The Week Ahead: Analysts want Absolut news on Diageo's plans
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Your support makes all the difference.The drinks group Diageo releases interim results on Thursday, with analysts anxious to see how its acquisition and investment strategies will pan out over the coming months.
The owner of brands such as Johnnie Walker, Guinness and Smirnoff has already announced that it intends to buy the Swedish vodka brand Absolut, but two other takeovers are less certain. There have been hints that it may launch a bid for the remaining 66 per cent stake it does not already own in the French champagne and fashion house LVMH. There has been ongoing speculation that the group would try to buy Scottish & Newcastle.
Although the company has reiterated its desire to consolidate a stronger position in the beer industry, analysts see a bid for the biggest UK brewer as increasingly unlikely.
Evolution Securities analyst David Hallam is expecting the group to emphasise its strong organic growth prospects, which are being driven by innovative new product developments and a focus on fast-growing emerging markets such as Brazil, Russia, China and India. He forecasts a rise in profit before tax by 11 per cent to £2.015bn, marginally above market consensus.
TODAY: Results : Full Year - Indago Petroleum.
TOMORROW: Avis Europe has been on the back foot for much of this year, battling difficult trading conditions in many of its global operations, shrinking profits from ongoing brand restructuring costs and the June investigations into possible financial malpractice in its Portuguese branch. The Bracknell-based company, which operates the Budget and Avis brands in Europe, Africa, the Middle East and Asia, has been consistently downbeat about car rental pricing in comparison with its more optimistic rivals Sixt and Hertz.
James Solomon, analyst at JPMorgan, said: "There is value in the business but the margins need to be unlocked. We will be focusing on the company's outlook for the industry and whether they are planning to stick to original growth targets." Due to disposals of assets, he refrained from making any profit forecasts.
Results: Full Year - Dicom Group. First Half - Avis Europe; Bunzl; John Wood Group.
WEDNESDAY: After BHP Billiton's strong results last week, the Chilean copper mining group Antofagasta will be eager to show investors it has similarly robust credentials. Simon Toyne, an analyst at Numis Securities, expects net profits to be slightly ahead of consensus at $692m, which would be up 6 per cent from last year.
The regional newspaper group Johnston Press, which owns the Lancashire Evening Post and operates several local websites, is expected to announce a decline in advertising revenue over the last few months. But the company should stress that the rate of decline of revenue is diminishing and may release a relatively positive outlook statement.
Results: First Half - Antofagasta; Ark Therapeutics Group; Boot Henry; G4S; Johnston Press; Logica CMG; Melrose Resources; PartyGaming; Segro; Wellstream Holdings.
THURSDAY: Brighter prospects may be in store for the specialist academic and scientific information publisher Informa. After reporting a 54 per cent jump in profits in May, the company bought market intelligence firm Datamonitor for £502m in June. Numis analyst Lorna Tilbian expects revenue to grow by 3 per cent, and pre-tax profits of £92m.
Rank Group, the gaming and gambling group, is facing a tough time as the UK smoking ban starts to bite at its Mecca bingo halls. Nigel Parsons of Evolution Securities views the group as being on a "road to nowhere" and has downgraded it to sell status.
If experience from Scotland is any guide, the smoking ban could reduce bingo sales by up to 17 per cent. Casinos are also a worry. Evolution expects pre-tax profits of £28.1m, down 6.4 per cent from last year.
Results: Full Year - Diageo. First Half - Amiad Filtration Systems; Amlin; Atrium Underwriting; Axis-Shield; BBA Aviation; Filtrona; Hunting; Informa; Rank Group ; Serco Group; UTV; Vislink.
FRIDAY: While the UK's largest property finding website Rightmove would not be immune to a major property slump, an analyst said the current slowdown in market activity could be beneficial. With available inventory taking longer to sell, more marketing would be required. Consensus estimates for its interim results show pre-tax profits up almost 60 per cent, with an analyst saying "the group has considerable opportunity ahead of it, underpinned by rising customer numbers and pricing power".
Results: First Half - Davis Service Group; Rightmove; Vycon.
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