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The week ahead: Kingfisher, Topps Tiles and GDP

Thursday will see Kingfisher release its third quarter interims, from which investors will try to glean information on the state of the UK economy. Ironically, the company’s results may be more indicative of the state of affairs in the Eurozone, given its exposure to France.

Thus, analysts at UBS expect the company’s third quarter profits before taxes to have reached £265m, down by approximately 3% on last year. The consensus estimate is for £255m. Group like-for-like sales (LFL) is expected to be -2%. UK profit is expected to be ahead by 10%, but France down 8% (all from currency) and International sales off by more-or-less 5%. Poland zloty profit is expected to be down modestly but with the last of the big currency hits.

Be that as it may, the broker does add that: "macro weakness in France suggests the near-term forecast risk remains on the downside. However, from here, gross margin gains should accelerate, especially if plans to reinvest close to 50% of supply-chain gains into the offer are reined back as a result of weaker market conditions and a general pull-back in competitive activity.”

Also to watch out for in the Utilities sector, the long awaited Energy Bill is expected to be published next week, with a further announcement on ‘gas strategy’ in the Autumn Statement by George Osborne. While the main market impact is expected to be on stocks with electricity generating capacity (or plans to build it), analysts at Seymour Pierce think it will have little impact on shares – despite speculation in the press to the contrary. Amongst the potentially affected stocks are: Centrica, Drax Group, National Grid and SSE.

Tuesday November 27:
- Topps Tiles – year end announcement
- UK GDP (output, income & expenditure)

Thursday November 29:
- Wolseley - AGMS
- Kingfisher trading announcement
- UK CBI Industrial Trends Surveys

Source : Digital Look

25 November 2012
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