The Week Ahead: Capita investors hope for fresh contract wins

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The Independent Online

The City begins winding down for Christmas this week, with very few companies reporting, and share trading activity likely to be well below normal levels.

Although there are a handful of trading statements scheduled for the early part of the week, it is worth keeping an eye on the stock market news alerts, for companies which schedule their AGM or even an EGM in the last few days before Christmas. Last year, Dyson, the chemicals group, held its AGM on one of the last days before Christmas in an attempt to pass through a controversial new share option scheme for its management. With much of the City already away on their holidays, the company had no problem getting the motion voted through.

Among the scheduled announcements this week, the only FTSE 100 company to report is Capita, the support services group whose diverse activities include collecting the TV licence fee, running London's congestion charge and paying teachers' pensions. Although Capita has largely met investors' expectations so far this year, there is currently a slight shortfall in pipeline business when set against the company's profits targets for next year. News of some new contract wins would be a welcome boost.

The other area in which investors will look for an update is the group's share buyback scheme. It has helped to push the share price up over the past few months, but is the company going to continue with it?

TODAY: The only company scheduled and confirmed to be reporting to the City today is Wood Group, which provides services to the oil and gas industries.

The company reported an impressive 29 per cent rise in first half profits when it published its results in September, and conditions have remained favourable in the energy sector since.

Having sold its production technology business just last week and raised around £50m in a share placing this summer, the company now has a decent-sized acquisition war chest. Investors will be keen to hear how the search is going, and what sort of businesses Wood is looking at.

TOMORROW: First Technology, which makes crash-test dummies and gas sensing equipment, reports its interim results today. However, investors will be much more interested to hear more news on the company's bid situation.

Last week, its shares shot up 14 per cent when it revealed that it had been approached by a mystery bidder, reported at the weekend to be the US giant Honeywell. The company's first half profit figure will also be worth watching out for. After a rough few months, First warned the market in August that its profits were set to be 20 per cent below expectations and that it had recently breached its banking covenants. With a successful takeover by no means a certainty, investors will want some reassurance that the company's trading position and finances are now stable.

Tomorrow will also see the publication of the latest RICS housing survey, providing an update on the current state of the UK residential property market. The survey has shown a steady moderation in house price falls in recent months, and more of the same is expected tomorrow. Hanson, the building materials company, also provides an indication of the housing market's performance, when it updates the City on its recent trading.

Finally, after a profits warning in September, investors will be hoping that Misys, the financial services technology group, provides some reassurance that it is back on track.

WEDNESDAY: The publication of the minutes from the Bank of England's last Monetary Policy Committee meeting will be the focus of attention on Wednesday. Rates were once again left on hold this month, and the committee is expected to have voted 9-0 in favour of maintaining the status quo. Their comments may provide some hints as to the next move, however. The CBI also publishes its distributive trends survey today, providing an insight into conditions on the high street during the crucial run-up to Christmas.

THURSDAY: House builder Wilson Bowden will provide its own take on the state of the UK housing market on Thursday, while the IT company Total Systems is the only other group scheduled to report.

FRIDAY: The London Stock Exchange and the Liffe market close at 12.30pm on Friday, and you can expect a very quiet morning beforehand. The rest of the world's stock markets are operating full working days, however.

Third quarter growth figures and a balance of payments update are also due. Annual GDP growth is expected to remain unrevised for the quarter at 1.7 per cent. The current account deficit is expected to have widened in the third quarter, due to the fall in North Sea oil output.

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