The Week Ahead: Figures due from Foxtons, Marshalls, Stagecoach and Hays
PUBLISHED: 06:00 24 August 2014
Results from estate agent Foxtons and paving specialist Marshalls this week should show how they have benefited from the economic recovery and thriving housing market while other companies reporting include bus and train operator Stagecoach.
Estate agent Foxtons is expected to reflect the buoyant housing market when it posts half-year results on Wednesday. Analysts at Canaccord Genuity predict the London-focused chain will report first-half adjusted earnings up by a quarter at £24.4million on sales 17% higher on a year ago at £73.2m.
In April, the group reported first quarter sales up 19.2% to £34.1m and adjusted earnings 44% ahead at £10.9m. The rise was driven by commission fees which jumped 41.1% to £17.6m, although revenue from lettings was broadly flat at £15m as a resurgent house sales market dampened down demand for rented property.
Brokers at Numis said: “The one constraining factor to growth is the low levels of available stock, but with Foxtons’ extensive marketing capabilities and active approach to listings we suspect the group will be outperforming the wider London market in this respect.”
The growing economy is expected to boost profits at landscaping and paving specialist Marshalls when it posts half year results on Thursday. The firm revealed last month that revenues rose 15% to £180m in the six months to June 30, as sales lifted across a range of its markets.
The company, which landscapes public areas and takes on private commissions, said its public sector and commercial work grew 19% during the period. This area of work represents 62% of group sales.
It added that its domestic residential market, which accounts for 32% of revenues, lifted 4% in the period compared with a year ago, while its international division, launched in 2011, grew 44% over the period, although it only accounts for 6% of group sales.
Edison Investment Research analyst Toby Thorrington said growth at the firm’s public sector and commercial unit seemed to show the “cyclical recovery starting to take hold.”
Analysts at Panmure Gordon estimate the firm’s full-year pre-tax profit will jump 52% to £19.7m, on sales up 9% to £335.1m.
Transport operator Stagecoach will deliver a first quarter trading update on Tuesday as it continues to vie for new rail franchises.
The firm is one of three operators that has just been shortlisted to run the First TransPennine Express operation, with the winner due to be announced in October 2015. Stagecoach, which runs bus and rail services in the UK and has operations in North America, will compete with Keolis and incumbent FirstGroup to run the route.
Stagecoach was boosted in June when Virgin Trains was told it will retain its West Coast mainline franchise until 2017. It has a 49% stake in the venture with Sir Richard Branson.
Stagecoach’s operations also include South West Trains and East Midlands Trains but, over the last year, it has lost out on new Thameslink, Southern and Great Northern rail franchises.
Analysts at HSBC said its “bull case” for the business was built on rail franchise wins and the “steady performance” of the rest of the business.
Stagecoach reported full-year revenues up 4.5% to £2.9bn in June, with pre-tax profits 2% higher at £180.7m, driven by its regional bus division, which carried more passengers than a year earlier.
Brokers at Deutsche Bank said the performance of the firm’s operations in the US, where it runs around 2,400 bus and coaches, was “marginally disappointing” after bad winter weather and aggressive pricing from a local coach competitor in Chicago.
But the analysts said the continued roll-out of the group’s Megabus service in the US this year would add to profits.
Analysts at Panmure Gordon forecast full-year pre-tax profit in 2015 at Stagecoach will lift 4.1% to £188.2m on sales up 6.9% to £3.1bn.
Recruiter Hays is expected to announce a strong set of full-year results on Thursday as firms hire more staff as a result of the recovering economy.
The business reiterated last month that it expects to see operating profits rise nearly 12% to around £140m, as it gained more fees for recruiting staff in the UK and continental Europe.
It said the UK and Ireland, which accounts for 35% of group net fees, saw like-for-like fees grow 11% in a fourth quarter trading update to June 30.
Hays added that construction, property and IT sectors grew fees by 20%, from a year ago, while accountancy and finance lifted 17%.
The group added that fees were split fairly even around the country with Scotland, Northern Ireland, the North, North West, Midlands, the East of England, the South Coast and the Home Counties all growing by more than 10%.
In continental Europe and the rest of the world, which accounts for 41% of fees, the firm enjoyed 7% like-for-like sales fee growth compared to a year ago, including, a 7% rise in fees in Germany and France, with 12 other countries in the region producing a rise of more than 10%. But in its Asia Pacific market, which accounts for 24% of fees, revenues from fees were flat. In Australia fees fell 7% in a subdued market, although Hays adds it has “now seen broad-based stability in activity levels for six months” in that country.