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Week ahead - Is Merlin on the right track?

Other updates come from paving specialist Marshalls, SSE Group, Thomas Cook Group PLC and Mothercare
Pictured is a roller coaster track
Merlin Entertainments is the owner of Alton Towers - site of a tragedy in 2015

How will future growth aims be met and how are international attractions performing?

These are two questions investors in London-listed Merlin Entertainments (LON:MERL) will be asking when the company issues a first quarter trading update next week.

It's one of a number of big corporate updates next, week, which also includes statements from paving specialist Marshalls PLC (LON:MSHL), SSE Group PLC (LON:SSE) Thomas Cook Group PLC (LON:TCG) , Vodafone PLC (LON:VOD) and Mothercare PLC (LON:MTC).

2015 a significant challenge

2015 was a significant challenge for Merlin after the horrific accident at Alton Towers in June, which resulted in two female passengers on the ‘Smiler’ ride suffering leg amputations.

Three others were also seriously injured when a cart collided with a stationary carriage on the same track. The firm has pleaded guilty to a related offence and clearly now wants to move on.

Broker The Share Centre rates the shares a 'hold' and said: "Merlin’s performance will be very much in focus as it enters the busy summer trading period.

"Full year results in February confirmed that 2015 was a very challenging year for the group following the serious accident at Alton Towers, and it recently pleaded guilty to an offence relating to that."

The broker notes Merlin has announced three new growth targets for 2020.

Vodafone investors looking for acquisition signs

In Vodafone's Q4 results on Tuesday, investors will be looking out for any acquisition signs given the firm needs to catch up with rivals who already offer quadplay services, notes the Share Centre, which rates the mobile coms giant a 'buy'.

They will also be looking for further progress on Project Spring, the multi billion investmenbt programme to improve the network.

Spring was launched in 2013, with plans to invest more than £20 billion by 2017.

Adverse currency movements should not be such an issue for the fourth quarter and organic growth through the year has been better, reckons the broker.

European markets should show better stability and the total number of customers globally should show a steady improvement driven by increasing penetration in the emerging markets and demand for data on the go, it adds.

Mothercare in focus

Meanwhile, City firm Numis has an 'add' stance on mother and toddler retailer Mothercare (LON:MTC), which reports final results on Thursday, May 19 and traders will be keen to see how this part of the High Street sector is faring.

The firm recently reported a fourth quarter trading update, which led to downgrades to consensus PBT (pre-tax profit) forecasts of around 2% for full year 2016 and around 35% for full year 2017, mainly down to the deterioration of trading in the International division.

But analyst Matthew Taylor highlighted that, despite the downgrades, the group is still expected to deliver pre-tax profit growth of 50%, albeit part-aided by the rights issue funding, in 2016 and 8% in 2017.

UK LFL (like-for-like) progress in Q4 remained healthy at over 2.1%, backed by over 5.6% growth in online sales, which the broker viewed as a "solid achievement".

"We expect the UK business to break even in H2 FY16 and move back into profit in FY17, despite higher depreciation costs," said the Numis analyst.

Numis has also been thumbing through holiday group Thomas Cook's details  and forecasts that the company will report a loss of c.£180m, compared with a loss of £173m in the prior year, when it reports next year.

German market for Thomas Cook very weak

The German market has been very weak, demand for Turkey (an important market) for TCG has fallen away and Sharm and Tunisia have been, in effect, closed, it said..

"Bookings across the group, we believe, continue to be disrupted by the volatile geopolitical backdrop with customers postponing their decisions, leading to a later booking pattern."

Elsewhere, results from the big six energy groups are always keenly awaited and next week's offering from SSE is sure to catch headlines.

In January, it vowed to cut UK household gas bills but confirmed an expected dividend hike. It faced criticism that the bill cut was too little, too late.

The group claimed it was its third price reduction in a row and said it had significantly reduced the number and duration of power cuts experienced by network customers.

Broker Whitman Howard reckons its figures for the 2015/16 year are in line with management expectations, and it repeats a target price of 1,536p. The current price of the share is 1,535p.

"However, SSE is facing a number of headwinds, and we still see it as a Hold at current levels, with total return upside being 6%," it added.

The broker added it is awaiting the final decision of the Competition and Markets Authority (CMA) in its energy supply review by June 25, which, it says, it ultimately expects to be reasonable.

In small cap world, Union Jack Oil PLC (LON:UJO) is also reporting final results next week, and investors will be looking towards the production start at Wressle field east of Scunthorpe, in which it has a stake, as well as more colour on other projects the firm is involved it, at what is a volatile but interesting time for the sector.

Significant Announcements expected - 

Monday May 16

British Land Co PLC (LON:BLAND), ICAP PLC (LON:IAP), Lonmin PLC (LON:LMI)

Tuesday May 17

Vodafone PLC (LON:VOD), Premier Foods PLC (LON:PREM), Land Securities Group Plc (LAND)

Wednesday May 18

SABMiller PLC (LON:SAB), Burberry Group PLC (LON:BRBY), SSE plc (LON:SSE), Marston’s plc (LON:MARS), Marshalls PLC (LON:MSHL).

Thursday May 19

Royal Mail PLC (LON:RMG), National Grid PLC (LON:NG.),  Mothercare plc (LON:MTC),

Thomas Cook Group PLC (LON:TCG),  Mitchells & Butlers PLC (LON:MAB), Britvic PLC (LON:BVIC), Hargreaves Lansdown PLC (LON: HL.), Merlin Entertainments PLC (LON:MERL).

Friday May 20

Close Brothers Group PLC (LON:CBG), Future PLC (LON:FUTR), Industrial Multi Property Trust PLC (LON:IMPT), Spectris plc (LON:SXS


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