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Tuesday preview: Time for a Burberry check
Tue, 22 May, 2012
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Tuesday preview: Time for a Burberry check
Mon, 16 Jan 2012, 16:01:00
Fashion chain <b>Burberry</b> has been one of the success stories of the British retail scene in recent years, thanks in no small part to its international cachet. On Tuesday, it releases an interim management statement covering the third quarter of its fiscal year, which will include the Christmas trading period.
 
 Credit Suisse predicts net sales of £567m, up 20% year-on-year on an underlying basis. "Recent sector data points to good holiday sales for Burberry in the US and China. Emerging market tourist flows are likely to somewhat mitigate the anticipated slowdown in luxury demand from local Europeans, which, in our view, should become evident at sector level in coming quarters," Credit Suisse said.
 
 The same broker notes that <b>Rio Tinto</b> is set to release its fourth quarter 2011 production numbers. It forecasts Rio's share of global iron ore production at 49.6m tonnes, mined copper production at 140,000 tonnes and refined copper production at 85m tonnes.
 
 <b>Greene King</b> has earned the ire of the real ale crowd through its practice of buying up brewery groups and keeping the acquired company's tied-pubs while shutting down the brewery, but the City has generally given the management's actions the thumbs-up. In truth, the outfit may be Britain's largest ale brewer by volume but it is almost as much a food outlet business as a pubs group these days, and it is likely that food sales will once again prove the engine of growth when the group announces trading for the seven weeks to January 15th.
 
 Panmure Gordon notes that with punters reluctant, or unable, to head for the pub in December 2010 because of the fierce weather conditions, the group is facing some fairly modest year-on-year (YOY) comparatives. "We believe the pub industry enjoyed a strong YOY uplift in December sales, reflecting not only higher volumes but also higher spend. As such, we expect a similar level of LFL [like-for-like] growth for the seven weeks to 15 January [as the 4.4% increase in managed pubs in the first six weeks of the second half of Greene King's year]".
 
 Panmure Gordon also casts its eye over <b>Taylor Wimpey</b>, the house builder which will release a trading update on Tuesday. "We believe that the group's trading update on 17 January will confirm that the momentum seen in autumn has continued in the weeks since. Persimmon, for example, commented that the improved sales rates it reported during autumn had continued throughout Q4 [fourth quarter], and the group also made reference to the fact it anticipated a strong spring selling season, given the interest seen in recent weeks," Panmure Gordon said.
 
 For the whole of 2011, Panmure Gordon is sticking with its forecast of 10,000 unit completions, little changed from 2010, "as a result of its 'value over volume' approach". Panmure Gordon also thinks average selling price will remain flat at £171,000. It thinks full-year profit before tax will be £85.0m. 
 
 As for macro data, <b>consumer price inflation</b> figures for December are due out at 9:30am. The consensus forecast is for Consumer Price Index (CPI) inflation to have fallen to 4.2% from 4.8% in November, while Retail Price Index (RPI) inflation is seen dipping to 4.8% from 5.2%.
 
 In the early evening, Adam Posen, a member of the Bank of England's Monetary Policy Committee will give a speech. 
 
 
 INTERIMS
 IG Group Holdings
 
 INTERIM DIVIDEND PAYMENT DATE
 MDM Engineering Group Ltd. (DI)
 
 INTERNATIONAL ECONOMIC ANNOUNCEMENTS
 Consumer Price Index (EU) (10:00)
 Harmonised Index of Consumer Prices (EU) (10:00)
 New Car Registrations (EU) (10:00)
 Wholesale Price Index (GER) (07:00)
 ZEW Survey (EU) (10:00)
 ZEW Survey (GER) (10:00)
 
 Q3
 OSJC Center for Cargo Container Traffic Transcontainer GDR (Reg S)
 
 IMSS
 C&C Group, Experian, Greene King
 
 AGMS
 European Investment Trust
 
 TRADING ANNOUNCEMENTS
 Burberry Group, Record, Taylor Wimpey
 
 PRODUCTION UPDATE
 Rio Tinto
 
 UK ECONOMIC ANNOUNCEMENTS
 Consumer Price Index (09:30)
 Retail Price Index (09:30)
 
 
 
 <i>jh</i>
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