The Week Ahead: Dixons & SABMiller

Published in Investing on 13 January 2012

More post-Christmas updates from across the spectrum are coming our way next week.

We've had a pretty full week of retail trading updates this week. Sadly, it has been far from the best Christmas on record, with a lot of companies suffering from the downturn in spending. And we have more coming our way next week, so let's hope for some better tidings.

Fashion updates

After Next (LSE: NXT), which many believe to be one of our best managed high street retailers, released what it called a "disappointing" update, we now have news from two of its competitors.

First, on Tuesday, we'll hear from Burberry (LSE: BRBY), whose increasing popularity in rapidly developing China has provided steady growth in profits that has fed through to an eightfold rise in the share price. There are fears that the Chinese economy is slowing, but analysts are still forecasting a very good year for Burberry, even if the shares aren't screamingly cheap at around £13 and on a prospective P/E of 21.

ASOS (LSE: ASC) will follow up with an update on Thursday, and though it has seen steadily rising profits too, its share price has suffered a setback that Burberry has avoided. It rose to what many saw as a crazy price, but has fallen back by 40% from its peak of nearly £25 to today's £15. But that's still an end of year P/E of 40, so plenty more international growth is very much needed.

Boozers too

Think of Christmas spirit, and many people will think of the kind that comes in a bottle, so how have the UK's boozers done over the holiday?

Brewer and pub operator Greene King (LSE: GNK) will provide us with an interim update on Tuesday, and the year is expected to be pretty flat overall -- there's a small EPS drop and a small dividend rise expected. At the current price of 480p, the shares are on a P/E of 9.4 with a 5% dividend forecast, which perhaps looks cheap. But like some of Britain's other pub chains, there's a lot of debt on the books -- £1.4bn at the last year-end in April.

We should hear from pub chain JD Wetherspoon (LSE: JDW) on Wednesday. It's been doing well enough and has a couple of good years forecast too, with several years of steady profits having led to a better than doubling of the share price since mid-2008. A return to good dividends is expected for the year to July 2012, with a forecast yield of 3% forecast on its 424p share price, so we should find out whether Christmas trading has supported that.

SABMiller (LSE: SAB) will follow on Thursday, and an even better year is expected, which should be good news for its share price. In fact, for those looking for long term sustainable price growth, SABMiller shares are hard to challenge -- they've beaten the FTSE 100 for 11 straight years now. Will they do it again? There's a 24% EPS growth currently forecast for the year to March 2012 and more growth pencilled in for 2013, so there has to be a good chance.

More high street

Other high street trading updates will come from Dixons Retail (LSE: DXNS) on Tuesday, and Kesa Electricals (LSE: KESA), which recently reached a deal to sell its Comet chain, on Thursday.

Demand for electronic goodies, including gadgets like video game consoles, has apparently been poor this year, with both Argos, owned by Home Retail (LSE: HOME), and Game Group (LSE: GMG) suffering pretty horrendously as a result. So we'll hear more about how the market has been going.


Updates are coming our way from two oil and gas explorers, though obviously they're not affected by Christmas shopping like the shops on the high street -- Tullow Oil (LSE: TLW) on Wednesday, and Premier Oil (LSE: PMO) on Thursday.

Notable announcements next week:

Monday: Abcam, Bovis Homes Group

Tuesday: Burberry Group, Dixons Retail, Experian, Greene King, IG Group, Intermediate Capital Group, Record, Rio Tinto, Taylor Wimpey

Wednesday: African Barrick Gold, Diploma, Hochschild Mining, JD Wetherspoon, Man Group, Tullow Oil

Thursday: Aberdeen Asset Management, Associated British Foods, ASOS, Kesa Electricals, NCC Group, Premier Oil, SABMiller, William Hill

Friday: Close Brothers Group

Fool comment on this week's news:

> The Motley Fool owns shares in IG Group.

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Luniversal 13 Jan 2012 , 10:04pm



THURSDAY: Kesa Electricals, Pearson

spyknife 15 Jan 2012 , 9:25pm

3i in talks with Man Group, over a merger.

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