US and Europe Set to Hold Back SABMiller

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The Week Ahead

WITH ITS attempted takeover of Foster's seemingly stalled, SABMiller's trading performance will be in focus this week when the world's second-biggest brewer releases its update for the first quarter on Thursday.

The group, whose range of beverages include Grolsch and Pilsner Urquell, had a A$9.5bn (6.2bn) approach for its rival rejected last month. However, there have been few clues since over if and when it will make another play for the Australian company, which also owns Victoria Bitter, so any hints from the company on its next step will be closely examined.

In terms of its figures, which are being released at the same times as its AGM, the company raised its forecasts earlier in the month for its biggest market, Latin America, thanks in part to price cuts. JPMorgan Cazenove believes SABMiller will reveal that its operations in Africa have also continued to impress, but fears this will be overshadowed by tough trading in Europe and the States.

The broker's analysts say that in the former, its volumes are likely to have grown just 2 per cent against what they call a "very easy" comparative, adding that it "continues to suffer from intense competition from Carlsberg and Heineken".

Meanwhile, with regards to SABMiller's outlook statement, they feel it might "take the opportunity to reiterate its decision to pursue an 'affordability agenda' this year by being more selective in its price increases in certain regions to promote volume growth".


SThree starts the week by releasing its results for the first half of the year, with the recruitment company's figures coming after recent updates from a number of its listed peers. Although it admits the signs have been that "the UK is clearly still tough", Peel Hunt says "the read-across from European markets was much better".

The broker's analysts pick out the Netherlands - one of SThree's most important regions - as seeming particularly positive, while warning that "upgrades [are] unlikely at this stage in the year".

Results/Updates: SThree.


IG Group announces its full-year figures on Tuesday, with the spread-betting company having predicted last month that its profit for the twelve months will have increased 3 per cent. Espirito Santo believes that if IG's trading revenues do increase 7 per cent, as forecast, this would be "relatively robust" given such headwinds as the periods of volatility seen in the markets over the year.

Collins Stewart's Robin Savage, meanwhile, expects the group's forecasts for the next two financial years to be trimmed, predicting the results will "reveal cost pressures", and adds that IG's management are likely "to cool expectations of dividend growth above earnings growth". …