The Week Ahead: S&N ale and hearty despite a dip in sales across the Channel

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The Independent Online

Scottish & Newcastle, home to brands such as Kronenbourg 1664 and Newcastle Brown Ale, is among a host of big corporate names presenting interim results this week as the reporting season bubbles away.

The brewer, which recently reported Britain's supermarket giants to the competition watchdog over their cuts to beer prices, is expected to deliver strong first-half pre-tax profits: a £31m rise to £194m, driven by strong UK beer sales.

Investors will be keeping a close eye on its French business after S&N indicated that branded beer sales in France were down by as much as 7 per cent in the first quarter. However, its joint venture with Carlsberg reported strong sales driven by higher volumes and prices in Russia. S&N, which has been the subject of takeover rumours, may also provide an update on plans to sell a brewery near Nancy in France.

Takeover speculation also continues to hover over ITV, which was the subject of a foiled takeover attempt in March. However, the focus at the media group's interims will be on when chief executive Charles Allen steps down.

Yet another company never far from bid speculation is Standard Chartered, the last of the big UK banks left to present its interim results. Like many of its counterparts, debts are expected to feature prominently. Deutsche Bank is predicting a 76 per cent increase in Standard Chartered's bad debt charge to $588m (£308m), mainly due to problems in Taiwan.

However, Standard Chartered indicated just over a month ago that it had achieved double-digit growth in consumer and wholesale banking after enjoying buoyant conditions across Asia. It may also comment further on its acquisition plans after being linked to various potential targets including Pakistan's sixth-largest lender, Union Bank.

Staying in the financial services, the UK's biggest insurer, Aviva, will present its interim results. The company said last month that sales growth in the first half of the year was up 20 per cent on last year. At the same time, it announced the $2.9bn acquisition of US life insurer AmerUs as part of its strategy to expand into the American market. The group continues to face tough price competition in the UK general and life insurance sectors.

Another multi-faceted financial services company, Old Mutual, will also be reporting. The market is becoming much more comfortable with its Skandia life insurance purchase following an investor briefing in June. Old Mutual's upbeat outlook for Skandia in spite of tough competition prompted some analysts to predict a positive dividend surprise this year. However, the group's South African operation, Redbank, may suffer from the rand's weak performance against sterling.

Another global insurer, Royal & SunAlliance, will be under pressure to impress the market again. It set the bar pretty high in the first quarter, producing a 29 per cent rise in operating profits to £207m. The increase was driven by careful management of the pricing of its products, as well as favourable weather conditions which limited the number of claims.

The key issues for Royal & SunAlliance are investment returns and reducing its exposure to asbestos claims in the US. The insurer may talk more about its recent announcement that it plans to cut 1,550 jobs over the next two years, with around 1,000 of these going in the UK.

Another life insurer and fund manger, Friends Provident, beat market forecasts in the first quarter too, with a 26 per cent rise in life and pension sales. And the market will also be looking for goods news from fund manager Schroders, after it reported a return to growth in its retail fund business in the first quarter. However, its institutional fund business remains a concern.

Winging over to aviation, low-cost airline easyJet is set to deliver impressive growth at this week's trading update, following in Ryanair's footsteps. The company upgraded its guidance last month when it said full-year pre-tax profits would increase by between 40 and 50 per cent this year, compared with previous guidance of 10 to 15 per cent. It has benefited from strong passenger numbers, ticket price rises and some hedging against rising fuel costs.

EasyJet may also comment further on issues such as plans for a new European hub and discussions about starting a franchise with aviation partners in the Middle East. Airports owner BAA is also expected to report strong traffic numbers for July.

From airports to aerospace equipment, with engineering group Smiths providing a full-year trading update ahead of the results. Investors will be looking for signs of a turnaround in its aerospace business, which recently won an engine components contract with Rolls-Royce.

Switching to electricity, International Power is likely to report a strong rise in profits with higher prices in the UK offsetting declines in Australia.


Tomorrow 7

UK RESULTS: (interirm) F&C Asset Management, Flormerics, Morgan Sindall, Pendragon.

Tuesday 8

UK RESULTS: (I) Friends Provident, Scottish & Newcastle, Standard Chartered; (first quarter) Danka Business Systems; (Q2) Rangold Resources; (Q4) NDS.

Wednesday 9


Thursday 10

UK RESULTS: (I) International Power, Orpak Systems, Royal & SunAlliance, Spirent Communications.

Friday 11

UK RESULTS: (I) Crosby Capital, Schroders.