Mindful Money’s Monday shares – Debenhams, Smiths Group, Booker, United Utilities

16th September 2013


The week sees market updates arrive from cash and carry operator Booker, retailer Debenhams and engineer Smiths Group – we look at how brokers are viewing the businesses right now.

Debenhams reports its full year trading update on Tuesday. The past 12 months have seen the FTSE 250 listed firm’s stock rise by 4% but a return to more seasonal weather during the group’s fourth quarter period may have seen some rebound in like-for-like sales compared to the third quarter. The firm’s shares are 25% stronger in the past six months.

Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers says: “Further strong growth in online sales is likely to again feature whilst an additional update regarding the redevelopment of its flagship Oxford Street store could be forthcoming. Prior to the announcement and with concerns prevalent about another close competitor Marks & Spencer, analyst opinion currently points towards a ‘hold’, albeit a strong one.

Wednesday sees the arrival of full year results for the FTSE 100 listed Smiths Group. A trading update back in July disappointed investors and brokers will be keen to hear the management’s latest comments in relation to its previously challenged Detection business. All the same the past year has seen its stock rise 35%. Management strategy, given the company’s recently aborted talks to sell its Medical business, have failed to agree on price, is also likely to generate investor interest says Bowman. He adds: “Pre-tax profit is forecast to materialise at around £496m, broadly flat year over year, with group revenue up by approximately 4% to £3.14bn. Ahead of the results and given on-going hopes for eventual value enhancing M&A activity, analyst opinion currently denotes a strong ‘hold’.”

Thursday sees Booker deliver its second quarter results. The past year has been good for its shares, which are up 40% over the period. Sheridan Admans, investment research manager at stockbroker, The Share Centre lists Booker as a ‘buy’. He says: “Investors will be keen to receive an update on the integration of the UK operation of Makro, which was acquired from the German company Metro. How its tentative expansion into the Indian market is progressing will also be of interest.”

Also on Admans ‘buy’ list is United Utilities which delivers a trading update on Thursday. Its shares are flat over the past year. Trading updates from utility companies are generally not something for investors to get too excited about and Admans expects the group to confirm that it is trading is in line with expectations. He says: “There may be a comment about its on-going efficiency plans which will be of interest and with the next regulatory review looming on the horizon, investors will be interested to receive any further company thoughts; however this is more likely to be included in the November results.”



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