingly variable nature of staff costs is set to have provided further downside protection, particularly in the UK," it added.
Panmure Gordon notes that the first quarter is not particularly an important one for Kingfisher.
"We expect to see an 11% fall in B&Q's like-for-like [LFL] sales, due to the impact of tough comparisons (late Easter, hot weather), compounded by the effect of the rain upon seasonal ranges," Panmure Gordon revealed, adding that April was the wettest in the UK for a century.
"We expect a similar story in France, where April was the wettest for 60 years. Here, we look for a LFL decline of around 1% after a decent start to the year. We expect International markets to be flat in like-for-like terms (strong Russia; weak Poland and Spain)," the broker added.
Sweeteners firm Tate & Lyle said at the end of March that full year results are expected to be in line with expectations, so interest in Thursday's announcement will focus on current trading.
Those expectations are for sales to just skip over the £3bn mark, and for profit before tax to rise to £323.6m from £263m the year before. Earnings per share (EPS) are seen advancing to 55.24p from 45.7p last year, paving the way for an increase in the total dividend from 23.7p last year to around 25p this year.
On the Speciality Food Ingredients side, having recorded some early customers wins in Latin America in the first half of the year, "investors will be looking for signs from management that there are further customer account wins within the near term pipeline, especially as the enhanced sales team becomes more established," according to James Dawson, of Charles Stanley.
"We expect management's tone for the division to be one of moderating expectations given the challenging comparatives that the group will face in 1H2013 [first half of fiscal 2013]," Dawson said.
It is a quiet day on the economic front in the UK, with the GfK Consumer Confidence Survey for May the highlight. In April the confidence level stood at -31, and it is expected to have moved further into negative territory to -33 in May.
QUARTERLY PAYMENT DATE
City of London Inv Trust
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Bloomberg Consumer Confidence (US) (14:45)
Chicago PMI (US) (13:45)
Continuing Claims (US) (13:30)
GDP (Preliminary) (US) (13:30)
Initial Jobless Claims (US) (13:30)
International Reserves (EU) (11:00)
Retail Sales (GER) (07:00)
Unemployment Rate (GER) (08:55)
FINALS
Digital Learning Marketplace, Fulcrum Utility Services Ltd. (DI), Fuller Smith & Turner, Halfords Group, Metric Property Investments, Tate & Lyle
EGMS
Espirito Santo Financial Group SA
AGMS
Alba Mineral Resources, Bisichi Mining, Central Asia Metals, Empyrean Energy, Kenmare Resources, Metminco Ltd., Petropavlovsk, PXP Vietnam Fund Ltd., Tangiers Petroleum Ltd (DI)
TRADING ANNOUNCEMENTS
Kingfisher
FINAL DIVIDEND PAYMENT DATE
Avesco Group, Bilfinger Berger Global Infrastructure Sicav S.A.(DI), EP Global Opportunities Trust, Keller Group, Lookers, Playtech Ltd., Reckitt Benckiser Group, Senior, SQS Software Quality Systems AG, Standard Life, Travis Perkins
Q1
Alpha Bank GDR (Reg S) USD, Frontline Ltd.
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