LONDON (Thomson Financial) - The following is a compilation of UK smaller
company results due out in the two weeks to May 30.
MONDAY MAY 19
Solid H1 EBIT growth is expected from Care UK Plc., the health and social
care provider, but profits and earnings are expected to be impacted by higher
interest charges.
Sahill Shan of Brewin Dolphin looks for EBIT growth of 35 percent for the
six months to end-March 2008, but at the pretax level, he forecasts profits of
7.9 million pounds, marginally up on the previous year's 7.1 million for
fully-diluted EPS of 10.2 pence against 9.7.
Shan will be looking for news of additional contract wins (if any) in Social
Care, and an update on the sale and leaseback initiative flagged at the prelims
for around 20 percent of Residential beds. Also of interest will be news of
progress within Healthcare, margin news in Community -- given peer woes -- and
an update on the Wave 2 ISTC contracts still to reach financial close.
The analyst sees modest scope to upgrade his 08 numbers, but favourable
contract newsflow in Social Care should feed through positively for 09, he says.
Cranswick Plc.'s Q4 update was more encouraging than Q3's, suggesting
margins were set to improve -- and analysts believe there is also the prospect
of possible earnings upgrades.
The group is making positive progress in its price negotiations. Indications
are that there is a general acceptance among food retailers that price rises are
necessary and, while the negotiation round has not yet been completed, the
outcomes seen so far provide encouragement.
Cranswick is achieving price increases in the primary processing part of the
business as supply tightens and anticipates similar success in further product
processing to offset increasing raw material costs resulting from global
commodity price rises and the strong euro.
Total sales for the year were 21 percent higher than the previous year on a
like-for-like basis with food sales 20 percent higher and pet sales 28 percent
ahead.
In the fourth quarter, sales of food products increased by 20 percent and
all product categories showed double-digit growth. During the quarter, the
production of premium bacon was successfully consolidated into the new factory
at Sherburn.
Turnover in the pet division, which accounted for 8 percent of total company
sales in the quarter, was up by 44 percent due to a combination of volume gains
and input cost recovery in the pet food business. Total sales in the quarter
were up by 19 percent on a like-for-like basis.
Andrew Saunders of Panmure Gordon sets his sights on year to March 2008
pretax profits of 33.5 million pounds, marginally up from the previous year's
32.4 million pounds, for EPS of 51.2 pence against 49.4. Analysts look for a
short 20 pence dividend, up from 18.1.
Mitie Group Plc., the UK support services company, continues to perform in
line with management expectations and it remains on track to complete another
successful year.
The order book has continued to grow and by February, the company had
secured 97 percent of revenue for the financial year.
Meanwhile, conditions remain favourable in Mitie's chosen markets and good
organic growth continues to be reported across each of the Facilities, Property
and Engineering Services divisions.
Andy Brown of Panmure Gordon predicts year to March 2008 group pretax
profits of 69.5 million pounds, up from the previous year's 58.2 million pounds,
for EPS of 14.9 pence against 12.3. The analyst expects the payout to rise to
5.9 pence from 5.1.
TUESDAY MAY 20
Trading at RDF Media Group Plc., which has received an indicative cash
approach from management, is in line with its expectations. Visibility is good,
given some shift of U.K. production business to 2009 post the hiatus last year,
but also due to strong commissioning performance in the United States and
Children's business.
The Board confirmed in its March update the lifting by the BBC of its
commissioning pause on all RDF's production companies and divisions. The group
can now attempt to rebuild normal commissioning relations post last year's
Monarchy issues, according to Steve Liechti.
The analyst forecasts year to January 2008 pretax profits of 5.6 million
pounds, down from 7.7 million pounds, for EPS of 10.3 pence against 15.1. He
expects the payout to rise to 3.90 pence from 3.00, nevertheless.
Over at Altium, Roddy Davidson looks for pretax of 5.3 million pounds, EPS
of 8.5 pence and a dividend of 3.5 pence.
WEDNESDAY MAY 21
Year to March 2008 group revenues at Business Post Group Plc. increased by
10.1 percent on the previous year. Excluding the revenues from the FedEx
contract, which terminated on April 30 2007, underlying Group revenue increased
by 16.5 percent.
The company continues to see good growth in its B2B parcels business which
represents around 80 percent of parcels revenues. In B2C, which represents 15
percent of the parcels business, Business Post is seeing an improving trend of
performance.
Revenues in the Mail business, UK Mail, increased by some 50 percent on the
previous year, derived from both new contract wins and substantial further
business from existing customers. The company now handles some 10 percent of all
mail collected in the U.K.
Revenues in Specialist Services are now recovering with the fourth quarter
showing growth. The Courier business, now trading under the UK Mail brand, has
recently won a number of new same-day contracts.
Wayne Gerry of Dresdner Kleinwort left his numbers unchanged following the
April update. He forecasts year to March 2008 pretax profits of 14.0 million
pounds, up from 11.5 million pounds, and EPS of 17.66 pence against 14.55. He
looks for a same-again dividend total of 17.2 pence.
The recent update from The Paragon Group of Companies Plc. put underlying
interim operating profits marginally lower than the comparative period's 40.2
million pounds.
Landsbanki's Ian Poulter is looking for an operating figure of 38.9 million
pounds for the six months to March 2008. The analyst anticipates total income of
89 million pounds, slightly down on last year's 90.2 million pounds.
Given the constraints on Paragon's lending, total advances will be some 50
percent less than in H1 2007 when gross lending was just over 1.9 billion
pounds. Meanwhile, the private rented sector remains robust with high levels of
tenant demand and strong rental growth.
The group has flagged exceptional costs of up to 10 million pounds, relating
principally to the recent rights issue and to staff redundancies (the group
headcount is expected to be some 30 percent lower than at the beginning of the
financial year).
In addition, there will be a negative movement in fair value for hedging
instruments as a consequence of significant yield curve movements. While that
could imply negligible H1 2008 retained earnings, Poulter has pencilled in
negative fair value adjustments of 10 million pounds -- which he hopes is
conservative -- and which he doesn't treat as exceptional.
THURSDAY MAY 22
Q4 figures from Mothercare Plc., the retailer of parenting and children's
products, provided more evidence of the company's advances on a number of
dimensions. Upgrades were limited to 2007/08, but the upcoming integration and
property optimisation reviews could, says Matthew McEachran of Kaupthing Singer
& Friedlander, provide a catalyst for future years.
Also, strong cash flow in 2007/08 should help offset the likely cash costs
of these exercises, he added.
On the back of a strong Q4 and pre-close update, McEachran increased his
year to March 2008 pretax profits forecast by 2.4 million pounds, or 7.3
percent, to 35.0 million pounds. The group made 22.6 million pounds in the
previous 12 months.
The analyst's prediction would throw up EPS of 28.9 pence against 22.3, from
which a 12.1 pence payout, up from 10.0, is envisaged.
McEachran believes the results event will be more about future developments
than anything else and, in particular, the update of Early Learning Centre's
integration and the United Kingdom property optimisation programme.
Both of these are likely to incur exceptional costs, including some cash
costs. However, McEachran's analysis suggests that cash costs will not only
generate a rapid payback but also be offset by a stronger cash flow in 2007/08
than had originally been anticipated.
His analysis shows that these two programmes could yield very significant
long-term benefits to profits, especially in the United Kingdom where EBIT
margins of 5.5 percent have scope to step up several points.
WEDNESDAY MAY 28
BSS Group Plc., a distributor to specialist trades, said in April that
trading across all divisions remained positive and, following a particularly
strong final quarter, the board was confident that revenue and earnings for the
full year would be slightly ahead of market expectations.
Following the update, Panmure Gordon's Andy Brown stepped up his year to
March 2008 pretax profits estimate to 55.6 million pounds from 54.3 million
pounds, for revised EPS of 31.8 pence. For 2008/09, the analyst has increased
his pretax prediction to 62.4 million pounds from 61.3 million pounds, for EPS
of 35.7 pence. The group made 47.3 million pounds pretax in 2006/07.
Q3 trading at rail and plant services group Jarvis Plc. continued to improve
on the first two quarters, but the pace of recovery was slower than originally
forecast.
The increase in activity levels in Rail and Plant during Q3 resulted in
improved profit and cash performance compared with the first two quarters and
against the same period last year.
Jarvis continues to incur losses in its freight business, but expects a move
to the black as the bulk coal haulage contract with E.on UK. kicks in.
While the pace of the group's recovery has been slower than originally
anticipated, executive chairman Steve Norris is confident the group is still on
track to report the best set of results since 2003. He also believes prospects
for the Rail business remain good given the future programme of enhancement
projects planned by Network Rail.
In the meantime, Geoff Allum of KBC Peel Hunt looks for year to March 2008
pretax profits of 6.0 million pounds, a swing from losses of 700,000 pounds.
Once again, no dividend is anticipated.
tf.TFN-Europe_newsdesk@thomson.com
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