The Week Ahead: Pub operators make hay while the sun shines

The pub company reporting round continues this week, with Enterprise Inns set to post its interim management statement tomorrow, and Mitchells & Butlers due to follow suit on Wednesday.

Panmure Gordon expects Enterprise to echo the upbeat comments issued by Greene King, Punch Taverns and JD Wetherspoon, with the company likely to draw steam from the good weather and the impact of the football World Cup.

"Greene King has reported 6 per cent like-for-like sales growth in its managed pub operations for the eight weeks to 27 June, with average earnings before interest, tax, depreciation and amortisation ... in its leased and tenanted pubs broadly in line with last year," the broker said, highlighting the read-across. "Punch Taverns reported that it had seen like-for-like sales growth in its managed pub estate during the World Cup. Wetherspoons has reported 1 per cent like-for-like sales growth for the 11 weeks to 11 July."

At Mitchells, the hot weather and the World Cup are "unlikely to have helped trading much" as the majority of its sites are food-led, according to Numis.

That said, the company has "been improving its act" when it comes advertising its brand, incentivising staff, stripping out unnecessary costs, being more efficient in terms of capital expenditure and disposing of non-core assets.

"We believe the risk to forecasts and the share price are on the upside, but this interim management statement may not provide the catalyst," the broker said in a preview that was published last week.

Today

The recruitment firm Sthree is expected to follow in the footsteps of bigger peers Michael Page and Hays when it posts its half-yearly results this morning, according to Numis.

"The outlook statement becomes the crucial factor, with trading over the past six weeks in focus," the broker said. "Following Hays' positive comments about the IT market in Germany, we look for similar noises from management."

Results/Updates: Sthree.

Tomorrow

The bookmaker William Hill is due to issue a second-quarter trading update tomorrow.

Investors will be keen to see how the company has been performing since the first quarter, which saw an across-the-board improvement in trends compared with the first seven weeks of the year.

This time around, William Hill stands to benefit from the World Cup, especially after all those disappointing flutters on England, with Numis pointing out that the contest was "by and large, bookmaker friendly".

Results/Updates: IG Group, William Hill and Enterprise Inns.

Wednesday

Results/Updates: Galiform, GlaxoSmithKline, Blacks Leisure, Land Securities and Hochschild Mining.

Thursday

Kingfisher, the home improvement retailer behind the B&Q chain, is due to issue an update on the second quarter later this week and, if Deutsche Bank is to be believed, investors are likely to be greeted by news of strong progress on the profits front.

The sales picture is expected to be mixed, however, with group like-for-like sales forecast to be flat, compared with a 1.8 per cent decline over the first quarter, but with B&Q and Poland expected to be down 1 and 4 per cent, respectively. In China, on the other hand, like-for-like sales are forecast to be up 10 per cent.

"Since the second quarter does not finish until the end of the month, comments on margins and profits will be directional rather than specific," Deutsche said, adding: "We expect gross margins to be up in all markets, driven by direct sourcing gains and lower promotional activity, and we expect no change to market forecasts for the year."

Also on Thursday, Sports Direct is due to issue full-year figures, with Investec expecting to hear of a "post-World Cup hangover on sales".

In terms of figures, the broker expects earnings before interest, tax, depreciation and amortisation to come in broadly in line with company guidance at £162m. If achieved, that "should be enough to trigger the bonus scheme announced a year ago," according to Investec.

"After a significant fall in interest costs in the first half of the year, we expect the second-half charge to be broadly flat as the company reinvested in inventory ahead of the World Cup.

"This should result in pre-tax profits of £108m – broadly in line with consensus," the broker said, adding that it did not expect a restoration of the dividend at this stage.

Results/Updates: Capita, International Personal Finance, Petropavlovsk, Imperial Tobacco, De La Rue, Sports Direct International, Kingfisher and Mitchells & Butlers.

Friday

Results/Updates: Beazley, Britvic, United Utilities and Vodafone.