A week in advance. 26th May - 30th May 2008
By Keith Bowman | 23 May, 2008
A week in advance
Our Equity Analyst, Keith Bowman provides you with his summary of what to look out for in the coming week.
This coming week sees both UK corporate and economic announcements turn quieter as the week is shortened by a public holiday on the Monday. In the US, a similar situation is in prospect.
Economics
In the UK, further gauges of health across both British manufacturing and the service sector will be provided by the Confederation of British Industry (CBI) over the week. On Tuesday, a survey in relation to the service sector is scheduled, whilst Thursday sees the announcement of the organisation’s broader quarterly distributive trade survey. Elsewhere over the week, data providing further insight into the UK housing market is scheduled. On Tuesday, the British Bankers' Association is due to provide its latest mortgage approval figures, this time for April (2008). In March, the number of mortgage approvals for house purchases - a gauge of future demand – declined to 35,417 from 43,147 in February. Later on in the week (Friday), the government’s Land Registry body is due to provide its reading on house prices across England and Wales for April. House prices during March declined by 0.4pc from February.
Over in the USA, housing data is also in the news with the release of new home sales data on Tuesday. Sales of new homes in the US declined to a 17 year low in March, despite substantial house price declines. On Wednesday, data in relation to durable goods orders is scheduled. Durable goods data gauges new orders placed with domestic manufacturers for immediate and future delivery of hard goods – those with a shelf life over a year. The figures are highly volatile but are seen as providing a reflection of how busy US factories will be in the months to come. Total durables goods orders were down 0.3pc over March.
Companies
On the UK corporate front, mobile phone giant Vodafone is likely to take centre stage over the early part of the week. Full year results are scheduled for Tuesday. The group is likely to repeat a similar theme to that seen at its half year results in November (2007), with sluggish European voice growth (UK, Germany & Italy) being offset by good progress being made in the emerging market regions such as Turkey, South Africa and India. However, European data transmission has in contrast, been progressing. Overall, group sales are expected to have grown by around 13.2pc to £35.2 billion, whilst earnings before interest, tax and amortisation expenses (EBITA) are forecast to have grown by around 9.5pc to £13.1 billion (consensus forecasts). The total dividend for the full year is forecast to be up by approximately 7pc to 7.25 pence per share.
Unlike Vodafone, utility group Scottish & Southern Energy has over recent years been rewarded for ignoring the apparent bright lights of major overseas expansion. The energy group, whose full year results are due on Thursday, has predominantly concentrated on expanding its electricity and gas utility networks across the UK. Management recently confirming plans to jointly construct and operate what will be the world’s largest offshore windfarm (140 wind turbines), some 25 kilometres off the coast of Suffolk. The group’s trading statement back in late January saw new customers across its networks continuing to be won, with the company then totalling some 8.4 million customers. Profits were expected to prove in line with analysts’ forecasts. Current consensus estimates for operating profits stand at around £1.22 billion, +13.5pc over last year, whilst the total dividend over the full year is forecast to be up by around 7.3pc to 59.0 pence per share.
Other corporate announcements expected over the course of the week include results and trading updates from nuclear power company British Energy, hedge fund management company Man Group and defence company QinetiQ Group.
Week Ahead Diary
Half Year Results
Monday – UK Market closed
Tuesday – n/a
Wednesday – Greencore Group, Dawson Holdings
Thursday – n/a
Friday – n/a
Full Year Results
Monday – UK Market closed
Tuesday – Vodafone
Wednesday – British Energy, Burberry Group, Intermediate Capital Group, QinetiQ Group
Thursday – Scottish & Southern Energy, Man Group, Shanks Group
Friday – n/a
Economic Diary
Monday – UK Market closed
Tuesday – UK CBI service sector survey, UK British Bankers (April) mortgage lending figures, US New home sales
Wednesday – US Durable goods orders
Thursday – UK CBI quarterly trade survey
Friday – UK Land Registry (April) survey, US Consumer sentiment survey
Note: This list represents what we believe are the highlights of the coming week and is not an exhaustive list of company announcements or economic events. Source: Digital Look.
