Investors Have High Hopes for GUS Spin-Offs ; THE WEEK AHEAD
Dewson, Andrew, The Independent (London, England)
Former shareholders of GUS should be in an optimistic mood ahead of tomorrow's first half results from Home Retail Group and Experian, six weeks after the groups listed as separate entities.
Experian, a consumer credit rating agency, has enjoyed a strong start to life on its own. Demand from institutional investors has driven the shares 8 per cent higher than the original listing price of 560p. Home Retail, which comprises the general retailer Argos and the do-it-yourself chain Homebase, has not done quite so well, in line with the rest of the retail sector, but the shares are still trading at a slight premium to the placing price.
Both companies have been subject to a handful of takeover rumours - the US buyout giants Kohlberg Kravis Roberts and Blackstone were the latest to be linked to Argos in weekend reports - and Experian is high on the list of favourites to get a private equity bid sooner rather than later.
Given that both companies are new to the market, forecasts are few and far between and no analyst has a pre-tax profit number pen- packed cooked meats group cilled in for Experian. However, the company is expected to report sales of $1.6bn for the period. Analysts have a bit more to go on with Home Retail, and consensus forecasts are for pretax profits of [pound]108m to [pound]113m.
TODAY: Investors are expecting good results from Cranswick, the food company that specialises in posh sausages. It reported a record first quarter back in July and the barbecue-inducing Indian summer should have been a bonus.
The acquisition of the pre Delico earlier this month for [pound]17.9m is unlikely to have any impact on the first half but investors will be hoping to hear positive noises about its impact on full year numbers as Cranswick pushes Delico's state-of-the-art facilities up to full production.
Long-suffering shareholders of the telecommunications group Thus have had something to smile about over the last couple of months. Shares in the company, spun out of Scottish-Power at the height of the dot.com boom, have rallied more than 40 per cent since the beginning of August thanks to a contract with HSBC and a broadband supply deal with schools, libraries and council offices across southern Scotland. September's trading statement indicated that the company is expecting to report a 55 per cent increase in first half revenues to [pound]255m. Results: Full year - Care UK; Education Development; Fountains. First half - Cranswick; Debt Free Direct; Detica; Hamworthy; ILX Group; Supporta; Thus Group; Workspace Group.
TOMORROW: Results last week from Land Securities put the pressure on British Land to deliver strong growth in net asset value and to deliver a bullish outlook on London rentals. …