The Week Ahead: Stand well back: investors set for fireworks at Matalan AGM

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The Independent Online

Shareholders in Matalan are braced for an explosive annual meeting on Wednesday after the chairman and founder John Hargreaves confirmed late last week that he was mulling over a takeover approach for the cheap and cheerful retail chain. However, Mr Hargreaves said there was "no certainty" that a bid would actually go ahead after being forced, following a terse board meeting, to update the market on his plans.

Possible takeovers are not the only source of contention. Mr Hargreaves, a major shareholder in the chain, has taken a swipe at the board's dividend policy, saying he is unhappy with the level set by the board for the last financial year and that he will be raising the issue at the meeting. To cap it all, the chain is also in line for shareholder dissent over the golden handcuffs being awarded to the departing chief executive, John King.

Mr King will be paid a retention bonus equivalent to 12 months' remuneration if he stays with the company until the end of 2006, as planned. Corporate governance group RREV criticised the bonus, saying it is "unwarranted", given Mr King is purely serving out his contractual 12-month notice. However, RREV acknowledged that Matalan was facing difficulties and had struggled previously to hang on to its chief executives. It has therefore recommended that shareholders abstain from voting on the matter.

Matalan is not the only retailer to come under fire. Supermarket giant Tesco, which holds its annual meeting on Friday, faces opposition from shareholder group Pirc over its executive incentive schemes. Pirc is unhappy about the performance targets set out in the supermarket group's long-term incentive schemes. Pirc argues that the schemes should include two different performance conditions. Tesco will also update on trading, but few surprises are expected following an announcement on current market conditions in June.

HMV, meanwhile, will unveil its annual results, with the market particularly keen to find out just how bad current trading is. The retailer is expected to have been hit by product launches that were put on hold until after the World Cup is finished. Investors will also be looking for reassurance that its lengthy £63m purchase of Ottakar's book chain is likely to be completed without further delays, and for an update on its store remodelling plans. HMV is expected to produce a pre-exceptional pre-tax profit of £98m, compared to £123.8m last year, with its bookstores, Waterstone's, and its flagship music stores suffering from tough conditions on the high street.

Away from retail, oil giant BP, which has been at the centre of price-fixing allegations in the US, will update the market with its second-quarter figures.

BP faces charges after a US regulatory watchdog filed civil proceedings alleging price manipulation in the TET propane market. Otherwise, analysts appear comfortable with BP's performance and are expecting the first quarter's strong production figures to continue, with net earnings at around $5.5bn (£2.97bn).

British Airways, which is also facing price-fixing allegations, will be producing its monthly update on the number of passengers who travelled on the airline during June, as will easyJet and Ryanair. All sets of traffic figures are expected to be solid.

In economic news, all eyes will be on the Bank of England's Monetary Policy Committee meeting on Wednesday and Thursday to see if the UK will follow the Federal Reserve's lead in raising rates. Most economists do not expect an increase, leaving rates at 4.5 per cent, for this month at least. Housebuilders such as George Wimpey, which presents its trading update on Wednesday, will be watching the MPC's decision closely.

Pub group Greene King will post annual results, outline the progress of its latest offer for rival Hardy & Hanson, and discuss the impact of Scotland's smoking ban. Oriel Securities looks for a pre-tax profit of £119m against £94m last year, driven by acquisitions and solid growth. Hard Rock Café owner Rank, which has just sold the first part of its loss-making Deluxe Media business, will also give a trading update.

To transport, and National Express will be discussing its current trading performance on Monday. Analysts will look for improvement in profit margins and indications that the company may have to raise bus ticket prices to cover fuel costs, as rivals such as Stagecoach has already warned it may have to.

Finally, Premier Foods, makers of Branston Pickle, will provide a trading update on Thursday. Premier will be under pressure to clarify whether it plans to take over the UK and Irish assets of United Biscuits and Campbell Soup, according to Charles Stanley, the stockbrokers.

CALENDAR

Tomorrow 3

UK RESULTS: (final) Waterline

Tuesday 4

UK RESULTS: (F) ASOS, DTZ, La Tasca, Northgate; (interirm) Porvair, Terrace Hill, Alphameric

Wednesday 5

UK RESULTS: (F) Northgate Information Solutions; (I) Rightmove

Thursday 6

UK RESULTS: (F) Cohort, Samuel Heath & Sons, HMV, Medal Entertainment & Media

Friday 7

UK RESULTS: None scheduled

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