Tuesday preview: Burberry, Computacenter, inflation

12th Jul 2010 17:58

Luxury goods maker Burberry has been a fashion success story throughout the recession, as reflected by its shares, which are up 90% or so over the last year.On Tuesday it brings out a sales update for its first quarter, covering the April to June period. Nomura Securities and UBS are both predicting sales of £261m, up 14.1% on a year earlier. "Organic top-line growth of 10.2% should be compounded further by a 4% positive impact from currencies," UBS reckons.Nomura said full year sales of £261m would represent a strong underlying improvement on the previous quarter, "reflecting a significant recovery in wholesale (+13% vs. 1H [first half] guidance of +10%) and continued strong momentum in Retail (comps [comparative figures] +10%), albeit against easier prior-year comps."Nomura thinks the company's retail side will have generated sales of £173m, up 17.2% on a year earlier with 7.2 percentage points of that down to increased space.The wholesale division is tipped to grow sales 13% to £71m, while licensing sales are seen sliding 8% to £17m.Growth in emerging markets was a high point for the company last year and that is likely to have been the case again in the first quarter but things have probably been a bit tougher in western Europe. IT services provider Computacenter issues a pre-close trading statement that is likely to reveal that the company has been trading in line with expectations, according to Panmure Gordon, with company management expected to "hold the line" on full year profits guidance.The broker thinks the company will announce year on year revenue growth of 5%, down from 8% in the first quarter, to £1,288.9m. "Of the geographies we anticipate; UK revenue at £627.6m, EBITA [earnings before interest, tax and amortisation] £14.9m, France £146.7m, EBITA -£1.0m, Benelux £12.9m, EBITA -£0.6m and Germany at £508.1m, EBITA £7.1m," the broker forecasts.Adjusted profit before tax is expected to improve to £20.7m from £18.5m last year."While the outlook is likely to be described as 'uncertain' there should be plenty of positive operational signs. However the mix of economy, public sector spending uncertainty and a slow services business is likely to make this normally reticent management team guide to no changes for the FY [full year] forecasts," the broker predicts.Also releasing a pre-close management statement is Dunelm, the homewares retailer which in late April announced a sharp slowdown in sales growth over the first four months of the year. It also cautioned it faces tough comparisons over the rest of the year so shareholders should be braced for a less than ebullient update.KBC Peel Hunt's full year profit before tax forecast of £75.5m "is predicated on full year LFL [like for like] growth of 7.5% and a gross margin gain of c.150bps [basis points].""Our implied Q4 [fourth quarter] LFL performance is therefore c.-3.0%," the broker continues. "This is a reflection of the tougher comps, the unstable consumer confidence seen recently and cautious spending around the time of the election and the emergency budget. The World Cup, despite England's early exit, along with the recent hot weather are also reasons why we expect LFL sales to be negative. There is a risk that the LFL performance may be worse than our assumption but any shortfall should be compensated by a better than expected margin performance, which to date has held up well," KBC Peel Hunt said. The British Retail Consortium (BRC) release its sales monitor for June overnight and should show a slight uplift in retail activity from May, helped by the hot dry weather and a bit of World Cup-inspired shopping mania. Expectations are for the BRC to report total retail sales in June were up 3.2% on June 2009, with like for like sales up 1.0%. In May, the year on year gain was 3.0%.Also out overnight is the June house price balance from the Royal Institute of Chartered Surveyors, where the expectation is for a positive balance of 20% in June, albeit down from +22% in May.The survey measures the percentage of surveyors reporting a rise in house prices over the three month period minus the percentage of those reporting a fall. More house price data comes from the Department for Communities and Local Government (DCLG) which releases figures for May. UK consumer prices for June are expected to be unchanged from May, after rising 0.2% in May. The annual inflation rate is expected to narrow to 3.2% from 3.4%.The core consumer price index is expected to show a slowdown in annual inflation from 2.9% in June to 2.7% in June.The retail price index is forecast to rise 0.2% in June after rising 0.4% in May, with the year on year rise slowing to 4.9% from 5.1% in May.Lower petrol prices will have contributed to a cooling of inflation, while food prices also got cheaper in June thanks to shops cutting prices to attract the money of snack munching couch potatoes intent on watching the World Cup. INTERIMSLow & BonarINTERNATIONAL ECONOMIC ANNOUNCEMENTSABC Consumer Confidence (US) (22:00)Balance of Trade (US) (13:30)Treasury Budget Statement (US) (19:00)Consumer Prices Index (FRA) (07:45)ZEW Survey (EU) (10:00)ZEW Survey (GER) (10:00)Industrial Production (JPN)Capacity Utilisation (JPN)Consumer Confidence (JPN)FINALSBglobal, DTZ Holdings, Ocean Power TechnologiesAGMSBritish Airways, BTG, Intermediate Capital Group, Luminar Group, Northern Foods, Ventus 1 VCT, Ventus 2 VCT, Ventus 2 VCT 'C' Shares, Ventus VCT 'C' Shares, Young & Co's Brewery 'A'TRADING ANNOUNCEMENTSComputacenter, Webis HoldingsUK ECONOMIC ANNOUNCEMENTSBRC Sales Monitor (00:01)Consumer Price Index (09:30)Retail Price Index (09:30)DCLG UK House Prices RICS Housing Market Survey (09:30)FINAL DIVIDEND PAYMENT DATEAlbany Inv Trust, May Gurney Integrated Services