The week ahead...

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Monday 11 February

Trading statements

Avation, Monitise, Fidessa Group, BAA, Essar Energy.


RWS Holdings, GCP Infrastructure Investments, Ruukki Group.

Tuesday 12 February

After a quiet Monday, all eyes will be on Barclays (BARC) when it publishes its fourth-quarter results, as well as announcing its restructuring plans.

Recent news: The banking giant recently announced that finance director Chris Lucas and group general counsel Mark Harding had decided to retire. It also made an additional £600 million provision for mis-sold payment protection insurance (PPI), and £400 million for interest-rate swaps.

The past year has seen the bank encounter one obstacle after another, from the Libor scandal and resignation of ex-chief executive Bob Diamond, to Financial Services Authority and Serious Fraud Office investigations relating to fees paid to sovereign wealth fund Qatari Holdings during 2008's emergency rights issues.

Analysts' expectations: "Tactically, we have preferred Barclays over Royal Bank of Scotland (RBS) and Lloyds Banking Group (LLOY), and maintain that view as upside from restructuring could lead to outperformance," states Chintan Joshi, analyst at Nomura. "We have flagged [previously] that restructuring could add c. 30-40p to valuations, but the question remains open as to how much of this is already in the stock price."

Ian Gordon, analyst at Investec, is expecting Barclays to report an adjusted pre-tax profit of £7.2 billion for 2012.

Next up will be interim results from homewares retailer Dunelm Group (DNLM).

Recent news: First-half sales came in at £340.1 million. In the period, Dunelm opened 10 superstores, including one relocation and one reopening following a fire. The group traded from 123 superstores at the half year end (December) and stated six stores were in the pipeline with four of these, including one relocation, to open in the second half of 2013.

Analysts' expectations: Jean Roche, analyst at Panmure Gordon, is forecast earnings before interest and tax of £60 million and pre-tax profits of £59.9 million.

"We believe strongly that the shares will continue to perform during calendar 2013, driven by forecast upgrades," he stresses. "More medium term, we are nudging our margin assumptions up very slightly for 2015 and beyond, mainly due to increased direct sourcing."

Valuation: The stock is trading on a 2013 price/earnings (P/E) ratio of about 20 times.

Economic news

Tuesday will see the publication of January's consumer price index (CPI) inflation data.

CPI inflation hung on to the 2.7% mark for the third month running in December. The steady reading was made possible by a smaller month-to-month rise in air fares, compared with the same month in 2011.

Victoria Cadman, economist at Investec, is forecasting a slight moderation in CPI inflation to 2.6%. "We expect to see a smaller month-to-month decline in airfares between December and January this year, than a year ago; that should provide some upward pressure to the 12-month CPI inflation rate.

"However we expect this pressure to be more than offset by some modest downward contributions from a small drop in fuel prices month to month, a smaller (3.6% average) rise in rail fares than in January last year, and a sharp monthly fall in clothing prices," she explains.

This will be followed by January's producer prices.

UK producer input price inflation has remained well below 1% since the middle of last year, helped over recent months by month-to-month declines in oil and soft commodity prices. However over the past month we have seen those trends grind to a halt; oil prices stood 3.8% higher in January, whilst soft commodity prices were flat, more or less. Furthermore, metals prices have climbed by 5.3% over the past two months.

As a result, Cadman is pencilling in a 0.5% rise in producer input prices and a 0.1% monthly increase at the factory gate.

The Royal Institute of Chartered Surveyors (RICS) will also publish its January survey results.

The extent of the strengthening in the RICS survey over the past six months or so has been one of the few positive surprises connected with the UK economy recently. The selling prices balance firmed again to 0.3% in December, the first non-negative reading since June 2010.

Trading statements

Albemarle & Bond Holdings, Sinclair IS Pharma, Willis Group, Dunelm Group, Sabien Technology Group, Hibu, Avanti Communications Group, Lo-Q, Barclays, Dragon Oil, Volex Group.


Heavitree Brewery, CareTech Holdings, Pressure Technologies.

Wednesday 13 February

Household and personal goods maker Reckitt Benckiser Group (RB.) will open the curtains on Wednesday.

Recent news: In February 2012, chief executive Rakesh Kapoor laid out his "strategy for continued outperformance". Not a great deal happened to the shares until October 2012. Then a strong third quarter, coming on the back of a change of chief financial officer and defensive manoeuvres on opiate addiction drug Suboxone, set light to them. Since that point, Reckitt has outperformed the FTSE 100 by 9%.

Analysts' expectations: Consensus expectations are for 4.3% like-for-like sales growth in 2012.

Martin Deboo, analyst at Investec, is expecting the outlook to be closely scrutinised. "A year ago Reckitt gave medium-term guidance of 'growth ahead of markets' and 'steady operating margin expansion'," he reminds investors. "With 2012's 'year of transition & investment' almost over, we expect the questions to get tougher from here."

This will be followed by full-year results from explorer and producer Tullow Oil (TLW).

Recent news: The company has already guided for full-year production of 80,800 barrels of oil per day (bopd) and revenues of £2.35 billion.

Analysts' expectations: Investec's Brian Gallagher is not anticipating any changes to full-year net debt of $1 billion (£634 million) or its capital expenditure guidance of $2 billion for 2013. With Jubilee's ramp-up continuing to disappoint, he is expecting Tullow to focus on de-bottlenecking plans and a possible 2013 exit rate in excess of 130,000 bopd.

"We continue to view Tullow as increasingly levered to its production business negating the quality of its exploration portfolio," states Gallagher, reiterating his 'sell' recommendation.

Trading statements

Town Centre Securities, Reckitt Benckiser Group, Tullow Oil, African Barrick Gold, Telecity Group, Anglo Pacific Group, Alpha Real Trust.


Impax Asset Management, Income & Growth Trust, F&C Capital & Income Investment Trust.

Thursday 14 February

Trading statements

Rio Tinto, Coca-Cola HBC, SVG Capital, Rolls-Royce Group, AMEC, Morgan Crucible Company, Electric Word.


Halma, Norcros.

Friday 15 February

Economic news

January's retail sales data will be published at the end of the week.

The pattern of high-street spending through most of 2012 was one of strength above expectations, until retail sales began to weaken over the autumn - indeed, volumes declined by 0.6% over the fourth quarter as a whole.

This background, coupled with poor anecdotal reports, plus snow later in the month, led analysts to expect a weak January British Retail Consortium (BRC) retail sales monitor. Instead the opposite was the case, with total sales value growth firming to 3.0% year-on-year from December's 1.5%.

"With few apparent base effects from January 2012, this would imply a month-on-month jump in the Office for National Statistics' series this time," says Philip Shaw, economist at Investec, stressing it was "feasible" the survey was correct and that retail sales were recovering. He points out that employment has risen by over 500,000 over the past year, while real net household incomes are estimated to have risen by 2.8% in the year to the third quarter.

Overall, Shaw is expecting a monthly 0.6% increase in sales and 0.8% excluding fuel. "More importantly this would increase our confidence that the economy is about to recover gradually rather than fall into a triple-dip [recession]," he adds.

Trading statements

Thorntons, Anglo American.