The Week Ahead: Will the predators come back for Sainsbury's?
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Your support makes all the difference.The recent collapse of a takeover approach for J Sainsbury by the Qatar-backed fund Delta Two wiped £2bn off Sainsbury's market capitalisation in one day. Investors will be hoping for good news in this week's interim results to get the shares moving in the right direction again.
Evolution Securities believes the numbers should prove reassuring, despite the summer washout and difficult comparatives. It expects a 4.5 per cent bump in sales to drive pre-tax profits to £240m.
The broker said the bid process would have been time-consuming and demotivating for the management, but they will this week emphasise that the supermarket is on track for its three-year strategic overhaul. And of course Delta Two could always come back in six months.
TODAY: Aveva, which provides plant design systems for companies that build ships, oil rigs and nuclear plants, has been a strong performer over the past couple of years and remains one analyst's favourite to continue its momentum. Panmure Gordon said the recent announcement of a contract with Korea Shipyard had led it to upgrade its target price to 1182p ahead of today's results.
The Scottish group Robert Wiseman Dairies is expected to report pre-tax profits of £17m at its interims. The market is not expecting any shocks, despite the rises in raw milk prices, as most of these have been recovered from customers.
Results: Full year – Carr's Milling Industries. Half year – Aveva Group, DCC, Liontrust Asset Management, Latchways, Majestic Wine, Walker Crips, Volex Group, Robert Wiseman Dairies.
TOMORROW: The telecoms giant Vodafone is to report interims, and the market will be watching closely after a topsy-turvy year for the group. While it has endured some trying issues, the group's shares rose to six-year highs last month.
It faced calls from rebel shareholders to to sell its stake in Verizon Wireless as well as consider breaking up the group, and was disappointed to miss out on the contract to sell the iPhone. On the plus side, it secured Hutchison Essar to boost growth in India, and is showing progress in emerging markets. While revenues are expected to be up slightly, adjusted operating profits are expected to fall 3 per cent to £5bn.
Another telecoms group to report its interims is Cable & Wireless, with the management expected to update investors on the progress of its overhaul.The consensus estimate for the half-year pre-tax profit is £98m.
British Energy Group was last month forced to admit that plant problems could leave two stations off line for the rest of the financial year. The market will be expecting further updates on its progress on getting the units up and running, somewhat overshadowing the interim numbers.
Deutsche Bank expects solid first-half results with earnings before interest, tax, depreciation and amortisation up from £481m last year to £499m.
Results: First half – Babcock International, BritishEnergy Group, Cable & Wireless, Emap, Great Portland Estates, Kewill Systems, Northern Foods, Vodafone Group, VT Group. First quarter – Energy XXI Bermuda. Third quarter – Smurfit Kappa.
WEDNESDAY: Results:Full year – Dimension Data Holdings, Lonmin, NordAnglia Education. First half – Avocet Mining, Bank of Ireland, Burberry Group, Business Post Group, J Sainsbury, Land Securities, Rensburg Sheppards, Scottish & Southern Energy, Thus Group.
THURSDAY: The markets have been toasting SABMiller's recent move into the US, as it tied up its operations across the Atlantic with Molson Coors. Consolidation talk has continued in the drinks sector with Carlsberg and Heineken launching a long-anticipated move for Scottish & Newcastle last month. SAB is expected to become involved in this takeover saga before long, although management is likely to be tight lipped on Thursday. The consensus figure for its adjusted pre-tax profits for the first half is $1.7bn up from $1.5bn, driven by a growth in lager volume of 11 per cent.
In the wider UK markets, traders will be watching Thursday's retail sales figure with interest. Ryan Kneale, analyst for BetsForTraders.Com, said: "Despite the relatively high interest rates in the UK and the signs of economic slowdown, the British consumer is still spending heavily, and this has been the main stumbling block for the Bank of England's policy-makers that want to make imminent rate cuts."
Results: Full year – Bionostics, Daily Mail & General Trust, Euromoney Institutional Investor. First half – British Land, Experian Group, Investec, IT IS Holdings, London Stock Exchange, National Grid, SAB Miller, Telent, Vedanta Resources, Young & Co's Brewery. Third quarter – Eurocastle Investment.
FRIDAY: Results: First half – ContentFilm, Media Square.
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