Date: Tuesday 15 May 2012
LONDON (ShareCast) - Interim results from contract caterer Compass should show the benefit of new contract wins and high retention rates.
The figures could show revenue growth of 8.5% and organic growth of 5%, according to Charles Stanley analyst Tony Shepard.
The broker is forecasting pre-tax profit of £560m, up from £531m last year. The interim dividend is forecast to increase to 7p from 6.5p.
"The operating profit margin is expected to be at the same level as the first half of last year. Nevertheless, Compass still sees plenty of opportunity to improve margins over the medium term and there should be an uptick in the second half of 2012," Shepard observes.
The first half margin has been affected by the mobilisation of a very large contract, continued investment in the fast growing areas as well as the negative impact from the challenging trading conditions in Europe, Shepard notes.
Panmure Gordon is forecasting Compass's profit before tax will be £565m, giving earnings per share of 22.5p, and it, too, is predicting an interim dividend of 7p.
"At the pre-close update the group remained encouraged by the pipeline of new
business. We expect the outlook statement to reassure and believe Compass remains a very attractive stock given its US exposure and high returning business model with a very strong balance sheet," Panmure Gordon said.
Cinemas operator Cineworld gives a trading update on Wednesday and broker Canaccord thinks the company will be rubbing its hands in gleeful anticipation of the box office business it is likely to do with the new film based on the Marvel comics superhero team, The Avengers. The film broke box office records on its opening week-end.
"The UK box office not only benefited from the Avengers but the release of American Pie: Reunion helped boost weekend takings by [roughly more than] 70% [over] the same period last year (source: boxofficemojo.com). Not only is this momentum positive for admissions but retail sales and premium priced 3D tickets should provide an additional boost for box office sales," Canaccordd reckons.
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Honeywell International Inc., M Winkworth, MedicX Fund Ltd.
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