PREVIEW: Halfords, Wolseley and Acal set to report

Halfords said it was expecting group pre-tax profit for the year to April 1 to be between £78mln and £82mln

Numis rates heating and plumbing parts supplier Wolseley a 'hold'

The shortened week starts to get busier on Wednesday with updates from car part and bike retailer Halfords Group PLC (LON:HFD) and plumbers’ merchant Wolseley PLC (LON:WOS).

Things looked good for Halfords at the turn of the year as it reported good Christmas sales, with its highest day for total sales on December 23.

In November, 2015 it had unveiled lower first-half profit and predicted flat profits in 2016/17, but in the 15 weeks to January 15 reported a 0.3% rise in group like-for-like sales.

Halfords said it was expecting group pre-tax profit for the year to April 1 to be between £78mln and £82mln.

Broker Numis noted what it called a solid fourth quarter trading update in mid-April this year, with retail like-for-likes, up 3.1%.

Another positive like-for-like figure in cycling, up +1.9%, drove the improvement, with the second quarter downturn increasingly looking like a weather-related blip.

There was also continued progress in car maintenance, ahead by 2%, while the group’s travel division rose 9.5%, both facing very tough comparatives last year.

Analyst Andrew Wade said: “While Halfords’ share price has fluctuated significantly over the last year, reaching as high as 548p before troughing at 322p, nothing fundamental has changed over that period – it remains a mature retailer with a somewhat defensible position but limited growth opportunities."

The broker rates the shares a 'hold' and targets 400p.

Numis is ‘hold’ on Wolseley

Meanwhile, Numis rates heating and plumbing parts supplier Wolseley a 'hold' saying its value is fair at the moment.

The firm will provide quarterly revenue and EBIT figures, including LFL (like-for-like) trends and Numis expects the third quarter to show a similar pattern to the year to date.

"US should continue to show good growth in construction activities, while the impact of Industrial related slowdown should be lessening in H2 though Canada is likely to remain weak."

Analyst Howard Seymour said the UK will be impacted by the £15mln reorganisation of the chain Pipe Center throughout this year and ongoing weakness in the wider plumbing and heating market.

But in Europe, he said, there were encouraging signs in Nordic and Dutch markets in particular.

Foreign Exchange should also be a tailwind but the analyst expects expectations to remain unchanged.

Acal tipped to have strong end to financial year 

Meanwhile, analysts expect electronics group Acal to report a strong end to the financial year after a tough start to the calendar year.

House broker Peel Hunt expects the company to post adjusted pre-tax profit of £14.4mln on revenue of £287.3mln, up from £271mln a year ago.

"We see this as a compelling opportunity," Peel analyst Henry Carver said. "The shares have been slipping on very thin volumes and now trade close to their 52-week lows and the
reassuring update should provide a positive catalyst."

Those also expected to update the market include Telford Homes, Enquest, London Metric Property and Mears.

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