The Week Ahead: Wolseley tipped to build on improving outlook

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The Independent Online

Full-year results from Wolseley today and Barratt Developments on Wednesday will put the spotlight back on the strength of the housing market on both sides of the Atlantic.

The construction and building materials supplier Wolseley is particularly exposed to the US, from where it generates 60 per cent of its revenue. A slowdown in the US housing construction market - new housing starts fell 6 per cent in August - could therefore put a dampener on the results.

On the other hand, the group generates about two-thirds of its US revenues from repair and maintenance in the commercial property sector, where business remains strong.

The stockbroker Seymour Pierce also points out an improving outlook in the UK and Europe should benefit the rest of Wolseley's business, particularly as commodity prices ease. Seymour Pierce is forecasting earnings-per-share growth of 14.2 per cent to 93.2p and gives an "outperform" rating on the basis that worries about the US housing market have been overdone.

Investec Securities, meanwhile, rates Barratt as a "buy" due to its strong balance sheet and good cost control. The bank expects a small rise in Barratt's profits before tax, with a forecast of a 1.5 per cent increase to £383m.

TODAY The City bank Close Brothers is expected to unveil results showing strong profits growth. Analysts forecast a 17 per cent rise in pre-tax profits to £154m for the year to the end of July. UBS expects Close's asset management business to be the main driver of growth, where it forecasts a 24 per cent profits increase. Consumer banking is thought to have been slower, with 7.5 per cent growth according to predictions from the Swiss broker. The unknown factor is how stock market volatility in the spring hit its market-making division.

Results: Full year - Aero Inventory, Ceres Power, Close Brothers, Minerva, Wolseley. Interims - Asterand, CodaSciSys, EQ Group, Hardy Oil & Gas, Healthcare Locum, Leisure & Gaming, Peach Holdings, Plethora Solutions, Smallbone, Symphony Plastic.

TOMORROW Computer games retailing is a tough business to be in if the most eagerly anticipated console launch for some years is delayed. Sony's PlayStation 3 was originally supposed to be launched in Europe in November, but this has now been delayed to March.

But while analysts expect this postponement to knock £3.5m off Game Group's full-year profits, its interims should show improving sales. Forecasts are for a pre-tax loss of between £7m and £8.5m, down from £11.6m in the same period last year.

Regent Inns, the bars, pubs and restaurants group, is also struggling to cope with pressures beyond its control. The stockbroker Panmure Gordon expects full-year profits to be in line with expectations, but warns current trading conditions are difficult, due to licensing law reforms, among other matters.

Results: Full year - ICM Computer Group, Regent Inns, Sinclair Pharma; Interims - Aricom, Atlantic General, AG Barr, Corin, Entertainment Rights, Game, Havelock Europa, Informa, JKX Oil & Gas, Plant Health, RC Group, Robotic Technology, Service Power, Vanco, Vastox, Win Plc.

WEDNESDAY Look out for strong performances from Comet in the UK and Darty in France to much-improved first-half results from Kesa Electricals. The retailer, which earlier this year rejected bid approaches, will post pre-tax profits of between £35m and £38m according to a consensus of brokers' forecasts, up from £23.1m during the first half last year.

Meanwhile, Richard Cousins, the new chief executive of Compass, will give the market his first trading update. He is expected to say the world's largest catering group has performed in line with market expectations in recent months, with sales growth slowing from 8 per cent in the first half.

Results: Full year - Barratt Developments, SCI Entertainment, Smiths Group; Interims - China Shoto, D1 Oils, Deal Group Media, Dermasalve Science, House of Fraser, Kesa, Motivcom; Trading update: Compass.

THURSDAY The publication of half-year results by SkyePharma follows a shareholder revolt at the drug manufacturer earlier this year. Investors deposed the management. SkyePharma recently signed up a European partner for its biggest prospect, Flutiform, a drug for asthma. The shares had been hit by concerns about development of the drug, and the new management moved quickly to sign up a US partner in May.

Results: Full year - Lincat, PFI Infrastructure; Interims - @UK Plc, CeNeS Pharmaceuticals, Cyan, Dana Petroleum, Inditherm, Intermodal Resources, Lambert Howarth, National Express, Punch Graphix, Skyepharma, Watermark.

FRIDAY Results: Full year - None expected; Interims - Adventis, Apace Media, Clinical Computing, Northern Racing, Songbird Estates.

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