Bookmaker Ladbrokes has made a bad fist of adapting to the online world, but 2015 should represent the company's nadir, claims broker Peel Hunt.
In a preview of the bookie's 2015 results, the broker is hoping that there will be some signs of progress on the turnaround, especially with the digital strategy.
The broker is forecasting underlying earnings (EBIT) of around £71mln, versus £125mln in 2014, which it says is about 5% below consensus.
“There have been many false dawns at Ladbrokes, but we now believe the right digital strategy is being pursued, while Corals would inject a highly respected management team together with proven online expertise. There are risks, but our base case is founded on the view that the upside is greater than the downside,” Peel Hunt said.
Banking results season continues with Standard Chartered the next to report.
In a field not overly blessed with admirable performers, the emerging markets-focused bank has been one of the worst performers so far this year, notes Investec.
It forecasts revenue of $15.7bn, while its earnings per share forecast of two cents is 77% below the market consensus.
Hotels group InterContinental Hotels is expected to announce a special dividend of around $1bnm but Numis Securities does not expect Tuesday's results to act as a catalyst for the shares.
The broker believes growth has peaked.
“After 71 months of RevPAR [revenue per available room] growth in the US, we expect continued growth but at a slower pace. US industry RevPAR growth was 6.3% in 2015. Having reported +6.7% in Q's 1-3, Q4 weakened; +6.5%; +4.3% and +3.2% in Oct, Nov, Dec respectively,” Numis noted.
“In the wake of Marriott/Starwood merger we believe that there will be more M&A/consolidation activity. Scale drives lower unit costs, helps to develop brands and brings a potential change in commercial relationships with OTAs. IHG argues that it already has the scale and the brands to enable it to compete effectively. However, we believe that further consolidation may drive a strategic re-think,” the broker added.
Significant announcements expected
Finals: Croda International (LON:CRDA), Drax Group (LON:DRX), GKN (LON:GKN), InterContinental Hotels Group (LON:IHG), John Wood Group (LON:WG.), Ladbrokes (LON:LAD), Meggitt (LON:MGGT), Morgan Advanced Materials (LON:MGAM), Persimmon (LON:PSN), Provident Financial (LON:PFG), Standard Chartered (LON:STAN), Unite Group (LON:UTG), Vitec Group (LON:The) (LON:VTC)
Interims: BHP Billiton (LON:BLT), dotDigital Group (LON:DOTD), Galliford Try (LON:GFRD), Just Retirement Group (LON:JRG), Pan African Resources (LON:PAF)
Economic: US – CB Consumer Confidence, Existing Home Sales