Recruitment firm Hays posts its first-quarter results with UBS predicting 10% growth in gross profit after a 15% increase in the fourth quarter.
UBS believes company's performance will be boosted by a 16% increase in gross profits in Germany and has forecast growth in Australia and the UK of 9% and 2% respectively.
“The focus is likely to shift onto how sustainable momentum will be going into FY19 given tougher comparatives,” it said.
Despite weaker business confidence in the UK, Hays still achieved a like-for-like rise of 2% in annual gross profit in the region last year as gains in private sector job placements in IT, construction, property and office support offset declines in public sector placements such as education.
Germany continued to lead the way with record like-for-like net fee growth of 16%.
Travel business drives growth at WH Smith
Ahead of WH Smith's full-year results, UBS is forecasting £145mln of pre-tax profit, earnings per share of 110.3p and a 52.5p full year dividend.
“In its pre-close statement, WH Smith highlighted another strong performance from the travel business (where we expect LFL of 3%), and a performance in High Street in line with expectations (where we assume -3%).
“Travel is now the dominant business within the group and the focus will be on the opening programme, especially overseas, and whether there is any chance of entering the North American market.
“In the High Street business, there seems little sign yet that the value retailers are undermining the business model which seems based on premium pricing for in prime locations, combined with rotation of products and services to continue driving footfall.”
Elsewhere in the retail sector, news last month that the chief executive is to step down is a good cause for N Brown shareholders to be nervous.
Angela Spindler left at the end of September to be replaced, on an interim basis, by Steve Johnson, the chief executive officer of the group’s financial services business.
That does not bode well for Thursday’s interims given that the company said in its June trading update that, although it had posted a 0.4% increase in the thirteen week period ended June 2 (the first quarter of the retailer’s fiscal year), the growth was entirely due to a 9% rise in financial services-related activity, rather than product sales, which fell by 2.8% year-on-year.
The retailer also announced that it was pondering whether to close down its bricks and mortar shops as three-quarters of its revenue now comes from online orders.
Shareholders will be hoping for an update on those plans and also crossing their fingers that Spindler’s departure was not precipitated by a poor trading period.
Significant announcements expected
Economic data: US CPI, US weekly jobless claims