The Week Ahead: Whitbread to unveil plans for sales cash

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The Independent Online

Alan Parker of Whitbread will unveil his vision for the leisure giant's future this week, but don't expect him to spring any surprises.

Alan Parker of Whitbread will unveil his vision for the leisure giant's future this week, but don't expect him to spring any surprises.

The new chief executive's strategic review is set to accompany interim results from the group on Thursday. "The recent share price rise suggests that the City has anticipated much of the content", says NigelParson, at Williams de Broë.

He believes that Mr Parker will indicate that the auction of the Courtyard hotels business is at the final stage and is likely to raise up to £80m. Meanwhile, the likely float of Britvic, the soft drinks firm in which Whitbread has a stake, would raise another £150m to £200m, as would the likely sale and leaseback of a tranche of Marriott hotels.

The question is: what does Mr Parker intend to do with all this cash? The betting is on a return of the money to shareholders. As for the first-half financials, a healthy jump in profits is expected from Whitbread. Analysts predict a rise to £144m from £134m.

TODAY: Results: Full year - None. Interims - Alterian.

TOMORROW: These are good times for oil companies and BP's third-quarter results will reflect this. Net income is tipped to soar to $4.2bn from $2.6bn and there is scope for upgrades by analysts to the group's full-year forecasts. So far this year, BP has returned $5.5bn of cash to shareholders via its share buyback programme. Given the strength of the oil price, the group is tipped to have returned up to $8bn by the end of the year.

Last week Taylor Woodrow complained that the UK housing market was slowing and that this would impact its sales. So when it posts its first-half figures all eyes will be on the housebuilder's outlook statement. Pre-tax profits are expected to rise to £57m for the period, from £51.1m.

There has been nervousness among investors ahead of interim results from Hitachi Capital. Shore Capital was last week heard warning its clients that the group's business finance division may struggle to achieve the recovery that is widely expected. One problem may be that Hitachi's retail finance unit is very reliant on DFS Furniture, which has had a tough time over the past six months.

Results: Full year - Regent Inns; Armour Group. Interims - BP; Hitachi Capital; Surfcontrol; TTP Communications; Westbury; BAT.

WEDNESDAY: After two successive quarters of disappointing sales figures, few in the Square Mile are expecting Unilever's third-quarter numbers to show improvement. Gerrard believes the market is expecting the worst. Given this state of affairs, the broker suggests that if Unilever delivers underlying sales growth of above 1 per cent it is almost certain to be taken positively by investors.

Unilever has blamed its troubles on poor weather conditions which, its says, have caused sluggish sales of its ice creams and Lipton iced tea. Comprehensive research from Goldman Sachs last week was far from upbeat about Unilever's future. It warned that the environment in which the food group operates was becoming increasingly tough and predicted that the company was at the beginning of a significant increase in its marketing costs as it fights to defend market share.

Results: Full year - None. Interims - Unilever; Celsis International; Blueheath Holdings.

THURSDAY: Like BP, the Anglo-Dutch oil giant Shell is also benefiting from the buoyant crude price. Clean net income for its third quarter should have soared by 50 per cent to $4.3bn. Not all are so fortunate. One company suffering from the high oil price is ICI. Third-quarter figures will show its profit margins are under pressure because of rising raw material costs. This is the story across much of the chemicals sector, but ICI is tipped to post a modest rise in pre-tax profits, probably to about £110m from £98m last time.

The third quarter will be the last in which GlaxoSmithKline will deliver negative earnings growth for some time to come. Pre-tax profits will have fallen to about £1.4bn from £1.7bn last time but analysts expect the company will be focused firmly on the future and a return to earnings growth from Q4 onwards. Despite fears of competition for GSK's Advair product, sales of the asthma treatment are forecast to have grown by at least 13 per cent.

Legal costs relating to the market timing scandal and the expense of closing its Denver-based Invesco operations are expected to have cost Amvescap about £80m. As a result, the fund manager's third-quarter figures will not make pleasant reading for shareholders. Gerrard forecasts Amvescap to slump to a £10m loss for the third quarter, compared with a profit of £77m a year earlier.

Results: Full year - Formation Group. Interims - Whitbread; Shell; ICI; GlaxoSmithKline; Chloride; Boots; Blacks Leisure; Amvescap.

FRIDAY: Results: None expected.

Economics Diary

TODAY: US: Existing home sales (Sep)

TOMORROW: UK: CBI Quarterly Industrial Trends Survey (Oct); EU: Autumn economic forecasts; Current account (Aug). US: Consumer confidence (Oct)

WEDNESDAY: UK: BBA mortgage approvals (Sep); US: Durable goods orders (Sep); Federal Reserve Beige Book.

THURSDAY: UK: Consumer confidence (Oct); Annual survey of hours & earnings. Eurozone: M3 money supply (Sep). US: Weekly jobless claims

FRIDAY: UK: Consumer credit/Mortgage lending (Sep). Eurozone: Inflation (Oct); Consumer/business sentiment (Oct). US: GDP (1st estimate) Q3; Michigan consumer sentiment index (Oct); Chicago PMI (Oct)

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