The Week Ahead: Vodafone numbers set to raise pressure on Sarin

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The Independent Online

Some in the City are losing patience and want to see Mr Sarin offload Vodafone's 45 per cent stake in America's Verizon Wireless, thought to be worth £25bn, and return cash to shareholders. They also want the company to extricate itself from its struggling Japanese business.

The latest subscriber numbers are likely to show that competition is hotting up at home, with Vodafone's revenues down from its key Italian and German markets.

TODAY: Today marks the end of an era for O2, Vodafone's biggest UK rival, which publishes its last trading update as an independent company. The group's £17.7bn takeover by Spain's Telefónica is due to complete this month, making today's fiscal third-quarter key-performance indicators largely irrelevant as far as investors are concerned. Nevertheless, analysts will scrutinise the figures for signs of rising churn rates and subscriber acquisition costs, which could bode ill for the rest of the sector.

Goldman Sachs is looking for service revenue growth of 9 per cent in O2's UK operations, 20 per cent in its German subsidiaries and 8 per cent in its Irish division.

Results: Full year - Beale, Research Now. Interims - Daejan Holdings, IG Group, NCC. Trading statements - Barratt Developments, Wolseley, Greene King, O2, Legal & General.

TOMORROW: It falls to WH Smith to wind up the post-Christmas retail reporting frenzy. The books-to-stationery retailer is not expected to dent the sector's buoyant mood after a better-than-feared festive period.

Although analysts believe the group's underlying sales will have slipped by 2 per cent over Christmas, this would be no worse than it fared during the autumn.

As ever, its travel retail outlets at train stations and airports will compensate for its high-street estate, with a 3 per cent like-for-like sales increase predicted at the former, against a 4 per cent fall at the core high street chain.

More important to the recovery plans of Kate Swann, its chief executive, gross margins are tipped to rise by 200 basis points.

In the face of intense competition from supermarkets on the one hand and specialists on the other, she is focusing on boosting margins and cutting costs to compensate for a lack of top-line growth.

Results: Full year - London Scottish Bank, Porvair, Domino Printing. Interims - none. Trading statements - WH Smith, Vodafone.

WEDNESDAY: All eyes will fall on Legal & General's new chief executive, who is due to unveil his first set of trading figures at the helm of the general insurer.

Tim Breedon, who succeeded his former boss Sir David Prosser at the start of the year, will be pressed to reveal his strategic plans. Some analysts believe that the ex-head of L&G's investment management arm may seek to address concerns that the group's focus on capital-intensive products such as annuities may weigh on its ability to maintain its dividend in the future.

Barclays predicts robust sales, particularly from bulk annuity purchases.

L&G may be the country's market leader in life protection, but increased competition and the subdued residential housing market mean the broker is more cautious about these products at the moment. Also on Wednesday, Northern Rock will kick off the banking reporting season with characteristically strong results. Any sign that its net interest margin has stopped weakening would be welcomed.

Like L&G, Northern Rock will face scrutiny over its exposure to the payment protection insurance market, which is being investigated by the Office of Fair Trading.

Results: Full year - Northern Rock, Crest Nicholson, Media Square. Interims - Stanley Leisure. Trading statements - Tate & Lyle, Prudential.

THURSDAY: Investors in Misys, one of only a handful of companies to be reporting on Thursday, will be hoping for further reassurances that revenues and margins have stabilised after September's profits warning. A trading statement five weeks ago went some way to putting shareholders' minds at rest, but they will now be hoping for some positive forecasts for the year ahead. An update on plans to spin off its IFA network, Sesame, would also be welcomed.

Results: Full year - None. Interims - Renishaw, Misys. Trading statements - None.

FRIDAY: No major companies reporting.

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