The Week Ahead: Brokers hope for profit growth from BAE

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The Independent Online

The results season starts to hot up this week with a smattering of FTSE 100 companies and a long tail of smaller fry due to report over the next five days. Arguably the most interesting will be BAE Systems. Its announcement will be closely watched, being the first since the retirement as chairman of Sir Dick Evans, one of the great survivors of the oft-troubled defence group.

Efforts by BAE to find a US partner have proved abortive, while the relationship between the UK's prime defence contractor and its main customer, the Government, continues to be tempestuous. The strategic direction of the company under the chief executive, Mike Turner, will be under the spotlight.

BAE has been demoted from lead role in managing the contract to build Britain's new generation of aircraft carriers, and there are suggestions it is ready to get out of shipbuilding altogether. However, it has just increased its manufacturing capability with the acquisition of its rival, Alvis. Brokers are looking for a decent growth in half-time profits from £333m to anywhere between £360m and £390m on Thursday.

TODAY: Friday's news of a €45m (£30m) fine levied on IMI, resulting from a European Commission cartel investigation, will add interest to today's interim results. The fluid power-to-beverage dispenser group sold the copper tube operation that was the subject of the Commission's scrutiny back in 2002. Even so, the broker Williams de Broe reckons interim profits will rise from £68.3m to £75m.

Results: Full year - none. First Half - Abbot, Adventis, Bond International, IMI, Star Energy, Taylor Nelson Sofres, Travis Perkins, Vitec, and William Hill.

TOMORROW: There will be a lot of happy shareholders in Cairn Energy hoping that its interim results will be accompanied by news of yet another oil find in India's Rajasthan province. After a series of finds there, the groups shares have soared to £15 from less than £4 a year ago. An update on drilling is promised, which is likely to eclipse an expected fall in net income from £26.3m to about £15m for the half year.

The focus will be slightly different at Hays. It once spanned chemicals, logistics, IT services, private mail and personnel, but has been breaking itself up over the past 18 months. Itsfull-year figures are expected to show a dip from last year's profits of £179m.

Results: Full year - Hays, Linx Printing, PZ Cussons, SurfControl, Thorntons, Whittard of Chelsea. Half year - Aegis, Antofagasta, Axon, Brit Insurance, Britannic, Cairn Energy, iTouch, John Wood, Lavendon, Meggitt, nCipher, Psion and Robert Walters.

WEDNESDAY: A trio of construction groups' trading updates this week includes interim results from Carillion and Interserve on Wednesday. The former has seen its shares recover after last year's setbacks. It is promising another special dividend, this time of 1p a share. The halfway surplus is set to be about £25m to £26m. It should also be "steady as she goes" at Interserve. A number of juicy-looking contracts and preferred bid victories will not affect the interim profits, which Altium Securities reckons will come in at £18.2m underlying, up from £15.8m before.

Results: Full year - Sygen, Teesland. Half year - Cambridge Antibody Tech (Q3), Carillion, Chorion, Derwent Valley, Gallaher, Interserve, Nestor Healthcare andPaladin Resources.

THURSDAY: As well as BAE, half-year figures are expected from the third major construction company,Mowlem. The group shocked the market in June with a profits warning, blaming cost overruns for an exceptional charge, likely to be £12m, which will hit these figures. And there will be plenty of attention paid to ITV. Questions will be asked about the continued strength of the advertising revival. Bear Stearns is looking for pre-tax profits of £114m at the halfway stage.

Results: Full year - Avingtrans, Galliford Try, McBride, Town Centre Securities, Vebnet. Half year - Arriva, BAE Systems, Easynet, InterContinental Hotels, ITV, John Menzies, Kidde, Mowlem, Oystertec, Ramco Energy, Venture Production, Wyevale Garden Centres.

FRIDAY: Results: Full year - NXT. Half year -Premier Foods and Royal Doulton.

Economics Diary

TODAY: UK - BRC retail sales monitor (Aug). US - Public holiday: Labor Day.

TUESDAY: UK - Manufacturing output (Jul). Eurozone GDP (first revision) Q2. Germany - Industrial production (Jul).

WEDNESDAY: US and Canada - interest rate decisions, Alan Greenspan before House Budget Committee, Federal Reserve Beige Book.

THURSDAY: UK Interest rate decision, Trade in goods & services (Jul). Japan Interest rate decision.

FRIDAY: Japan gross domestic product (first revision) Q2. Ecofin meeting. US - Producer price inflation (Aug).