Contract caterer Compass brings out full-year figures on Wednesday, with the market expecting profits before tax to burst through the billion pounds barrier.
Market consensus is for pre-tax profit of £1.01bn on turnover of £15.6bn. Earnings per share are set to rise to 38.7p from 35.7p last year, while the full-year dividend is tipped to be 19.37p, although broker Charles Stanley goes for a nice round number of 19p with its dividend forecast, which would still be a decent improvement on last year's 17.5p pay-out.
The broker is looking for the company to achieve organic revenue growth of 5% for the whole year, which would mean a flying finish to the year, with more than 4% organic revenue growth in the final quarter. "This year has seen more activity in terms of acquisitions and constant currency revenue growth of about 9% is expected," Charles Stanley analyst Tony Shepard notes.
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"After absorbing the tragic events in Japan and the impact of acquisitions, the operating margin will be flat. In the first half of the year, the operating margin reached 7.2% and possibly there is another 150 basis points of underlying improvement to come over the medium term," Shepard suggests.
"Cash flow conversion has continued to be strong. After £425m spent on acquisitions, net debt at September 2011 is expected to be about £800m compared to £620m a year ago," he added.
Credit Suisse, meanwhile, is enthused by Compass's balance sheet strength. It estimates the caterer will have £2.4bn of balance sheet firepower over the next two years, and suggests that around £1bn of that could be spent on bolt-on acquisitions, while half a billion could be retrned to shareholders, probably via a share buy-back.
Civil engineering consultant Hyder Consulting is not unduly concerned about Britain's sluggish economic performance, as most of its business is overseas.
Indeed, as broker Northland observes, well over half of its earnings before interest and tax come from its Australian business.
The broker had been worried that the severe flooding in Queensland earlier this year would put a crimp on revenue but the consultant's pre-close trading statement allayed many of those fears, with the company saying that orders delayed as a result of the floods were coming through more quickly than anticipated. Nevertheless, the broker would appreciate more information on this front in Wednesday's interim results.
"With the Australian economy remaining robust we would hope for a positive outlook statement for the remainder of the year," Northland added.
"Hyder has one of the highest revenue exposures in the sector to the Middle East (+20%), a region we expect to see considerable growth over the next few years. Any signs of a material improvement in the outlook for the region would be taken positively, although we believe it is potentially too early," the broker opined.
Credit Suisse recently cut its earnings estimates for Daily Mail and General Trust (DMGT), ahead of the publisher and exhibitions organiser's full-year results.
The Swiss broker is expecting the results to be "characterised by relatively unchanged trends on short-term trading with likely continued strong B2B [business to business] momentum yet a tough UK consumer media backdrop, leaving management focused on further efficiencies and continued portfolio review."
Credit Suisse trimmed its fiscal 2011 and fiscal 2012 earnings per share (EPS) forecasts by 10% and 16% respectively, "which broadly re-aligns us with consensus, to reflect the company's 27 September guidance, recent peer group updates and our incrementally more cautious stance on the economic outlook."
Market consensus is for profit before tax of £240.4m on revenue of £1,989m. Earnings per share are seen dipping to 47.31p from 50.0p last year.
Platinum refiner Johnson Matthey issues interim figures that should show a handy increase in profits. Charles Stanley forecasts profit before tax of £185.0m, up from £164.3m at the interim stage last year. Turnover is tipped to rise to £5.2bn from £4.6bn last year. The interim divi could be bumped up by a penny to 13.5p, te broker reckons.
In the group's Precious Metals Products division, Charles Stanley analyst James Dawson believes the focus is "likely to be on the recently revised forecast platinum price range for the next six months from $1750-$2000/oz down to $1450-$1800/oz. The lower end of the range being as a result of the lower point of pricing in the period, recorded in Sep-2011 at $1500/oz."
The minutes of the November meeting of the Bank of England's Monetary Policy Committee (MPC) are likely to reinforce the view that it is a matter of when - not if - the Bank will announce further Quantitative Easing to try and stimulate economic activity after October's £75bn boost, according to Dr. Howard Archer, the oft-quoted economist at forecasting unit IHS Global Insight.
"The recently released Bank of England's Quarterly Inflation Report for November clearly spells out the bank's heightened concerns over the economy," Dr. Archer notes.
The main point of interest in the minutes will be "did any of the nine committee members vote to step up the amount of QE now rather than wait?" suggests Dr. Archer.
INTERIMS
Assura Group Ltd., Hyder Consulting, Mckay Securities, QinetiQ Group, United Utilities Group
INTERIM EX-DIVIDEND DATE
Aseana Properties Ltd., Braemar Shipping Services, Cable & Wireless Worldwide, Charles Stanley Group, Cranswick, Hill & Smith Holdings, Man Group, Metric Property Investments , Morgan Crucible Co, Next, TalkTalk Telecom Group , UBC Media Group, Walker Crips Group
QUARTERLY EX-DIVIDEND DATE
Carnival
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Bloomberg Consumer Confidence (US) (14:45)
Crude Oil Inventories (US) (15:30)
Durable Goods Orders (US) (13:30)
Industrial New Orders (EU) (10:00)
MBA Mortgage Applications (US) (12:00)
Personal Consumption Expenditures (US) (13:30)
Personal Income (US) (13:30)
Personal Spending (US) (13:30)
U. of Michigan Confidence (Final) (US) (15:00)
GMS
Northern 2 VCT
FINALS
Avon Rubber, Bajaj Hindusthan Ltd. GDR (Reg S), Compass Group
SPECIAL EX-DIVIDEND PAYMENT DATE
Narborough Plantations
EGMS
Etalon Group Ltd GDR (Reg S)
AGMS
CAP-XX Ltd., Ceramic Fuel Cells Ltd., Coal of Africa Ltd., Fidelity Asian Values, International Ferro Metals Group, K3 Business Technology Group, Manchester & London Inv Trust, Sabien Technology Group, Thor Mining
UK ECONOMIC ANNOUNCEMENTS
BoE Interest Rate Minutes (09:30)
FINAL DIVIDEND PAYMENT DATE
Edge Performance VCT 'C' Shares, Edge Performance VCT 'D' Shares, Edge Performance VCT 'E' Shares, Edge Performance VCT 'F' Shares, JD Wetherspoon
FINAL EX-DIVIDEND DATE
Dunelm Group, GETECH Group, Henderson Fledgling Trust , Keystone Inv Trust, Northern Venture Trust, Standard Life Equity Income Trust, Ultimate Finance Group, United Drug
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