Graham Spooner, investment adviser at retail stockbroker, Share (LON:SHRE) , gives his thoughts on what to expect from companies announcing results w/c 12 July 2010. He started his career in 1977 as a trainee dealer on the Stock Exchange trading floor. Two years later, Graham became a fully authorised dealer, a position which he held until 1986. Graham continued his career as a dealer at Chase Manhattan Bank, Svenska Bank and Midland Bank before moving to emerging-markets specialists, City of London Investment Management. Now a respected voice in the media, Graham’s comments on the markets and share tips are frequently sought by The Financial Times, The Times and The Daily Telegraph.
Burberry Group (LON:BRBY) (Q1 2011 trading statement) - Full-Year profits released in May revealed a 23% rise in adjusted pre-tax profits. Improvements came from the increase in sales from raincoats and shoes which did particularly well. There have been a number of costs throughout the year which have impacted on the profit figures such as start up costs in Brazil, Mexico, India and Japan, as well as restructuring costs that accounted for over £50m. We currently list Burberry as a HOLD.
ICAP (LON:IAP) (interim management statement) - Due to volatile markets, ICAP’s full year results in mid May noted a 5% decrease in profits. As their revenue is mainly dominated by non-sterling, ICAP have benefitted from sterling’s weakness against other currencies. Due to this weakness, the share price suffered earlier in the year, however the yield is now an attractive 4.5%. We currently list ICAP as a HOLD.
Mothercare (LON:MTC) (Q1 2011 trading statement) - Although the retail sector is likely to remain under pressure, Mothercare has some defensive characteristics to offer. With a combination of potential overseas growth, as well as parents maintaining the amount spent on children, we feel Mothercare has attractions that can offset consumer concerns in the future. The share price has fallen back this year but long term investors should take advantage of the decline to start building up a holding. We currently list Mothercare as a BUY.
Experian Group Ltd (LON:EXPN) (Q1 2011 interim management statement) - So far, Experian has shrugged off the recession as a result of an expansion of the range of industries the group services. The company is also looking to extend its geographic reach and make acquisitions where appropriate. Preliminary results saw the pre tax profit rise to $910m and debt reduced by nearly a quarter. Experian has announced that dividends will be increased and a $300m share buy back will also start soon. We currently list Experian as a BUY
Premier Oil (LON:PMO) (trading statement) - Latest results for Premier Oil indicate positive news now that they have struck oil on the Catcher site and this will hopefully deliver more return in the coming months. There has been some corporate activity in the sector with a bid approach made to Dana Petroleum and there is a chance that Premier Oil could one day become a target. We recommend this company as a buy as we feel it still has much potential. We currently list Premier Oil as a BUY
Economic announcements for the week commencing 12 July
13 July – Consumer prices indices
Inflation’s refusal to drop back as fast as was predicted earlier in the year is beginning to spook analysts. Inflation’s stubbornness has already led to the emergence of a rift in the Bank of England Monetary Policy Committee. But last month did see the CPI rate fall from 3.7 to 3.4 per cent. With data from the BRC showing that High Street inflation was actually negative 0.1 per cent month on month in June, markets will be hoping for another significant fall in the headline inflation rate.
13 July – A Generational Accounts Approach to Long Term Public Finance in the UK – July 2010
As the UK’s population ages, and changes in the retirement age enter the public debate, today’s report from ONS will probably create shockwaves. Providing data on the legacy of baby boomers’ debt for future generations, significant media coverage may result.
13 July – June housing survey from RICS
Last month’s survey from RICS showed a significant widening in the gap between the index tracking new instructions (21.4) – which impacts on supply, and the index tracking new enquiries (9.7) – which impacts on demand. With the removal of HIPs, the gap may have widened even further in June. If so, then the growing differential between instructions and enquiries suggests house price falls later in the year.
• United Kingdom Economic Accounts – Q1 2010 ONS
• Balance of Payments – Q1 2010
• Eurozone interest rate announcement ECB
• Consumer prices indices – June 2010 ONS
• A Generational Accounts Approach to Long Term Public Finance in the UK – July 2010
• June Housing survey RICS
• US International Trade BEA
• Average Weekly Earnings – May 2010 ONS
• Labour Market Statistics – LMS July 2010
• EU HICP inflation Eurostat
• Profitability of UK Companies – Q1 2010 ONS
• Productivity Measures – Q1 2010
• Housing Equity Withdrawal Bank of England
• US consumer prices BLS
• US average earnings
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