After a week dominated by talk of inflation, interest rates and the global economy, the market returns to the nuts and bolts of making money with a flurry of company results.
The turnaround story at Marks & Spencer is likely to remain intact, with a market consensus for final pre-tax profits of £750m - an increase of more than 20 per cent over 2005. The result's key driver will be better sales and margin performance, helped by a high-profile advertising campaign, better stock management and more fashionable products. With 6.8 per cent growth on a like-for-like basis, M&S's fourth-quarter sales figures outstripped market expectations and represented the third consecutive quarter of improvement.
However, given the stock's stellar performance during the past 18 months, the pressure is on to support the current rating. Analysts at Dresdner Kleinwort Wasserstein are keen to hear management's thoughts on product evolution and the benefits of the store-refurbishment programme. M&S is also facing a potential mushrooming of energy costs, given the recent warning from fellow retailer J Sainsbury on the impact of gas and electricity prices. M&S also has a £750m pension deficit.
Pubs also face a series of challenges, such as the effect of rising energy and labour costs, the smoking ban and acquisition activity. Mitchells & Butlers, having shrugged off a bid from the Robert Tchenguiz consortium R20, has a £500m war chest - and 250 pubs at leisure group Whitbread are the likely target. If Mitchells & Butlers can't spend the money, management has pledged to return it to shareholders. The market is looking for first-half profits of between £85m and £90m.
The World Cup, meanwhile, is looming large for rival Wolverhampton & Dudley after a profitable European Championship in 2004. Nigel Parson, an analyst at Williams de Broë, is predicting £40m interim profits - a 12 per cent hike on last year. Meanwhile, fellow pubs group Punch Taverns is focused on the integration of the Spirit business it bought earlier this year and is expected to post an interim profit of around £120m.
After an aggressive sell-off, Barclays should be boosted by its pre-close trading update. Jason Napier, analyst at Deutsche Bank, believes the news will be good, with growth in the bank's capital markets and offshore divisions more than offsetting a subdued UK retail operation.
"Capital market conditions are now extraordinarily strong," he said. "We're expecting market forecasts for earnings growth within BarCap and BGI to rise following this update."
With GUS set to spin off credit- checking agency Experian, few surprises are expected from the retailer's full-year results. Simon Proctor, at Charles Stanley Securities, is forecasting a top-end pre-tax number of £832m for the owner of Argos - a big step down from last year largely due to the sale by GUS of its Burberry stake. While Experian powers on, buoyed by acquisitions and solid organic growth, a profit decline at Argos will be exacerbated by the struggling Homebase chain.
Back to Burberry and chief executive Angela Ahrendts faces the market for the first time this week, presenting the luxury goods firm's full-year results. The market consensus is for a pre-tax profit of £155m. However, analysts are far more concerned about the purveyor of plaid's 2007 sales momentum, a new retail focus, the progress of its cost-cutting programme and the potential for future buybacks.
The urge to demerge is also evident at Cable & Wireless. The decision in March to create separate boards for the UK and international businesses is widely regarded as the first tentative step towards a break-up. But with plans for a £220m senior executive bonus pool, a major business restructuring and a depressed share price, C&W is a telecoms company under pressure. Investors are lining up to grill management at the group's full-year results later this week.
The London Stock Exchange is another stock where full-year numbers will take a back seat, with Nasdaq holding a powerful 25.1 per cent stake and many major shareholders such as Threadneedle having already sold out. Michael Long, analyst at Keefe, Bruyette & Woods, is predicting a pre-exceptional profit of £130m - a 41 per cent increase on last year.
Plenty of questions await the media stocks reporting this week. "The UK ad market, with the exception of the internet, is pretty dire at the moment," said Leigh Webb, an analyst at Panmure Gordon. " Is anyone outperforming and going against the grain?" Emap, GCAP, Chrysalis and Daily Mail & General Trust all have results out.
UK RESULTS: (final) Homeserve, Mitie; (interim) Cambridge Antibody Technology, Care UK, Chrysalis, ITE, Punch Taverns, Treatt, Windsor
UK RESULTS: (F) British Land, British Post; Cranswick, Emap, EMI, Endace, Kingston Communications, Marks & Spencer, RDF Media, SSL International, Telford Homes, Viridian, Yell, Zirax; (I) Cardpoint, GET, Innovation, Paragon
UK RESULTS: (F) Dairy Crest, De La Rue, GCAP Media, Great Portland Estates, GUS, Imagination Technologies, Kelda, Land of Leather, Mothercare, Scottish Power; (I) Sarantel
UK RESULTS: (F) Alterian, Bristol Water, Burberry, Cable & Wireless, PayPoint, QXL Ricardo, Reflec, Sondex, Sutton Harbour, Tate & Lyle, Telent, Zytronic; (I) Arla Foods UK, Daily Mail & General Trust, I-mate, Intec Telecom Systems, Jelf, Mitchells & Butlers; (3Q) Sportingbet
UK RESULTS: (I) Ferraris, Nord Anglia Education, Wolverhampton & Dudley Breweries, Young & Co's BreweryReuse content