The Week Ahead: HMV expected to ring up dismal figures

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The Independent Online

Investors are braced for one of the worst sets of numbers in years from HMV Group on Thursday, confirming dismal analyst forecasts. Initiatives put in place by the retailer to reduce costs, revitalise its core business, and grow revenue, as announced on 13 March, are likely to be too late to improve figures for the last year.

Proposed operational improvements include the rollout of electrical products to 20 stores in March and the launch of "store of the future" trials in the West Midlands and Tunbridge Wells this summer.

Although sales for HMV.co.uk were reported to have grown by 150 per cent over the 16-week period prior to the announcement, its share of the online market is not comparable in size to organisations such as Amazon and iTunes.

While there has been the inevitable rumour mill surrounding a private equity- backed buyout of HMV, most sector observers believe that the traditional music and film retail industry is in terminal decline. Permira's 210p-per-share offer last February seems like an awfully long time ago and there is unlikely to be a large queue of buyers waiting to have a crack at turning the company around. Pre-tax profits of £48m are forecast, less than 50 per cent of last year's figure.

TODAY: There has been no news to suggest the growth strategies proposed by Majestic Wine at the end of 2006 have gone awry. The wine retailer has focused on expanding its portfolio of stores, and although news has been thin on the ground this year investors should expect to see the company report £16m of pre-tax profits on annual revenue of £187m.

Results: Full year - Majestic Wine; Medical Marketing International; Queen's Walk Investment; Renold; UBC Media. First half - Appian Technology; Beale.

TOMORROW: Investors will have particular interest in full-year numbers from Carpetright after the shares leapt more than 30 per cent 10 days ago on news that Lord Harris, the firms's founder and chief executive, is mulling an offer to take the group private. Full-year numbers should give the market a better indication of what value Lord Harris may have in mind. Clearly, any shortfall in the numbers could scupper the deal and send the stock crashing. Analysts are looking for full-year pre-tax profits of £57.4m.

Meanwhile, W S Atkins, the consulting, engineering and architectural group, is expected to announce solid profit figures well ahead of the forecast £78.9m. Cash generation has been strong with net funds expected to be about £185m. This comes despite an exceptional loss of £36m in relation to the Metronet enterprise. The Metronet contract shortfall has been discounted by the market, but investors will hope to see there has been no further deterioration.

Although Ashtead's share price looks to have reached something of a plateau, there has been a raft of corporate activity in the plant hire sector over the past two weeks and investors will be hoping to see more. Consensus analyst forecasts are for approximately £79.1m, which compares favourably with the £67.5m Ashtead reported for the previous year.

Results: Full year - Ashtead; W S Atkins; Carpetright; Datong Electronics; Debt Free Direct; International Greetings; Stonemartin. First half - Chemring; Domino Printing Sciences; Ultra Electronics.

WEDNESDAY: It has been a long while since Stagecoach was in the doldrums and the rail and bus operator has produced consistently solid numbers over the past four years. Wednesday's full-year earnings announcement is unlikely to buck this trend. Pre-tax profits should come in at about £151m, representing a 50 per cent increase on last year's results.

Results: Full year - Park Group; ReNeuron; Stagecoach; Touchstone. First half - London Scottish Bank; Thomas Cook.

THURSDAY: Hogg Robinson, the international business travel agency, reports debut full-year earnings, which are tipped to reflect good progress. The company came to the market in October last year in an initial public offering that was priced well below initial forecasts.

The group, previously owned by the private equity house Permira, has struggled to return a significant profit in recent years. The pre-tax profit, however, is estimated at a healthy £31.6m. The shares are still languishing at less than 100p so any surprises on the upside could see a sharp rally in the share price.

Results: Full year - DS Smith; HMV; Hogg Robinson; Marchpole; Micro Focus International; Xansa. First half - Cobra Bio-Manufacturing.

FRIDAY: The residential and commercial property development giantBerkeley will announce its full-year earnings. Shareholders can expect to celebrate a pre-tax profit increase for the third year running, estimated for 2007 at £174m.

Results: Full year - Berkeley; Continuum Payment Solutions; James Latham.

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