The Week Ahead: Cadbury to tickle taste buds as City feasts on big-name results

Click to follow
The Independent Online

As Wall Street downs tools tomorrow to celebrate another public holiday, this time President's Day, Monday will be rather more hectic for the UK markets as a busy week begins, with a raft of companies announcing results.

As Wall Street downs tools tomorrow to celebrate another public holiday, this time President's Day, Monday will be rather more hectic for the UK markets as a busy week begins, with a raft of companies announcing results.

The calendar is full of big City names. Those with results due include Cadbury Schweppes, Scottish & Newcastle, Hilton, Anglo American, BAE Systems, Centrica and WPP, to name but a few.

Starting with the consumer giants, and analysts are quietly hoping for some good news from Cadbury. The drinks and sweets group has not had the best of times recently, particularly in the US where healthier diets have eaten into sales. The final numbers are likely to be towards the low end of estimates. But Cadbury announced in December that it had enjoyed a strong second half, which is significant as 60 per cent of total revenues are generated during these six months. Pre-tax profits are expected to have nudged up from £922m to £930m.

From sweets to booze, and Scottish & Newcastle is looking to show a healthy rise in profits, from £380m to £471m, and in the dividend. Investors will want to hear about where future growth is coming from, primarily in the rapidly expanding Russian market and through increased product development and marketing in the UK.

Still on the sin stocks, results at Hilton, the owner of Ladbrokes, are expected to have benefited from the recovery in the hotel sector and the public's seemingly insatiable appetite for gambling on fixed-odds betting terminals. However, a number of unfavourable sporting wins could depress Ladbrokes' overall performance. Investors will also be looking for news on forthcoming sale and leaseback programmes.

At bingo operator and Hard Rock Café owner Rank, profits are likely to fall as the weak dollar and its unprofitable film production unit, Deluxe, take their toll. The latter will be a key issue, with the company due to announce details on how and when it will offload Deluxe.

Moving to more traditional industries, and Royal Bank of Scotland, Bradford & Bingley and Alliance & Leicester will ensure a busy week for banking analysts. Most are hoping RBS will steal the limelight by showing how plans to broaden the revenue base will eventually enable it to deliver earnings ahead of its peers. In the short term, the weak dollar will be an issue and domestic competition remains tough, though final pre-tax profits are still expected to have climbed from £7.15bn to £7.86bn.

Elsewhere, and it is understood that aerospace and defence group BAE Systems will quash market rumours by announcing it has no plans to sell its 20 per cent stake in Airbus. Otherwise, few surprises are expected at the final numbers following its trading update late last year.

For media investors, WPP and United Business Media are this week's offerings. The advertising giant, led by Sir Martin Sorrell, could see its forecasts upgraded if the positive sales trend seen in the third quarter continued into the fourth. New business wins are thought to be strong, and margins are said to be in line with the year-end target of 13.8 per cent. However, Sir Martin continues to tread a cautious path, and is likely to reaffirm his belief that industry growth rates will slow this year.

Other companies to look out for include Capita, which operates the London Congestion Charge, and Rentokil Initial. Capita has a strong track record for growth, and pre-tax profits are likely to rise from £121m to £150m. However, some analysts are doubtful this can be maintained in the long term.

Services group Rentokil Initial is one of the City's favoured break-up rumours, while earlier this month there was some actual news when Doug Flynn was named chief executive. The move was welcomed by the City but the group still has much to do to shore up its trading performance. Pre-tax profits are expected to slide 16 per cent to £345m.

As for overseas results, in keeping with the laid-back start to the week, there is little of interest Stateside, although retail giant Gap is reporting. Mainland Europe is busier, with news from Peugeot, Carlsberg and Heineken, Cap Gemini and London Stock Exchange suitor Deutsche Börse.

CALENDAR

Tomorrow 21

UK: Results: (final) 4imprint, Millennium & Copthorne, Ultra Electronics Holdings, WH Ireland; (interim) Ricardo.

Tuesday 22

UK: Results: (F) Bradford & Bingley, CRC, Electric Word, George Wimpey Goals Soccer Centres, Media Square, Morgan Crucible Co, Morgan Sindall, Tomkins, Wolfson Microelectronics; (I) Teesland, Thorntons; (Q2) Sportingbet.

Wednesday 23

UK: Results: (F) Anglo American, BBA, Cadbury Schweppes, Croda International, Domnick Hunter, Egg, Michael Page International, Microgen, Scottish & Newcastle, TDG, Urbium; (I) Brambles Industries, Compel, Dickinson Legg, Morse, Surface Transforms; (Q3) Workspace; (Q4) Plusnet.

Thursday 24

UK: Results: (F) Access Intelligence, Alliance UniChem, BAE Systems, Capita, Centrica, Colt Telecom, Davis Service, Easynet, GKN, Hanson, Hilton, Legal & General, MFI Furniture, National Express, Rentokil International, Royal Bank of Scotland, Spirent, Titan Europe; (I) Galliford Try, Isotron, Wilmington.

Friday 25

UK: Results: (F) Alliance & Leicester, St James's Place Capital, United Business Media, WPP.

Comments