Tuesday Preview. What’s happening today!

Holiday Inns owner InterContinental Hotels (IHG) hit the headlines late last month after a probe by the Office of Fair Trading investigation raised concerns about the group’s relations with two online travel agents.

Tuesday’s interim results from IHG should bring happier news, with broker Jefferies expecting a 4% rise in sales to $881m, a 5% hike in earnings before interest and tax (EBIT) to $282m and a 7% rise in earnings per share (EPS) to 62 cents. The interim dividend is tipped to rise by one-tenth to 17.6 cents.

Revenue per available room – or revPAR in the industry jargon – is the key metric for hotels, and Jefferies reckons a 65 rise in revPAR is on the cards in the Americas and Greater China but, not surprisingly, the picture may be less rosy in Europe; Jefferies is going for a 2% year-on-year increase in revPAR in Europe. The Asia, Middle East and Africa region is seen delivering 3% revPAR growth.

“Recent numbers from Starwood and Marriott would indicate that this [revPAR growth] should be at least achievable, and could be slightly better. We estimate that every 1% on group RevPAR adds about 3% to EBIT,” the broker said.

The shares have been in demand since activist investor Trian took a stake of around 4%. Jefferies thinks expectations of a capital return are high and if there is no reference to this in the interim results then the shares could see a spot of profit-taking.

Insurance group Legal & General (L&G) releases half-year figures after what Charles Stanley’s Nic Clarke called a mixed first quarter. Cash generation and total worldwide sales were in line with expectations, Clarke says, “but looking under the bonnet although there were strong inflows into LGIM [the investment management business], savings sales were disappointing due to a weak consumer appetite.”

“There was a good performance from the International business with the L&G America doing particularly well, but this remains a small part of the overall business,” Clarke notes.

Just after midnight the British Retail Consortium will release retail figures for July with the market expecting a 0.2% year-on-year decline, following on from June’s 1.4% increase.

Industrial production figures for June are due out at 9:30 and are expected to be grisly. The market is anticipating a 3.1% fall in June after May’s 1.0% increase, while the year-on-year decline is tipped to widen to 4.9% from May’s 1.6% fall.

BBA Aviation, Clarke (T.), Corio NV, Greggs, InterContinental Hotels Group, Legal & General, Meggitt, Mondi, Premier Foods, Rio Tinto, Xstrata, Zotefoams

Sinclair (William) Holdings

Consumer Credit (US) (20:00)
Industrial Production (09:30)

Aberforth Geared Income Trust

JSC Federal Grid Company of Unified Energy System GDR (REG S)

Messaging International, Monks Inv Trust, PSG Solutions

Bellway, Playtech Ltd.

BRC Sales Monitor (00:01)
Manufacturing Production (09:30)

Babcock International Group, Mitie Group

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