The Week Ahead: Stagecoach & Ocado

Published in Investing on 22 June 2012

Results from Carpetright and Greene King as well, in a quiet week.

We've got a relatively quiet week ahead of us for company results next week, with a lot of companies tied up with their AGMs at this time of year. But we do have a few coming.

Travel update

Tuesday will bring us full-year results from rail and bus operator Stagecoach (LSE: SGC). At the time of its pre-close update in April, things were looking good, with like-for-like revenue growth expected in all four of the company's divisions. The US transport division, which accounts for more than 10% of overall business, is forecast to grow its revenues by 14%, which is the strongest of them all.

So what's Stagecoach looking like as an investment? The dividend for the year is expected to come in at only around 3%, but the shares have fallen this year, and despite having put in a good three-year performance, they're on a price-to-earnings (P/E) ratio for the year of under 10, which is not stretching.

Online groceries

Tuesday also brings us important half-time results from Ocado (LSE: OCDO), the online groceries business that started out delivering for Waitrose supermarket. Following a brief rise after its flotation in mid 2010, Ocado shares slumped as investors worked out that its economics were questionable and significant further funding would be needed to get its revenues up high enough.

We still need to see how the firm's warehouse expansion is to be paid for, and how long it will be before profit levels can justify the current share price. I reckon it might be some time yet.

Supermarkets tend to be relatively safe investments during troubles economic times, and the Motley Fool report "Top Sectors Of 2012" takes a look at the ones most likely to see us through to better times. I'd recommend getting a copy while it's still free.

Carpets and booze

Carpetright (LSE: CPR) is the third company releasing full-year results on Tuesday, and its April pre-close statement told us that the business is suffering from the European consumer squeeze. In all of its divisions, in the UK and Europe, like-for-like sales are down around 4%. But at least year-end debt is going to be down, by about £20m on last year.

Profits this year are going to be poor with practically no dividend, and there isn't likely to be much of a recovery for another couple of years -- it's no surprise that most analysts are recommending dumping the shares.

On Thursday, Greene King (LSE: GNK), will release full-year results, and they should be decent. There'll be nothing sparkling, with earnings expected to be flat, but we should see a dividend of around 4.6% with the shares on a P/E of about 10. Net debt is large, though, as is often the case with operators of pub chains.

And more...

The same day we'll have annual results from ReNeuron (LSE: RENE), the stem technology researcher. The firm is not in profit yet, but it has high hopes for its ReN001 stem cell therapy for the treatment of the effects of a stroke. It is currently in clinical development.

Online gambling operator Betfair (LSE: BET) will publish annual results on Friday. Profits have been up and down, and this year is not expected to be great, but forecasts for 2013 are stronger.

AIM-listed Lo-Q (LSE: LOQ) will release interim figures on Tuesday, and they should be good. The specialist in virtual queueing technology, used in places like theme parks, has seen its share price rise nicely over the past few years, growing from a mere 16.5p in 2008 to £3 today.

There are trading updates coming from a number of companies, too, including Kier Group (LSE: KIE) on Monday, Serco Group (LSE: SRP) and Petrofac (LSE: PFC) on Tuesday, and Keller Group (LSE: KLR) and Wood Group (LSE: WG) on Friday.

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Notable announcements next week:

Monday: Bango, City of London Group, Cohort, Essar Energy, Immunodiagnostic Systems Holdings, Kier Group

Tuesday: Carpetright, Domino Printing Science, Idox, Lo-Q, Ocado Group, Petrofac, Porvair, Serco Group, Stagecoach Group, Victoria PLC

Wednesday: CPP Group, Northgate, Plastics Capital, Safestore Holdings, Standard Chartered, Sutton Harbour Holdings

Thursday: Debenhams, Greene King, ReNeuron Group, DS Smith

Friday: Berkeley Group Holdings, Betfair Group, eServGlobal, Keller Group, Wood Group

Fool comment on this week's news:

> Alan does not own any shares mentioned in this article. The Motley Fool owns shares in City of London Group and Standard Chartered.

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