The Week Ahead: As rivals wilt, will the sun still shine for Marks & Spencer?

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The Independent Online

The cooler weather has arrived but it will be Marks & Spencer's performance during the long hot summer that comes under scrutiny this week, after the unseasonal conditions triggered a string of disappointing results from its competitors.

Many high-street retailers, including Debenhams, have blamed the warm weather for restricting sales growth, but Evolution Securities retail analyst Nick Bubb thinks M&S will continue to outperform its peers. Mr Bubb is predicting that first-half pre-tax profits will jump 32 per cent to £406m and expects the group to lift its dividend by at least 8 per cent to 5.2p. "The interims will be good, so the debate now is about the second half, trading momentum and company guidance," said Mr Bubb.

But an interest rate rise on Thursday has the potential to smother any good sales news, with the Bank of England handing down its decision on whether consumers will be spending more on their mortgages. Analysts are tipping rates to jump from 4.75 to 5 per cent.

From banks to the bourse, and the London Stock Exchange reports its interim results. Investors have spent the past couple of years watching the group defend offshore takeover bids, and speculation is rife in the market that America's hi-tech exchange, the Nasdaq, is poised to launch a fresh offer. Investors will also be on the look-out for hard information about recent reports that the company is working with another exchange on a joint venture.

The dogfight between Ryanair and Aer Lingus will probably create a headline or two, with the predatory discount airline due to deliver its half-year results. Fellow Irish carrier Aer Lingus yet again rejected Ryanair's €1.48bn (£989m) takeover bid last week.

The increased security at UK airports is expected to have hit Ryanair's bottom line after British Airways said the measures had cost it £100m - some £40m more than previously estimated.

From planes to trains ,and FirstGroup delivers interim results. Barclays analyst Peter Caldwell expects Britain's biggest train operator to post a pre-tax profit of £59.8m, up from £55.5m in the same period last year.

Back to takeover talk and investors will be looking for an update from venture capital giant 3i, which has been going over the books of estate agencies group Countrywide. It is thought 3i could launch a £900m bid.

Elsewhere in the finance, Man Group reports interim results while Crosby Capital and Acambis deliver third-quarter reports.

Flying the flag for telecoms, BT Group and Cable & Wireless post interim results. The City will be seeking information on BT's much-hyped pay-as-you- go internet TV service, BT Vision. The company had said it planned to launch BT Vision this autumn, but as more leaves fall off the trees, there is still no launch date. Barclays analyst Daniel Krimholtz expects BT to post a pre-tax profit of £594m, up from £559m last time.

The ability of directories company Yell to generate profit growth offshore comes under the spotlight when it delivers its half-year results. Yell has tried to expand outside the UK, acquiring the US-based Trans-Western last year for $1.6bn (£840m) and snapping up the Madrid-based TPI for €3.07bn in April.

Investors will get an insight into whether the skies are clearing for EADS, Airbus's parent, when it delivers a third-quarter update. This has been a turbulent year for EADS, with its troubled A380 superjumbo project blowing a €4.8bn hole in its forecast profits over the next four years.

Also under pressure is Associated British Foods, which revealed in September that higher energy and commodity costs were affecting its bakery division, and that sales at its discount retail chain Primark were slowing. Barclays analyst David Liston expects the group to post a full-year pre-tax profit of £550m, down from £580m.

Meanwhile, food producer Dairy Crest, shortlisted last week for the final round of bidding in the £300m sale of Uniq's butter-to-mayo business in France, reports half year results.

From cheese to another great indulgence, beer, and SABMiller reports its half-year results after revealing last week that sales of its Polish beer, Tyskie, have climbed fivefold in the UK and Ireland since its launch in 2005. Elsewhere in the sector, Scottish & Newcastle will provide investors with a trading update for the third quarter.

But are the punters drinking beer with Punch Taverns? Investors will get some clarity when the pub group hands down its full-year result.

Hoping to indulge in a celebratory drink will be the backers of Cooper Owen, which is expected to float on the Alternative Investment Market this week. The UK auctioneer sold the first guitar played by Paul McCartney.

Rounding off the week will be engineer Invensys, which reports second-quarter earnings, while insurer Royal & SunAlliance provides third-quarter earnings.

CALENDAR

Tomorrow 6

UK RESULTS: (interim) Electrocomponents, Immunodiagnostic Systems, Ryanair.

Tuesday 7

UK RESULTS: (final) Associated British Foods; (I) Marks & Spencer, Turbotec Products, Yell; (second quarter) Danka Business Systems.

Wednesday 8

UK RESULTS: (I) Cable & Wireless, Celsis International, Firstgroup, London Stock Exchange, Shanks; (3Q) CSR, Unibet.

Thursday 9

UK RESULTS: (F) Formation, Punch Taverns; (I) 3I, BT Group, Dairy Crest, Man, SABMiller, Wincanton; (2Q) Invensys; (3Q) International Power, Royal & SunAlliance.

Friday 10

UK RESULTS: (I) BBI.

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