The Week Ahead: City fears combined chemists will be too big for their Boots

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The Independent Online

Top of the agenda is whether the pharmacist and retail chain has managed to stem the loss of sales to the big supermarkets, and whether a programme of cost-cutting has affected the bottom line. Most analysts expect Boots to be well down on last year's figures and predict the full-year turnover could be down by as much as £80m.

But attention is mainly on the merger with Alliance, which if passed by competition authorities, would see a company created with more than 2,200 stores across the UK, a fact that has not impressed the City. "We think they have too many stores ... and they are going to get more, but that's life," said one analyst.

Boots has been busy on other fronts, too, after selling its over-the-counter medicine business to Reckitt Benckiser, which itself will post third-quarter results.

While Reckitt, the maker of brands such as Dettol and Cillit Bang, will be busy integrating the new acquisition, bought for £1.9bn, investors will also be keen to see if it is on the way to fulfilling its profits forecast, which was raised significantly in July. Reckitt remains popular among analysts, the majority of whom rate the company as a buy. "It would appear to be bucking the slowdown in the European consumer sector and, as a result, warrants its premium rating," said analysts at Williams de Broë.

Drugs manufacturers also feature heavily this week as GlaxoSmithKline and AstraZeneca reveal their third-quarter performance. A good showing is expected from GSK, boosted by the current bird flu scares, although AstraZeneca is not expected to do as well as it did in the second quarter.

Still in the medical world, Smith & Nephew will post third- quarter figures. Shares in the company suffered their biggest fall in a year last month when it cut its full-year revenue forecasts, saying it had been hurt by Hurricane Katrina and new products from competitors.

Despite the hurricanes, undiminished confidence remains in the oil sector, where BP and Shell will this week publish third- quarter figures. The energy giants are forecast to be slightly less profitable than in the previous quarter but analysts still expect strong growth and high cash returns over the year.

Early this week around half a dozen companies will submit indicative offers for Onetel, the telecoms company being sold by utility group Centrica. At least one financial buyer, as well as trade buyers including Carphone Warehouse, are among those thought to be bidding, but none is expected to meet Centrica advisers' valuation of £350m.

If profits are going to be a concern this week it will be at the internet bank Egg, which will post third-quarter figures amid concern that they might show a repeat of the second quarter, when profits fell significantly. Bad debt provision brought the numbers down, though chief executive Paul Gratton said at the time that he could see no "meltdown" among consumers.

There's a little more confidence in Whitbread, the restaurant and hotel operator. All eyes will be on the progress of its Premier Travel Inn business, since the acquisition of Premier Lodge, and the David Lloyd health clubs.

Analysts expect excellent results from Travel Inn, now that this acquisition has been integrated, but the David Lloyd centres are viewed as a "difficult" concept and expansion into Europe seen as risky.

There'll be more sporting interest in tomorrow's deadline for the Premier League to give assurances to the EU that it can bundle up top matches more fairly among broadcasters. Competition regulators want to ensure no single broadcaster can dominate access to the best teams.

Away from sport, City interest will also be focused on cigarette maker British American Tobacco, where a good performance is expected from third-quarter results underpinned by strong trading. The figures will be buoyed by promising results in Canada, though these were recently overshadowed by the country's Supreme Court decision to allow British Columbia to sue cigarette makers for the money it spends on treating sick smokers.

In the US, analysts will be keenly watching the first quarter results from Microsoft. Decent growth is expected from the computer giant, in marked contrast to its efforts in court of late. Earlier this month the world's biggest software maker agreed to pay RealNetworks $761m (£430m) to settle a lawsuit over the bundling of Microsoft software. In another disappointment, Microsoft failed in a legal effort to stop one of its former leading software developers from starting work for Google. The search engine then added insult to injury by agreeing a deal with Sun Microsystems to promote each other's products in a bid to challenge Microsoft's dominance.


Tomorrow 24

UK RESULTS: (final) Egdon Resources, Scott Tod; (interim) Alterian, Hitachi Capital; (2Q) Alterian

Tuesday 25

UK RESULTS: (F) NBA Quantum; (I) Boots, Westbury, Whitbread; (3Q) Reckitt Benckiser, BP

Wednesday 26

UK RESULTS: (F) Cambrian Mining; (I) Bristol & West, European Motor Holdings; (3Q) BAT, Egg, Autonomy Corp

Thursday 27

UK RESULTS: (F) Interregnum; (I) Blacks Leisure, Maelor, Maiden Group; (3Q) Amvescap, AstraZeneca, GlaxoSmithKline, Royal Dutch Shell, Smith & Nephew

Friday 28

UK RESULTS: (I) Anglo Asian Mining, LHM