The Week Ahead: Brokers tip Capita to join the FTSE 100

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The Independent Online

Capita Group is tipped to make a return to the FTSE 100 this week after the latest review of the blue chip index. According to broker estimates, the support services group, which operates London's congestion charge, will replace the engineering group GKN. At the close of business on Friday, Capita had a market capitalisation of just over £2bn while GKN stood at £1.6bn.

The quarterly review of the FTSE takes place on Wednesday but the decision is based on tomorrow's closing prices. However, there are still two trading days before that and Capita's return to the top flight index, after its demotion in last year's June review, is by no means a formality. Other contenders for a place in the index include the plasterboard manufacturer BPB, the luxury goods brand Burberry and Signet, the jewellery retailer.

Among those which face relegation are Antofagasta, the copper producer which entered the FTSE 100 index only in March after Safeway's merger with Wm Morrison Supermarkets; Schroders, the fund manager; and the mortgage bank Bradford & Bingley.

TODAY: Annual results from Belhaven are tipped to see the Scottish brewer continue its impressive record of profit growth. Arbuthnot Securities forecasts a pre-tax profit of £14m, up from £10.9m last year. Over the past five years the company has tripled its profits and with this kind of record it is no surprise that Belhaven had little trouble raising £25m last June. It will use this cash to fund the expansion of its estate from 200 pubs to 300 by the end of next year.

Results: Full year - Acal; Belhaven; Charles Stanley; Hyder Consulting; Inflexion. Interims - Sanctuary Group.

TOMORROW: On the water front, things are going well at Severn Trent and this will be reflected in the group's full-year figures. Pre-tax profits should rise to £270m for the year just gone, from £250m the last time. Meanwhile, analysts are hoping for details on the company's position ahead of the latest pricing review by the industry regulator, Ofwat. Severn Trent is due to lose its chairman, chief executive and finance director in the next 12 months, so succession issues are bound to be interest the City.

The stockbroker Williams de Broe believes that First Choice is one of the best operators in the travel industry and forecasts narrowing interim losses for the group's traditionally quiet first six months. Things certainly seem to be looking good at First Choice. In March it boasted of strong winter trading and a "significant strengthening" in summer bookings. The company is known to be enjoying lower competition given the troubled state of its rival MyTravel, which is struggling under a mountain of debt. Williams de Broe forecasts losses to fall by 5 per cent to £42m.

Results: Full year - Christian Salvesen; Chapelthorpe; CML Microsystems; James Cropper; Focus Solutions; Intelek; RPC Group; Severn Trent; Warner Estate. Interims - First Choice; Victrex.

WEDNESDAY: Investors can expect Signet, the Anglo-American jewellery retailer, to report a double-digit percentage rise in underlying profits when it unveils first-quarter results. Last month's sales figures showed group revenues accelerating and basking in an exceptionally good performance over the run-up to St Valentine's Day. Signet is very dependent on the value of the dollar, and the currency's continued weakness is bound to take some shine off the results.

At the end of last week, the Yates Wine Lodge group said it had received a management buyout offer and indicated that discussions were at an advanced stage. A formal proposal could well coincide with full-year figures. About 30 per cent of Yates is controlled by the founding family, so it is reasonable to assume that they have given the management team and their private equity backers, GI Partners, the green light to bid.

The initial talk in dealing rooms was of a 130p a share take-out price, but analysts at Investec Securities believe this is too low. The broker says that 170p a share is a more sensible price and suggests that other interested parties may enter the fray, including rival pubs group Laurel, which should be able to outbid any private equity offer. Now may well be a good time to buy Yates. The group enjoyed an upturn in trading over the fourth quarter, achieving positive like-for-like sales for the first time in over two years. Profits for the year are expected to be little changed on last year's £10m.

Results: Full year - Burtonwood Brewery; Erinaceous Group; Helical Bar; Kewill Systems; Telecom Plus; Yates Group. Interims - Signet; Ingenta.

THURSDAY: Results: Full year - Alba; IFX Group; Teather & Greenwood; Wincanton. Interims - Dewhurst.

FRIDAY: Results: Full year - Scipher. Interims - None.

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