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Thursday's agenda: Royal Mail looking for Christmas boost

Last updated: 04:30 22 Jan 2015 AEDT, First published: 05:30 22 Jan 2015 AEDT

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The furore over Royal Mail’s flotation has mostly died down, leaving pundits to concentrate on the firm’s less than stellar trading performance.

Floated at 330p, the shares are now trading at around 430p, well below their all-time high of 617p, with the rot setting in after May’s full-year results in 2014.

“Investors will be keen to see how the company performed over the important Christmas period, especially with regard to the number of parcels and its control of costs,” opines Sheridan Admans of The Share Centre.

“Both aspects will be important for the group in order to hit its targets for the year. Other areas to note will be any further comment regarding its restructuring, updates on property assets and the growing threat of competition,” he adds.

On the retail front, Christmas trading updates are expected from electrical goods seller AO World and cards and gifts vendor Card Factory.

Defence group Chemring is trading at around the third of the level it was four years ago, but things seem to have stabilised after a period of profit warnings.

Broker Panmure Gordon thinks the company is one step ahead of market expectations, with an order book at the end of October totalling around 1.2 times 2014 revenues.

The company is due to release preliminary results on Thursday.

“The balance sheet is looking a lot healthier with net debt at £136m compared with £249m a year ago. We expect top line growth, benefits of restructuring and recovery at Kilgore to boost operating profit by 19% in FY2015,” Panmure Gordon said.

“We believe that two-thirds of profit growth forecast in FY2015 is underpinned by self-help measures, with improved top line driving the rest of profit growth,” the broker added.

Significant announcements expected

Full year results: Chemring (LON:CHG), Safestore Holdings (LON:SAFE)

Half-year results: Findel (LON:FDL), Ilika (LON:IKA), NCC Group (LON:NCC)

Trading update: AO World (LON:AO.), Card Factory (LON:CARD), Countrywide (LON:CWD), EMIS Group (LON:EMIS), Fevertree Drinks (LON:FEVR), Paragon Group of Companies (LON:PAG), Royal Mail Group (LON:RMG), St James’s Palace (LON:STJ), Workspace Group (LON:WKP)

Economic news: Governing Council of the ECB: monetary policy meeting in Frankfurt – ECB, Public sector finances, December 2014 – ONS, Quarterly Industrial Trends Survey – CBI, Trends in Lending – Bank of England

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