LONDON (ShareCast) - Footsie stalwarts Vodafone and Marks and Spencer will both be vying for attention early doors on Tuesday.
Full year results from Vodafone should see the group's pre-tax profit break through the £10bn barrier.
Consensus estimates are for profit before tax of £10.26bn for the year to March 31st, up from £9.5bn the year before. However, earnings per share are predicted to slip to 15.77p from 16.75p the year before. Revenue is seen rising to £46.3bn from £45.9bn.
In the fourth quarter of its fiscal year, Vodafone is set to get a sneaky lift from 2012 being a Leap year, with the company expecting February 29th to lift service revenues by somewhere between 0.7% and 0.9%. Broker Nomura Securities is expecting service revenue growth in the quarter to be 1.9%.
"As flagged last month, we expect a shift from current revenue guidance (14%), and we now forecast organic growth of 0.4% for FY13 [fiscal 2013] and 0.9% for FY14 (1.0% / 1.3% previously). We forecast a margin decline of 60bp [60 basis points, or six-tenths of a percentage point] and 40bp (50bp and 20bp previously)," Nomura added.
The mobile phones network giant recently struck a deal to buy Cable & Wireless Worldwide in a deal worth just over £1bn as it seeks to beef up its share in the corporate enterprise market.
"Its recent intention to showcase Enterprise and its interest in Cable & Wireless Worldwide is instructive. With European corporates under less pressure than consumers, an emphasis on Enterprise is sensible," reckons Nomura.
For retail bellwether Marks & Spencer (M&S), the market is expecting profit before tax of £693m, down from £714m the year before, on sales of £9.97bn. The dividend is seen rising to 17.05p from 17.00p the year before.
Consensus forecasts have drifted down in recent weeks as the weather in the UK remains miserable, for the most part.
"M&S is set to report a soft set of full year results, reflecting a combination of subdued sales, gross margin pressure and operating cost inflation," reckons Charles Stanley analyst Sam Hart.
Sales data has already been released with the fourth quarter trading update so the focus of investor attention will, therefore, be on outlook comments and guidance for 2012/13, along with any update on strategy, Hart asserts.
"An update is expected to be provided by Chief Executive, Marc Bolland, on his strategic plan covering the three years to March 2014. Many of the initiatives remain at the implementation stage, although good progress appears to be being made in refreshing the store network, strengthening product ranges, improving operational efficiency and more fully exploiting the international opportunity," Hart said.
The broker reckons sales might just limp over the £10bn mark at £10.1bn, while its forecast for earnings before interest, tax and amortisation is £800m, down from £825m the year before.
Publishers Bloomsbury (books) and Future (magazines) are both set to announce results.
Northland Capital Partners expects the Harry Potter publisher to present an update on its One Global Bloomsbury strategy that focuses on publishing (trade and specialist) in the English language, and the associated acquisitions and disposals.
As for Future, Northland notes that the company "continues its shift from print to digital and retrenchment to the UK that now represents 75% if group revenue."
HomeServe, the struggling home emergency insurance and repairs group, has already revealed that full year figures will be in line with market expectations, albeit those market expectations have lowered as a result of the company's travails with the Financial Services Authority (FSA) this year.
Panmure Gordon thinks the key issues in the results statement will be: an update on UK telesales; growth in North America; the impact of Eurozone uncertainty.
"Management has been working hard to rebuild confidence but uncertainty still exists. Ongoing dialogue with the FSA leaves the door open for a full investigation, and therefore, a potential fine, while the impact of its international growth aspirations is unknown. It has reiterated its desire to maintain a progressive dividend and we believe that yield will be the valuation driver. We target a 6% yield, implying 190p target price, so stay cautious," Panmure Gordon said.
On the economic front, UK inflation data will be published, The market is expecting the Consumer Price Index annual inflation rate to be 3.1% in April, down from 3.5% in March, while Retail Price Index inflation is seen easing to 3.4% from 3.6% in March.
"We expect higher petrol prices and alcohol and tobacco duty increases introduced in the March Budget to partially offset the base effect and push up inflation," Barclays Capital said.
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