The Week Ahead: Tate & Lyle enjoys the sweet taste of success

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These are sweet times for Tate & Lyle. Shares in the sugar group have soared by 80 per cent over the past year and the company is tipped to unveil a solid rise in annual profits on Thursday.

These are sweet times for Tate & Lyle. Shares in the sugar group have soared by 80 per cent over the past year and the company is tipped to unveil a solid rise in annual profits on Thursday.

Analysts predict T&L will deliver a 6 per cent increase in profits before tax and exceptional items to £241m, driven by strong sales of its zero-calorie sweetener Splenda.

The product is the big hope for T&L's future growth as concerns grow about obesity in the developed world. Both Coca-Cola and PepsiCo launched Splenda-based diet versions of their soft drinks last year. Williams de Bröe is particularly excited about Splenda's future and is convinced that it will generate considerable earnings growth for the company in the years ahead.

For now, the biggest problem T&L is likely to face is keeping up with demand for Splenda.

With regard to T&L's traditional business, there is the issue of reform of the European Union's sugar regime. An announcement is due next month and most analysts expect it to herald lower prices within the bloc.

TODAY: The discount retailer Peacock is expected to unveil a modest rise in full-year profits (probably of about 3 per cent) but of greater interest to the City than its bottom line will be the performance of the group's Bonmarche chain. It prompted downgrades to Peacock forecasts in January. Investec Securities believes it is too early to expect evidence of a turnaround at the chain given product changes are due to gain critical mass only in the autumn. However, the broker hopes that new store designs will have at least stabilised the unit's sales performance.

The Fragrance Shop, which was recently acquired by Peacock, is forecast to have registered an 80 per cent rise in total sales during the fourth quarter.

Results: Full year - Domestic & General; Peacock Group. Interims - None.

TOMORROW: The past 12 months been tough for Northern Foods. In fact, not so long ago, the company itself complained of "extremely competitive" trading conditions as weak chilled food sales over Christmas combined with a poor performance by its biggest customer, Marks & Spencer.

Hence, few will be surprised when Northern Foods posts a drop in full-year profits. Most in the Square Mile expect a fall of 7 per cent to £80m. To deal with this, the group has been busy cutting costs. Northern Foods is in the process of closing two plants and eliminating 30 senior management positions.

Results: Full year - Eckoh Technologies; GB Group; Northern Foods; Printing.com; Speedy Hire; Umeco.

THURSDAY: Expro International has been adversely affected by the weak dollar. Regardless, Williams de Bröe expects the oil services group to achieve earnings-per-share growth of 31 per cent. It predicts that Expro will maintain its dividend but points out that this will be paid for by an increase in borrowing. The company aims to grow in the coming years via an expansion into emerging markets such as Russia and West Africa. But, according to Williams de Bröe, it continues to win contracts in traditional areas such as the UK's North Sea.

United Utilities shares have the highest yield in the water sector and there is nothing to put into question the group's ability to pay dividends. At its last trading statement, UU said it was on track to deliver results in line with expectations and reaffirmed its policy of maintaining its dividend in real terms for the next five years. United Utilities' full-year pre-tax profits will rise to about £400m from £349m last time around. Its fellow water group AWG is also unlikely to disappoint the market with its full-year results. Anglian Water should be coping well with its new price regime and analysts hope the group has gone some way to sorting out the problems at its Morrison infrastructure services business. Pre-tax profits at AWG will rise to £80m from £77m last time around.

Results: Full year - AWG; Expro International; Helical Bar; Johnson Matthey; Scapa Group; Shanks; Tate & Lyle; United Utilities; Volex. Interims - Sportingbet; Premier Farnell.

FRIDAY: The model railways and Scalextric maker Hornby has seen its shares lose ground during the past quarter. This has been due to growing anxiety about retail spending and a profit warning from fellow hobbyists Games Workshop. Altium Capital takes the view that the setback at Games Workshop is the result of company-specific problems and that investors should not fret too much about the impact on Hornby. The broker forecasts Hornby to unveil an annual pre-tax profit of £7.6m, up from £6.5m a year earlier.

Results: Full year -Hornby; Oxford Instruments; Park Group. Interims - None.

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