The Week Ahead: Investors have high hopes for GUS spin-offs

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The Independent Online

Former shareholders of GUS should be in an optimistic mood ahead of tomorrow's first half results from Home Retail Group and Experian, six weeks after the groups listed as separate entities.

Experian, a consumer credit rating agency, has enjoyed a strong start to life on its own. Demand from institutional investors has driven the shares 8 per cent higher than the original listing price of 560p. Home Retail, which comprises the general retailer Argos and the do-it-yourself chain Homebase, has not done quite so well, in line with the rest of the retail sector, but the shares are still trading at a slight premium to the placing price.

Both companies have been subject to a handful of takeover rumours - the US buyout giants Kohlberg Kravis Roberts and Blackstone were the latest to be linked to Argos in weekend reports - and Experian is high on the list of favourites to get a private equity bid sooner rather than later.

Given that both companies are new to the market, forecasts are few and far between and no analyst has a pre-tax profit number pencilled in for Experian. However, the company is expected to report sales of $1.6bn for the period. Analysts have a bit more to go on with Home Retail, and consensus forecasts are for pre-tax profits of £108m to £113m.

TODAY: Investors are expecting good results from Cranswick, the food company that specialises in posh sausages. It reported a record first quarter back in July and the barbecue-inducing Indian summer should have been a bonus. The acquisition of the pre-packed cooked meats group Delico earlier this month for £17.9m is unlikely to have any impact on the first half but investors will be hoping to hear positive noises about its impact on full year numbers as Cranswick pushes Delico's state-of-the-art facilities up to full production.

Long-suffering shareholders of the telecommunications group Thus have had something to smile about over the last couple of months. Shares in the company, spun out of ScottishPower at the height of the dot.com boom, have rallied more than 40 per cent since the beginning of August thanks to a contract with HSBC and a broadband supply deal with schools, libraries and council offices across southern Scotland. September's trading statement indicated that the company is expecting to report a 55 per cent increase in first half revenues to £255m.

Results: Full year - Care UK; Education Development; Fountains. First half - Cranswick; Debt Free Direct; Detica; Hamworthy; ILX Group; Supporta; Thus Group; Workspace Group.

TOMORROW: Results last week from Land Securities put the pressure on British Land to deliver strong growth in net asset value and to deliver a bullish outlook on London rentals. Investors hope to hear more on the conversion to Real Estate Investment Trust status, expected in January. However, a rush of mergers and acquisitions in the sector over the last couple of months might mean that some investors are hoping for an indication as to whether or not British Land is looking for bolt-on acquisitions.

Results: Full year - Enodis; Enterprise Inns; Experian; Home Retail Group; ScS Upholstery. First half - British Land; James Cropper; ICAP; Oxford Instruments; Printing.com; SSL International; Uniq. Third quarter - Signet Group.

WEDNESDAY: Seeing as the board of London Merchant Securities has just accepted a £2.25bn bid from Derwent Valley, first half results should be largely academic. The combined group, to be named Derwent London, will become on of London's largest landlords, with 61 per cent of its portfolio in the West End and 23 per cent in the City. Shareholders have been given the choice of taking shares in the new group or 280p in cash, but with the stock closing on Friday at 289.5p there are indications that not all shareholders think that 280p is a fair price.

Results: Full year - Ciref; Paragon Group. First half - 600 Group; Imagination Technologies; Johnson Matthey; London Merchant Securities; Speedy Hire.

THURSDAY: A trading statement in September from the newspaper publishing group Daily Mail & General Trust confirmed that the malaise affecting print advertising is showing little sign of coming to an end. However, some analysts believe that the market is turning and more positive news on DMGT's business-facing and digital advertising has helped to prop up the shares. Investors hope to hear that the analysts are right.

Results: Full year - Arla Foods; Cardpoint; Claimar Care Group; Daily Mail & General Trust. First half - WS Atkins; Big Yellow Group; Clarity Commerce; Domestic & General; Halfords Group; New Avesco; Renold; Victoria. Third quarter - Kesa Electricals.

FRIDAY: Results: First half - Fuller Smith & Turner; Trifast Group.

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