The Week Ahead: Hanson looks to demonstrate material growth

Click to follow
The Independent Online

The last week of trading before the Christmas break looks like being a quiet one for company results - only six UK-listed companies are due to report numbers.

However, investors will be on the lookout for a pre-close full year trading update from the building materials group Hanson, due tomorrow. The shares are trading close to an all-time high, but there is some concern the slowdown in the US housing market and the weak dollar could spell bad news for the company.

Hanson generates just over half of its group profits from the US, but in fact has greater exposure to infrastructure spending than the retail housing market. US government expenditure should more than compensate for a slowdown in the housing market.

One of the reasons that the share price is strong is that takeover rumours have been doing the rounds all year. Cemex, the Mexican cement giant, is in the process of bidding for its Australian rival Rinker Group, but the word is, if that deal fails to come off, it will turn its attention to Hanson. Hanson's asset base is particularly attractive given how hard it is to gain planning permission for new quarries - it has 67 years worth of reserves in the UK and 82 years worth in the US.

Consensus forecasts are looking for full-year pre-tax profits of £464m, up from £429m in 2005, and investors will be hoping to hear that the company is confident of hitting that number.

TODAY: Anyone who has taken a punt on Coe Group in the past six months, and if the share price is anything to go by then plenty have, will have every right to a few nerves ahead of today's results. Shares in the closed-circuit television and surveillance group have risen more than fourfold since mid-August to close at 47p on Friday. Even a statement in late September, in which the company said it knew of no reason for the rise in the share price, did nothing to stop investors buying. The company ought to be doing well - there are more closed-circuit televisions in operation in the UK than in the rest of western Europe combined. Broker research on the company is thin on the ground, but the recent tie-up with ISM, a developer of security software, should mean forecasts are more than matched.

Takeover talks at the photo booth operator Photo-Me International ended in November with the company issuing a profit warning, in what seems to be something of a yearly event. However, the shares held up surprisingly well because most investors were sceptical about the prospect of a bid at a significant premium. The possibility of a £100m cash handout for shareholders if the company goes ahead with breaking itself up has also supported the stock.

Results: Full year - Coe; Wichford. First half - Photo-Me International; Total Systems.

TOMORROW: Results: First half - Park Group.

WEDNESDAY: The future of one of arguably Britain's last remaining industrial giants, Corus Group, could be decided at an emergency general meeting that should be a lively affair. The rumour doing the rounds last week was that Tata Steel, the Indian group which is one of Corus's two suitors, could be poised to drop out and concede defeat to the 515p bid from CSN, its Brazilian rival. The CSN bid values Corus at £4.9bn, £900m more than the original Tata offer.

Although there has been no confirmation, George Wimpey is widely thought to be one of three groups in the running to acquire its house-building rival Wilson Bowden. Investors will be hoping to hear confirmation that Wimpey is among the front runners - but HBOS, alongside Sir Tom Hunter, and Barratt Developments, the other two reported bidders, could drive the price significantly higher.

KSK Power Ventur, an Indian developer of private power projects, listed on AIM on 1 November and reports debut interim numbers. The float, priced at 107p per share, was one of the biggest on AIM in the past 12 months, valuing the company at £137.9m. Since then, the shares have performed well, climbing to 139.5p by Friday's close. Since the company only listed in November, forecasts are few and far between for the first half, but investors should look out for a progress report on power plants under construction and an update on fuel licensing developments.

Results - KSK Power Ventur.

THURSDAY: Following swiftly from George Wimpey comes a trading statement from Persimmon, the only house builder in the FTSE 100. Investors are not expecting any nasty surprises after the group confirmed it is trading in line with its own expectations in October. Some traders are hoping itwill enter the Wilson Bowden takeover battle, but at present that looks a long shot.

Results: None due.

FRIDAY: Results: Sirius Exploration.

Comments