The Week Ahead: HBOS investors will be alert to signs of cracks

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The Independent Online

Banks and tour operators will be top of the City's news agenda this week, with two of the biggest from each sector reporting to the market.

HBOS publishes its first-half trading statement on Tuesday, when investors will be eager to hear whether it has managed to sustain its strong performance in spite of a recent series of interest rate rises. When the company last spoke to the market at the end of April, it told investors that it expected to beat market estimates for the first half of the year. However, rates have risen again since then, and further rises are priced into the market. While HBOS has so far managed to maintain a strong credit book, investors will be watching for signs of any cracks.

Its smaller rival Alliance & Leicester will follow with its own update on Wednesday. While A&L shareholders will be equally keen for assurance that the bank has seen no increase in bad debts, investors will also be watching out for news over the company's future. Credit Agricole came close to making a formal bid last year, after lengthy talks with the bank, but eventually pulled away. Could 2007 see a firmer approach?

TODAY: Workspace, which provides business premises for small and medium-sized companies in London, reports its full-year results. Investors will be keen to see how the company has fared since converting to a real estate investment trust (Reit) at the start of the year, and will be looking for reassurance that occupancy rates have stabilised after a fall during the first half of the financial year.

Rival property group Capital & Regional, which has been one of the few to rule out conversion to a Reit, is expected to update the market at its AGM.

Results: Full year: Workspace; AGM: Capital & Regional

TOMORROW: The waste management group Biffa warned in April that its full-year profits were set to come in lower than expectations, so investors will be hoping for no more bad surprises when the group announces preliminary results. The company blamed the turn in its fortunes on an increase in competition from its local rivals, preventing it from pushing through price increases to small businesses. However, the group remained upbeat about growth prospects. Analysts are now looking for profits of £71.7m, which would be a 9.4 per cent rise on last year.

The troubled support services group Jarvis will report full-year results. After a difficult second half, shareholders will be seeking reassurance that the level of contract wins will pick up over the year ahead. Jarvis is one of six firms competing for a track renewal contract from Network Rail, and will soon find out whether it has made it to the last four.

Results: Full year: Biffa, Jarvis; Trading update: HBOS; AGM: Premier Farnell, Pipex Communications, Ted Baker.

WEDNESDAY: The magazine publisher Future - the name behind titles such as Total Film and Cycling Plus - has been in recovery mode over the past six months after a shocking 2006, which saw it issue three profit warnings and slash its dividend. When the company last spoke to the market in March, it reassured investors that it was trading in line, and with its restructuring plan well under way, shareholders will be looking for news of further progress when it publishes its interims. Strong sales of games consoles are expected to have benefited the company, which publishes a number of specialist gaming titles.

Results: Trading update: Alliance & Leicester, Rensburg Sheppards; Interims: Future; AGM: Tomkins, Antofagasta.

THURSDAY: All eyes will be on the tour operator First Choice as it publishes interim results. However, shareholders will be less interested in the detail of its past performance, and much more keen to get an indication of how great the cost savings will be once it merges with its German rival TUI. Having received clearance from competition authorities last week, the deal looks unstoppable. The enlarged group will have a market capitalisation of around £12bn and will be listed on the London market. The deal is expected to complete in October, subject to shareholder approval.

Mothercare will be looking for the green light from its shareholders as it seeks approval for its acquisition of the group that owns Early Learning Centre shops. With most analysts agreeing that it is a great deal for the retailer, the vote is expected to be a formality.

Results: Interims: First Choice Holidays; Trading update: Hays; AGM: Trafficmaster; EGM: Mothercare

FRIDAY: Another major UK tour operator, MyTravel, is releasing its interims. Like its rival First Choice, it is in the middle of a merger with a German company - in this case, Thomas Cook.

Results: Full year: William Ransom & Son; Interims: MyTravel; EGM: International Power.

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