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Thursday preview: Prudential, Holidaybreak
Wed, 08 Feb, 2012
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Thursday preview: Prudential, Holidaybreak
Wed, 11 Aug 2010, 16:57:00
Insurer <b>Prudential </b>will take centre stage on Thursday, having been mercifully out of the spotlight for much of the six month period since the collapse of its $35.5bn deal to buy AIA, the Asian arm of fallen US insurance giant AIG. A strong set of interim figures should help to restore its reputation a little and boost the prospects of chief executive Tidjane Thiam saving his job after he pinned his reputation on the AIA takeover, which quickly turned into a debacle. Shareholder resistance to the deal forced management into unsuccessfully attempting to renegotiate the asking price Brokers expect the half-year numbers to underline the point that Thiam is doing a decent job running the company leaving his grand ambitions aside. The Pru has already said first quarter sales rose by 26% to £807m, with new business profit up 27% to £427m. "The excellent range topping H1 [first half] performances from <b>Legal & General, Aviva</b> and <b>St. James's Place</b> so far this reporting season bode very well for Pru, not least because it will not want to disappoint at H1 this year for obvious reasons," asserts Panmure Gordon. "There should also be an update on the £450m AIA deal failure cost and we think that the expected increase will be less than many suspect. The dividend should not disappoint, driven by a good cash generation figure, and should be increased to at least 6.6p/share (+5%)," the broker added. Panmure Gordon is forecasting an operating profit on the European Embedded Value (EEV) basis of £1,494m, up 20% on the first half of last year. On an international financial reporting standards (IFRS) basis the broker has pencilled in an operating profit figure of £714m, up 4% on last year. Beyond the numbers the broker thinks the Pru's strategy post-AIA will be the main focus of attention. "There has been press speculation that M&G might be hived off, the UK operation must be feeling rather unloved, and we have suggested that there should be a sale or part sale of the Asian operation. In our view there are a number of options that can be looked at in order to realise the latent value within the business that is simply not reflected in the current share price. Even confirmation that the pre AIA strategy of growing Asia organically is the preferred strategy going forward would be a welcome clarification," Panmure Gordon said. It's been a bad week so far for package tour operators with both <b>Thomas Cook </b>and <b>TUI Travel </b>both shifting full year earnings expectations lower, and it will be interesting to see whether educational holidays specialist <b>Holidaybreak </b>has fallen victim to the same malaise as the "sun, sea and sand" specialists when it gives a trading update. The share price has tumbled 17% over the last month, suggesting that the market thinks the company, which also has a hotel bookings arm, an adventure holidays division and its original camping business, may have been feeling the squeeze a bit. Nevertheless, back in mid-May the company said it was on track to meet full year expectations with sales intake for the year to mid-May on a par with the corresponding period a year earlier. Not only that, bookings were picking up pace, adding weight to the management's view that customers are booking later than ever. INTERIMS Aegon , Alea Group Holdings (Bermuda) Limited, Anglogold Ashanti, Corac Group, Cryptologic Ld, Cyprotex, Lincat Group, Prudential, Psion, Ruukki Group, Telecom Egypt S.A.E GDS (Regs) INTERIM DIVIDEND PAYMENT DATE ITE Group INTERNATIONAL ECONOMIC ANNOUNCEMENTS Continuing Claims (US) (13:30) ECB Report (EU) (09:00) Import and Export Price Indexes (US) (13:30) Industrial Production (EU) (10:00) Initial Jobless Claims (US) (13:30) Q2 Anglogold Ashanti, Cryptologic Ld, Ruukki Group GMS Horizonte Minerals ANNUAL REPORT Eredene Capital IMSS Greencore Group, Holidaybreak, Income & Growth VCT EGMS Infrastructure India AGMS Investec, Minera IRL, Tapestry Investment Company PCC Ltd. FINAL DIVIDEND PAYMENT DATE Cable & Wireless Communications, Cable & Wireless Worldwide, GB Group
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