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Tuesday preview: Drax, ITV, PMI construction
Wed, 08 Feb, 2012
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Tuesday preview: Drax, ITV, PMI construction
Mon, 2 Aug 2010, 16:17:00
Coal-fired plant operator <b>Drax </b> has seen its share price warm up considerably since it said in mid-May that it continued to benefit from a very strong contracted position. The company issues interim figures on Tuesday with Deutsche Bank tipping the company will announce a moderate increase in earnings before interest, tax, depreciation and amortisation from last year's level. Charles Stanley, meanwhile, is predicting earnings before interest and tax of £150m, up from £127m a year earlier. Last month the company announced plans to convert one of its units to burn biomass-only and the interim statement may contain more detail in this regard. The conversion could reduce carbon dioxide from the plant by 4.4m tonnes a year, and if successful, could eventually be extended to all units The interim results announcement from terrestrial TV network <b>ITV </b>will be the first since chairman Archie Norman recruited former Royal Mail and Football Association chief executive officer (CEO) Adam Crozier to be CEO of ITV. Industry tittle-tattle is that Crozier will unveil a nascent pay-TV strategy, with a new stand-alone channel aimed at men and subscription based access to high definition versions of its ITV2, ITV3 and ITV4 channels. Broker Charles Stanley thinks the focus of the strategy review will be on "improving the quality of programming on ITV1 and digital channels (ITV2,3,4 etc), further developing on-line (itv.com), increasing the proportion of programming sourced in-house from ITV Studios and trying to further reduce the regulatory burden." It considers "more radical change, such as moving to a pay-TV model or disposal / demerger of ITV Studios, to be very unlikely," but that was before rumours of a pay-TV model emerged over the week-end. One of the more extreme ideas being mooted is switching the channel's enduringly popular "Coronation Street" soap opera to pay-TV along with other popular favourites such as "The X-Factor". On the trading front, advertising revenues have shown signs of recovering in most media and ITV's trading is expected to have shown a sharp improvement on a year ago, especially as it has the boost from the World Cup this year; last year's figures were, in any case, very soft. "We understand that trading in Q2 has been even stronger than expected, so forecast H1 NAR [first half net advertising revenue] to be up by 20%," Charles Stanley said. The broker is forecasting profit before tax of £110m versus an adjusted loss of £14m the year before. Numis Securities, meanwhile, is slightly more optimistic, going for pre-tax profit of £115m. Revenue rose 6% year on year to £450m in the first quarter and Numis thinks growth will have risen to 22% in the second quarter. Royal Bank of Scotland, meanwhile, is expecting revenue to be 9% higher than at the interim state last year, at £995m. Shifting the focus to the economy, the July <b>construction purchasing managers index </b>is expected to show an improving picture for the fifth month in a row. Economists are pencilling in a July reading of 57.5, down from 58.4 in June but still above 50, therefore indicating growth in activity. Prior to March, the index had languished below the 50 level for 23 months on the spin. INTERIMS 888 Holdings, Capital & Counties Properties , Devro, Drax Group, GKN, ITV, Meggitt, SDL International, Taylor Wimpey, Weir Group, Xstrata, Zotefoams INTERIM DIVIDEND PAYMENT DATE Sinclair (William) Holdings INTERNATIONAL ECONOMIC ANNOUNCEMENTS ABC Consumer Confidence (US) (22:00) Business Inventories (US) (15:00) Factory Orders (US) (15:00) Pending Homes Sales (US) (15:00) Personal Consumption Expenditures (US) (13:30) Personal Income (US) (13:30) Personal Spending (US) (13:30) PMI Construction (EU) (09:00) PMI Construction (GER) (08:55) Retail Sales (GER) (07:00) GMS KleenAir Systems International ANNUAL REPORT Cohort AGMS Blue Planet Financials Growth & Income Inv Trust Unit, Blue Planet Financials Growth & Income Inv Trust Units, Gulf Keystone Petroleum, Hansa Trust, Monks Inv Trust UK ECONOMIC ANNOUNCEMENTS PMI Construction (09:30) FINAL DIVIDEND PAYMENT DATE Johnson Matthey
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