The Week Ahead: EasyJet flying high but oil price lurks on horizon
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Your support makes all the difference.Investors in easyJet are fastening their safety belts as the group is expected to report soaring profits this week. It has been a good month for the budget airline, after it secured the deal to buy GB Airways from Bland Group for £103.5m. This strengthens its position at Gatwick, as it now has 24 per cent of the landing slots at the airport.
The market is waiting to see if it can deliver growth of between 40 and 50 per cent profits this year as announced at its third quarter results. The growth in returns has been driven by more planes to more routes, as well as ancillary sales such as sandwiches and car hire. On the downside, there will be careful note made of the effect of the rising price of oil, something that has caused concern across the sector.
TODAY: Care UK group took a hit at the back end of last week but numbers are still expected to be in line today. Shares in the healthcare group fell 30 per cent on Thursday, as the Department of Health asked one of its subsidiaries to voluntarily terminate its West Midlands Diagnostics contract, worth £30m per year.
Results: Full Year – Care UK, RM. Half Year – Cranswick, Detica Group, Hamworthy, Workspace Group. Third Quarter – Renesola. Trading Update – Barratt Developments. AGM - Hansard.
TOMORROW: It has been a tough time for UK financial services groups in the wake of the Northern Rock crisis, and Paragon Group's shares have taken a pasting this summer. It has fallen from almost 600p in April to as low as 196p this month. The group indicated in September that its second-half results would be at the top end of the market expectations but investors will be more concerned about management's views on the state of the market and its outlook for 2008.
One stock that has been sitting relatively pretty on the top tier during the credit crunch is Icap. The inter-dealer broker is seen as a defensive stock in volatile markets and it is expected to provide news tomorrow of a solid first-half performance.
The effects of the smoking ban have worried investors in pub groups, but KBC Peel Hunt reckons Enterprise Inns group shouldn't be hurt too badly by the legislation. The consensus estimate is pre-tax profits of between £297m to £308m.
SSL International should report on a solid top line in the first half, with the management reiterating full-year profit targets, according to Evolution Securities. It expects like-for-like growth of 9 per cent, driven by its main global brands Durex and Scholl.
The industrial oven and fridge maker Enodis has been a renewed focus of takeover talk recently. It fought off several bids last year, and the shares were up again after speculation of a further bid emerged in Oct-ober. It received some welcome support from Investec, which said the company was better quality than its rival Aga Foodservices and that any potential suitor would have to top last year's 220p-per-share bids to have any chance of securing the group. Analysts are forecasting pre-tax profits of £70m, up from £64m in 2006.
Results: Full Year – Chrysalis Group, easyJet, Enodis, Enterprise Inns, Fountains, Paragon Group. First Half – Bango, Cropper, CML Microsystems, Icap, ILX Group, Tribal Group, Hogg Robinson Group, Oxford Instruments, Prostherics, SSL International, Synergy Healthcare. AGM – Smiths Group. Trading Update – Scottish & Newcastle.
WEDNESDAY: The consensus for Daily Mail & General Trust's pre-tax profits this year is at £289.7m, up from £259.7m in 2006. While the group's share price has fallen 17 per cent over the past two months, Merrill Lynch is backing the stock as one of the best in the sector. It said the current share price represents only a slight premium to UK newspaper rivals, but that the group generates 53 per cent of profits from higher growth non-newspaper assets.
Results: Full Year – Daily Mail & General Trust. First Half – Silverjet, Thus, Top Ten Holdings, Tribal, Trifast, Pay Point, Victoria. Trading Update – French Connection.
THURSDAY: The UK ret-ail sector had a pretty poor run this summer, as inc-reasing interest rates and the rain kept people off the high street. The market will be watching Halfords' res-ults closely as it is seen as one of the sector's defensive stocks.
Mothercare agreed to buy the Early Learning Centre this year, and investors will look to see how the integration is progressing. Dresdner Kleinwort expects the acquisition to distort the group's first-half profits, with operating profits of £11.2m, offset by a loss from ELC of £3.5.
Results: Full Year – Claimar Care Group. First Half – First Property Group, Halfords, Mothercare, Phoenix IT Group. Third Quarter – Kesa Electricals. Trading Update – Acambis, Galiform, Morrison Supermarkets.
FRIDAY: Results: First Half – Business Systems Group Holdings, Fuller Smith & Turner, GCap Media, Renold
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