News from Kingfisher and the computer industry, too.
After a few very busy weeks, things are starting to look a little quieter next week, but we still have some important news coming our way.
A bargain opportunity
Halfords (LSE: HFD) will report its full year on Thursday. Though the economic malaise that has hit the high street will have hurt profits a little, the figures should be pretty decent. A pre-close update last month suggested sales will be down a little on the year, but not by much, and the high-street fall-off should be at least partly offset by better trading at Halfords Autocentres.
Current forecasts suggest a dividend of around 8% on the 281p shares and, with pretty strong cover and little debt on the books, it should be safe. The shares are now trading on a prospective price-to-earnings ratio (P/E) of just 8, which is little more than half the FTSE average. Think that's a steal? I do.
Will it soar or crash?
Thomas Cook Group (LSE: TCG) has been in the news a lot over the past year, for all the wrong reasons, and we'll get interim figures on Thursday. Struggling under a mountain of debt, the high-street travel firm came within inches ceasing to trade any longer before its banks agreed a plan to save it. Now, with the share price having plunged from around the £2 mark to just 22p, to lie on a prospective P/E of under 4, is it a good recovery buy?
Well, Thomas Cook is looking likely to survive, at least in the short term, but that mountainous debt figure is the real problem. At the last year end, in September 2011, it stood at £870m, outstripping the company's total market cap of £160m more than fivefold. Some pundits are recommending buying the shares now. I'm not one of them.
A couple of steady earners
One of the biggest companies releasing news next week is the FTSE 100 multi-utility Severn Trent (LSE: SVT), which is due to release interim results on Wednesday. These suppliers of water, gas and electricity are usually bought as cash cows for their dividends, and Severn Trent is no exception with its steady payout of around 4%. But the share price has also been climbing steadily, and has put on more than 10% in the past 12 months, too, which is a pretty nice all-round reward.
Despite the problems besetting retail trading, Kingfisher (LSE: KGF) hasn't been doing too badly. The owner of B&Q and Screwfix in the UK has seen profits and dividends rising over the past few years. Profit for the year ending February 2013 are expected to be pretty flat, but the dividend is still forecast to rise, offering about 3.5% based on the current 280p share price.
Thursday's first-quarter update will give us a handle on how the current year has started, but it's likely to be overshadowed by euro fears right now, with Kingfisher operating a number of European outlets.
We have a number of companies in the software and computer services business releasing news next week. With things like banks, miners and retail hogging the limelight these days, it's a much overlooked sector, and most people won't even recognise the names of some of them.
Aveva (LSE: AVV) will kick off the week on Monday with full-year results, and a rise in profits from the provider of software to the plant, power and marine industries is expected. The 1,493p shares, on a P/E of 23, might not be a screaming bargain, mind.
Phoenix IT Group (LSE: PNX) will report its full year the same day, and it's looking more modestly valued. Shares in the IT infrastructure manager, currently standing at 197p, are trading on a P/E of just 7, while there's a 5.5% dividend expected.
AIM-listed web hosting manager Iomart Group (LSE: IOM) has seen its shares doing very well of late, having gained more than 50% in the past year. In fact, from a low of 26.5p in early 2009, they've climbed steadily to today's 137p for a nice five-bagger. Full-year results are expected Tuesday.
Notable announcements next week:
Monday: Aveva Group, First Derivatives, Gulf Keystone Petroleum, Max Property Group, Phoenix IT Group
Tuesday: Acal, API Group, Brewin Dolphin Holdings, De La Rue, FFastFill, Iomart Group, Mckay Securities, Pennon Group, Renold, Scapa Group, Topps Tiles, Torotrak, Volex, VP, Wolseley
Wednesday: B P Marsh and Partners, GB Group, London & Stamford Property, Severn Trent, Sportingbet, Telford Homes
Thursday: Frontline, Fuller Smith & Turner, Halfords Group, Kingfisher, Metric Property Investments, Tate & Lyle, Thomas Cook Group
Friday: No major news
Fool comment on this week's news:
> Alan does not own any shares mentioned in this article.