Smaller companies in the retail and technology sectors are among those seeking the limelight this week.
Investors will focus on current trading at retailer Carpetright when it reports interim results on Tuesday amid concerns that a slowing housing market has weakened demand for floor coverings, particularly laminates.
However, Carpetright has already demonstrated its ability to grab share in a flat market with like-for-like sales rising 3.3% in the first 25 weeks in the financial year.
Total sales were up by 8.8%, reflecting the benefits of new concessions in Allders department stores.
According to brokers KBC Peel Hunt, the retailer should post pre-tax profits of £31.5m for the six months to the end of October against £28m a year earlier.
Carpetright, which has 365 stores and 39 concessions in the UK and Ireland, is expected to remain on track to meet full-year expectations despite £15m of losses from the closure of distribution business Carpet Express.
Door-to-door catalogue retailer Kleeneze has apparently put acquisitions back at the heart of its strategy after a four-year gap, most recently making an initial cash payment of £6m for internet retailer iwantoneofthose.com.
Acquisitions were expected after the Swindon-based group moved to a new distribution centre near Bristol, which increased its capacity to handle additional sales. Kleeneze sells dusters, mops and other household items.
House broker ABN Amro said recent deals had given Kleeneze “significant platforms for growth”, predicting the company will report pre-tax profits of £2.4m at the interim stage on Wednesday.
This would mark a turnaround on losses of £9.2m last year, which included exceptional costs and operating losses of £11.8m – primarily from the disposal of display marketing business DMG in 2003.
Analysts expect demand for minilabs that can process digital photographs to fuel a substantial rise in sales at Photo-Me International, which operates a network of 20,000 photo booths around the world.
The group, based at Bookham in Surrey, has also started to roll out kiosks which enable digital camera users to print off images within seconds and these are touted as a key driver of future growth.
Photo-Me shares have fallen by 15% since the start of October despite the company confirming at its annual general meeting that first-half trading was in line with expectations.
Analysts expect Photo-Me’s results on Monday to include pre-tax profits of £15.1m for the six months to October 31, matching the performance of a year earlier.
Baggeridge Brick – the UK’s fourth largest brick manufacturer – is expected to show an improvement in profits when it announces its full-year results on Thursday, with analysts forecasting £7.6m against last year’s £6.2m.
The group has been buoyed by the housing boom and strong demand from housebuilders for bricks, but the recent slowdown in the property market has worried investors who fear it may not be able to sustain its rate of growth.
Pressures could also come from the rising cost of energy needed to fire its kilns in the West Midlands at Hartlebury, Kingsbury, Sedgley and Waresley. The group also operates a brick factory at Rudgwick in West Sussex.
Motor dealer Reg Vardy has already warned investors that a slowdown in the new car market since March has affected its performance in the first few months of its financial year.
How significant this slowdown has been on the group will be known on Wednesday with the City expecting profits of £17.5m for the six months to October 31, down from £19m at the same stage last year.
Reg Vardy, which has 93 dealerships and has set itself on 100 sites by the end of April, should also report that good performances from fleet sales, contract hire, used vehicle and aftermarket service businesses have continued.
Hospital software group iSoft has been transformed by its merger with rival Torex and this will be visible in its interim results on Tuesday, with pre-tax profits of £16.3m expected for the six months to October 31 against £9.2m last year.
With profits and cash flow now weighted towards the final six months of its financial year, iSoft’s management will need to confirm that the underlying business has not weakened and the outlook remains upbeat.
Investors will also seek assurances that further revenues can be generated from working with the NHS and that it is making progress abroad, particularly in Germany and Asia Pacific.
Manchester-based iSoft is currently bidding for a software deal in Hong Hong and a successful outcome would fuel confidence in its ability to secure overseas contracts.
References: EGi News 13/12/04
