The Week Ahead: BA and Yell shout case for promotion

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The Independent Online

A plethora of companies report this week, with the usual mix of good and bad news to impart. For British Airways, however, it could possibly end up being an extremely good week indeed.

The FTSE group announces its quarterly reshuffle of the top 100 stocks and, going by Friday's prices, the beleaguered airline could be returning - again - to the top flight. Rocked by an unprecedented string of upsets over the past two years, BA has been demoted to the FTSE 250 twice now. The first relegation, to the shock of many, came in September 2002. It then made a swift comeback, only to be ejected once more earlier this year.

Directories business Yell, which floated on the London market in July, a year after an initial, abandoned attempt to list, is set to accompany BA into the top flight. Making room for them could be Mitchells & Butlers, the pubs group recently demerged from Six Continents, and water business Kelda.

Of course, much can change on stock markets in the shortest of periods. For example, at the close of trading last Thursday, BA would not have made the grade. The final decision will be based on Tuesday's closing prices, with the changes coming into force at the end of business on 19 September.

Elsewhere, there will be an update from the housing sector when homebuilder Bovis Homes and builders' merchant Travis Perkins post figures. The prognosis is good. Bolstered by interest rates at record lows, most in the sector have already reaped the rewards and Bovis is expected to follow suit, with some analysts forecasting a full-year upgrade at this interim stage. Likewise, Travis Perkins is one of the strongest companies in its sector and pre-tax profits are predicted to push ahead from £71.4m to around £79m.

Other companies posting figures include bookmaker William Hill, services specialist Hays, UK Coal, bus and train operator National Express, general retailer Woolworths (there is a trading update from electrical goods specialist Dixons as well) and InterContinental Hotels, formerly part of Six Continents with Mitchells & Butlers. The abysmal run suffered by all hotel groups - the 2001 terrorist attacks, the global economic slump, war and then Sars - has been well documented and the focus now is on recovery. A number of investors have started to move back into the sector, convinced that the worst has to be over, so InterContinental's predictions will be as closely scanned as its figures.

Hays is another recovery story. The group is in the middle of a major reorganisation, selling off more than half its business as it refocuses on recruitment at a predicted cost of around £12m. The short-term impact will be a slide in final pre-tax profits, from £232m to £180m.

At National Express, investors will be eager for any update on the rail refranchising process. The group is the UK's largest train operator, with nine of the 25 current franchises, and negotiations are under way with the Strategic Rail Authority about two-year extensions to its Silverlink and Grant Northern services. It is also awaiting the result of its offer for the Wales & Borders contract, and plans to bid for the Greater Anglia and ScotRail franchises.

Aerospace and defence giant BAE Systems also reports half-year figures this week. The results are unlikely to include many surprises. Since the group secured the Indian Hawk jet contract - after 20 years of talks - and a similar deal with the UK government, the stock has enjoyed strong gains over recent months.

It is also a busy week across the Channel, with a number of big names reporting. These include Accor, the French hotel chain that is in the running to take over the management of some or all of the 11 Le Meridien hotels owned by Royal Bank of Scotland, including the Grosvenor House and Waldorf. RBS expects to make a decision at the end of this month, so any comment will be gratefully received. Accor is in the running along with Hilton, US business Fairmont Hotels & Resorts and Marriott.

Elsewhere, the luxury sector is well represented, with figures from Italian jewellery specialist Bulgari, French cosmetics and fragrance business Clarins, French tie and scarf maker Hermes and LVMH, also from France and home to the champagne Veuve Clicquot and couturier Christian Dior.

All will be closely watched after last week's disappointing figures from Gucci owner Pinault-Printemps-Redoute. And despite that, investors will be hoping for signs of recovery now war and Sars, which particularly rocked the key Far East market, are over.

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