The Week Ahead: BT set to ring up another quarter of growth

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The Independent Online

BT is expected to continue to benefit from its investment in its IT services unit, BT Global Services, when it reports second-quarter results.

The US investment bank Citigroup expects BT to report a third consecutive quarter of earnings growth, after stripping out the cost of staff leaving the company, with an increase of 1.8 per cent anticipated. Broadband trends will continue to be a focal point with the number of unbundled lines a key metric and wholesale line rental take-up also significant.

Citigroup expects BT's retail broadband share to duck to 27 per cent from 31 per cent in the first quarter with revenue under pressure following significant promotional activity. BT could also spring a surprise by paying out a higher-than-expected interim dividend. Market expectations point to a 5.08p-a-share dividend on revenue of £4.9bn.

TODAY: Results: First half - Electrocomponents; Immunodiagnostics; Ryanair.

TOMORROW: Following on from Tate & Lyle last week, Associated British Foods will report full year numbers. The broker Panmure Gordon expects ABF to report a slight decline in full year earnings per share due to a sharp fall in profits from British Sugar. However, there should be better news from Illovo, its South African operation, and Primark, the low-cost fashion retail arm of the business. Panmure expects to see 35 per cent growth in sales at Primark, helped by the conversion of Littlewoods stores, with full year pre-tax profits hitting £559m.

Marks & Spencer has been one of the few bright spots on the high street over the past few years, and the shares stand at an all-time high. Analysts expect the group to report another good set of numbers, with pre-tax profit for the first half rising to about £414m, well up on the £308m in the same period of 2005. In a tough trading environment and amid stiff competition, Marks & Spencer seems to have regained its position as the leading UK clothing retailer.

Results: Full year - Associated British Foods. First half - Danka; Marks & Spen- cer; Turbotec Products; Yell.

WEDNESDAY: CSR, the bluetooth microchip designer, has taken a hammering over the past month after it warned revenues would be 5 per cent lower than previously forecast. For some investors, the 33 per cent fall in the share price since then is not justified, but there was so much good news in the price beforehand there are plenty of bears who think the shares still look expensive. The revenue warning came on the back of one major customer cutting its orders, but if any others are considering doing the same margins and revenue will be hit again.

If being the chief executive of a company is all about the share price, Clara Furse has done a great job at the London Stock Exchange. The shares have more than trebled since she took the top job, but most of that is down to a succession of failed takeover bids and corporate activity speculation.

The shares are not cheap, trading on 25.9 times forecast 2007 earnings, but, with Nasdaq sitting on a 25.4 per cent stake, they are likely to remain that way. That said, London has become the ex-change of choice for foreign firms looking for a second listing or to avoid Sarbanes-Oxley, and the LSE should show strong growth.

Results: Full year - Fenner. First half - Cable & Wireless; Celsis International; CSR; FirstGroup; London Stock Exchange; Shanks. Third quarter - Unibet.

THURSDAY: It has been a fantastic 12 months for Man Group shareholders. The world's largest quoted hedge fund manager has seen its stock rise more than 88 per cent since last November, but investors will be asking if it is set to continue. The shares stand at an all-time high, buoyed by the consistent inflow of funds, strong global equity markets and innovative product launches. Reports suggest Man is looking at demerging its brokerage arm, Man Financial, a move that could generate up to $5bn (£2.6bn). Pre-tax profit for the first half is expected to beat the $691m consensus forecast.

The private equity group 3i has already warned the market proceeds from disposals will be sharply lower in comparison to the first half of last year. It is in the process of completing its largest ever single transaction, the £2.25bn acquisition of the water group AWG, as part of a consortium including Canadian and Australian pension funds. However, despite lower sales proceeds, 3i should report a strong first half as funds continue to pour into private equity. Dresdner Kleinwort is forecasting £825m of disposals for the full year.

Results: Full year - Formation Group; Punch Taverns. First half - 3i; BT; Dairy Crest; International Power; Invensys; Man; SABMiller; Wincanton. Third quarter - Royal & Sun Alliance.

FRIDAY: Results: First half - BBI Holdings; Hornby.

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