The Week Ahead: Mobile phone firms call numbers in tight market

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The Independent Online

The vicious battle for the mobile phone customer will dominate investor interest this week, with O2, Vodafone and Virgin Mobile giving clues as to how competitive the market has become.

O2 reports its interim results today and is set to announce customer additions of 450,000 in the UK, and the same number in Germany. But the figures will be overshadowed by questions on its proposed takeover by Telefónica.

At Vodafone, which will report interim results tomorrow, sales are expected to have grown 6 per cent to £18bn. Also of key importance will be whether the company will try to grab a bigger share of the 3G market or decide to maintain margins at all costs. Investors will be keeping an eye out for hints of a return of cash to shareholders. A dividend rise and/or a renewed share buy-back policy would be well received by the market, going some way to offset any warnings of a margin decrease in next year.

Virgin Mobile will have to improve on its most recent performance if its statement is to be well received on Thursday. It said in the summer it had signed up only half the new customers in the first quarter of the year compared with the same period last year.

TODAY: Chrysalis, the radio group, is set to announce it has slipped into the red today as it struggles amid a downturn in radio advertising. In September, the company said ad revenues would fall 9 per cent. Shareholders will be looking for any signs of improvement.

In the food sector, Uniq is expected to tell investors its pre-tax profits for the half-year have been wiped out from extra investment in its troubled desserts factory in the UK. The group's UK chilled foods division is set to post a significant loss, and sales growth in Europe is likely to have been sluggish.

Results: Full year - Diploma; Chrysalis. Interims - Latchways; Majestic Wine; O2; PD Ports; Proventec; Uniq. Trading statements - Old Mutual.

TOMORROW: Few expect Burberry to signal its current trading difficulties have eased, but any signs that its spring/summer 2006 order book is fattening up will hearten investors.

Shareholders in Luminar, the nightclubs business, had hoped for a sale of the group's live entertainment division. No sale has materialised, and profits for the half-year are expected to fall 20 per cent on the back of poor performance in the division. Central costs also look set to be higher than hoped.

Results: Interims - Emap; Acambis; Babcock International; Big Yellow Group; Bright Things; Burberry; Business Post; Endace; Kewill Systems; Luminar; Northern Foods; Vodafone; VT Group; William Ransom; Rensburg Sheppards.

WEDNESDAY: J Sainsbury has already given the market a taste for its improving sales thanks to a trading update last month. But profits for the interim period are expected to be relatively flat once rising oil costs and higher energy bills are accounted for. The supermarket chain recently warned it will abandon its multibillion-pound IT programme with Accenture, causing a hit to profits. Analysts will demand more information on the costs of withdrawal and of building new IT systems in-house.

Expect mixed trading results from EMI in its interim statement. Organic revenue growth in its recorded music division has been strong thanks to a string of solid new releases that are outperforming the market, but extra marketing costs are likely to have hit margins.

Results: Full year - Dimension Data; Lonmin; Premier Direct Group; Sanderson Group; Shed Productions. Interims - 600 Group; EMI Group; First Property; Glotel; J Sainsbury; Land Securities; Marchpole Holdings; Touchstone Group; Vectura Group; Wyndeham Press; Scottish & Southern.

THURSDAY: Following Burberry, GUS - the major shareholder in the luxury goods brand - will update the market on its half-year performance. Experian, its credit-checking business, will be the star performer, but the market will be more interested in GUS's retail interests of Argos and Homebase, particularly the latter after a profits warning last week from Travis Perkins, the owner of the Wickes DIY chain.

Hilton, the hotels and Labrokes betting shops group, will report its current trading position, and is expected to have built on its performance since the half-year with a good performance from hotels in Scandinavia and Central Europe. Investors will be hungry for further details of its talks to sell its hotel assets to Hilton Hotels, the US owner of the Hilton brand.

Results: Full year - BOC. Interims - Applied Optical; Chloride Group; GUS; Helical Bar; Investec; Man Group; Mothercare; National Grid; Vedanta Resources; Virgin Mobile. Trading statement - Hilton Group.

FRIDAY: No results are scheduled.