The week ahead: Tesco, James Halstead, Quantum Pharma
30th September 2016 16:00
by Lee Wild from interactive investor
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Monday 3 October
Monday's full-year results from , the 101-year-old flooring giant, are expected to show it trading in line with expectations, posting modest revenue and earnings growth despite a bruising summer for UK companies.
Panmure Gordon's Adrian Kearsey reckons Halstead's European focus (43% of sales in 2015), combined with evidence of a strengthening flooring market on the continent, should allow the firm to benefit from the weak pound, offsetting any Brexit-related losses in UK sales.
"We are forecasting revenues to increase from £236 million (FY 2016E) vs £227 million (FY 2015) and pre-tax profit £45.4 million (FY 2016E) vs £44.2 million (FY 2016E)," wrote Kearsey in a 1 August note.
"Following the payment of the special dividend we anticipate cash modestly contracts (£42.4 million vs £49.5 million)."
The valuation is full - about 26 times forward earnings - but, says Kearsey, it's because Halstead is a long-time, reliable growth stock.
"We believe the valuation reflects the impressive long-term organic growth record of the business: revenues +117% (FY 2004 - FY 2015), 860-basis point expansion in the [earnings before interest and tax] margin and cash generation (£30-35 million per annum)."
Panmure keeps its 'buy' rating, with price target 465p - just a smidge of upside to Friday's closing price of 449p.
Trading Statement
James Halstead, Seeing Machines
AGM/EGM
Tuesday 4 October
Tuesday sees half-year results from £109 million specialist pharmaceuticals outfit .
An interim statement in August indicated overall trading for the half would be in-line, but Quantum fans will be more interested in details of how the new drugs from its Niche Pharmaceuticals line are progressing.
The division launched several products in the first six months of the year and, as sales have tended to be weighted towards second-half, potential buyers next week will want a clearer idea of how these medicines have gone down.
Trading looks to be broadly healthy, anyway. An "encouraged" Gary Waanders at house broker Zeus Capital keeps full-year forecasts steady, looking for £70 million in revenue and £12.7 million in adjusted earnings before interest, tax, depreciation and amortisation, rising to £80.6 million and £14.1 million respectively in 2017.
And N+1 Singer's Chris Glasper also leaves figures unchanged, hailing the good vibrations likely to emanate from the Niche arm's new drugs. "The shares have begun to recover in recent weeks as a number of products have launched," explains Glasper.
"We expect this trend to continue and for the shares to continue to re-rate on further delivery from the pipeline."
Quantum shares, at 78p when the last statement was released, closed Friday at 67p.
Trading Statement
Quantum Pharma, CAP-XX, Bluefield Solar Income Fund, Revolution Bars, SCS, Greggs, St Ives
AGM/EGM
Angle, Ncondezi Energy
Wednesday 5 October
First-half results and second-quarter sales numbers from will likely indicate chief executive Dave Lewis's recovery strategy, aimed at outmanouevring discounters and "big four" rivals alike, is bearing fruit.
Data released earlier this month by researcher Kantar Worlpanel showed that the supermarket's sales in the 12-week period to 11 September were their best in over two years, posting a decline of only 0.2% on the same period last year.
And the improving story at Tesco - reporting two consecutive quarters of underlying UK sales growth - lit a fire under the share price, which has climbed 21% so far in 2016.
The shares were the best-performing of the supermarkets in September, outperforming struggling by over 10% and just pipping too, despite the latter's exciting new deal with .
Shareholders will be looking for proof the good news can keep coming, taking the company back to sales growth. If it comes, the shares could continue their march higher. They closed Friday at 182p, up 1.3% on the day.
Trading Statement
Topps Tiles
AGM/EGM
Artemis Alpha Trust, Hargreaves Services
Thursday 6 October
Trading Statement
DFS Furniture, Morses Club
AGM/EGM
Taptica International, PUMA VCT VII
Friday 7 October
Trading Statement
Progility
AGM/EGM
Legendary Investments, Abbey, Sable Mining Africa
This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.