The Week Ahead: Is British Energy in a good state of repair?

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The Independent Online

There are going to be plenty of nervous shareholders before tomorrow's third-quarter numbers from British Energy, the struggling nuclear energy group. The shares have tumbled towards new lows in recent weeks on speculation that the repair work on cracked pipes at the Hunterston and Hinkley Point power stations has again fallen behind schedule.

However, should the maintenance work be on track the shares will get a significant boost. The broker Collins Stewart believes that good news on the operational front could translate into another 200p on the current share price and that "the balance of probability is moving towards no more bad news".

British Energy forward sells most of its output so the slump in electricity prices should not have a huge impact on numbers. According to Collins Stewart, the company has already sold 55 per cent of 2007/2008 output at £46 per megawatt hour, significantly higher than the current spot price.

Although there are no quarterly estimates available, the numbers are of secondary importance to the repair update.

TODAY: Royalblue is one of the few survivors of the dotcom boom and bust that is trading stronger than ever. Although the share price has not fully recovered to its 2000 peak, the company stands alone in the sector for never having issued a profits warning. Its software is used to execute about 75 per cent of all UK equity trades and the group is looking to expand its products further into the North American and Asian financial markets. Consensus forecasts are for pre-tax profits of £14m, but with strong equity markets in recent months some traders are expecting the company to cruise past that number.

Results: Full year - Heavitree Brewery; Internet Business Group; Royalblue; St Modwen Properties. First half - Albemarle & Bond; McBride. Third quarter - Workspace Group.

TOMORROW: The fund management group Amvescap has struggled to match the market over the past few years and after a grim update from the rival F&C Asset Management two weeks ago, there will be some nervous shareholders before interim numbers. That said, F&C's problems look company-specific and Amvescap has significant exposure to the US market through its Aim Funds brand. The grouphas $469bn (£240bn) of funds under management, so any shortfall in earnings, expected to come in at 31p per share along with £366m in pre-tax profits, will come as a big shock.

British Land, the UK's second largest landlord, appears to be in rude health after its conversion to Real Estate Investment Trust status at the start of the year. Third-quarter numbers should confirm a robust London commercial property market, and a series of high-profile City property transactions, including the £600m sale of the Swiss Re "gherkin" building, should ensure solid net asset value growth and a bullish outlook. The only potential blots on the landscape are rising interest rates and an overvaluation of assets, but anything other than a strong set of numbers would be a major shock.

Results: Full year - Amvescap; Bradford & Bingley. Third quarter - British Land; British Energy.

WEDNESDAY: Results: Full year - ARC International.

THURSDAY: It is a long time since the excitement of the Guinness scandal; so long in fact that Diageo, formed by the merger of Guinness and Grand Metropolitan in 1999, is perhaps the dullest company in the FTSE 100. That will probably not upset shareholders, and there would be a major shock if the company does anything other than report first-half numbers in line with market forecasts.

The world's largest maker of spirits should deliver profit growth of approximately 7 per cent, with progress in the United States and South America, but its geographic spread makes its earnings as solid and predictable as any other major company. Consensus forecasts are for £1.3bn of pre-tax profit.

Pendragon, the UK's largest car dealer after October's merger with its rival Reg vardy, reports full-year results although there will be some distortion because the merger completed part of the way through the financial year. The group recently completed a sale and leaseback of most of its property assets, raising £258m in the process, so investors will be looking for hints that more acquisitions are in the pipeline.

A pre-close trading statement from publishing giant Reed Elsevier in November confirmed it is on track to make its full-year forecasts. Its shares have been a long-term underperformer, but chief executive Sir Crispin Davies believes the market may have turned the corner. Consensus forecasts are for pre-tax profits of £979m.

Results: Full year - Pendragon; Reed Elsevier; Tomkins. First half - Diageo.

FRIDAY: Results: First half - Go-Ahead Group.

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