Company results and bets on the next rates move continue to dominate


Company results should continue to dominate the stock market this week although with the Bundesbank in session on Thursday interest rates considerations, which have tended to fade into the background, could again influence proceedings.

Blue chips, partly on political uncertainties, have lost much of their exuberance during the current results season but there is no doubt that the deluge of figures has generally been at the upper end of expectations.

The underlying firmness of the market and its satisfaction with the run of results is reflected in the performance of second-line shares, the 250 equities frisking in the shadow of the 100 blue chips.

Whereas the blue chip index, the FT-SE 100, is some distance from its peak the supporting index has been persistently hitting new highs.

There must be a possibility that as Thursday approaches speculation could mount about a German interest rate cut. And should the Germans, as some suspect, nudge rates lower the market will see pressure developing on the UK authorities for a further reduction.

Corporate activity and share buy-backs are two other big influences on the market. Since the pounds 3.9bn fast and furious battle between Granada and Forte there has, to the surprise of most observers, been little takeover activity. Trafalgar House has fallen for pounds 900m to Kvaerner, the Norwegian group, and South West Water has attracted the attention, but as yet no bids, of Severn Trent and Wessex Water.

Still in the market, as far as bids are concerned, hope springs eternal. Ladbroke Group remains the punters' favourite, with Cable & Wireless and an array of electric and water utilities not far behind.

Share buy backs - an admission that a company is short of ideas on how to spend its cash - are a regular feature of market life. Guinness, the brewing and distilling giant, demonstrated the habit was alive and well on Friday when it splashed out pounds 463m on 100 million shares.

Among the more intriguing results due this week are Inchcape and Kingfisher. Inchcape, largely because of the strength of the Japanese yen and the problems of the car industry, has had a depressing time. Its shares, 262p on Friday, were 623p three years ago. Profits were pounds 271.4m in 1993. Today the new chairman, Sir Colin Marshall, is expected to show profits of pounds 140m which could be hit by exceptional items.

It is possible Sir Colin will also suffer the indignity of presiding over a dividend cut.

NatWest Securities, the investment house, believes if the dividend is to be lowered it should be sooner rather than later. "A cut is more palatable if Inchcape can outline what it intends to do with the cash saved," it says.

Kingfisher, reporting on Wednesday, is expected to demonstrate that Sir Geoff Mulcahy, chief executive, has delivered his promise to avoid the disastrous mistakes of 1994 when Kingfisher had the dubious distinction of being the worst-performing blue chip. Profits will not be devoid of growth this year; pounds 275m against pounds 244.2m is likely.

Do-it-yourself is Kingfisher's big problem. Like others in this once booming corner of the retail market it has found the going exceedingly tough with profits under intense pressure. It is possible Sir Geoff will use the occasion of the group's results to announce some sweeping changes at B&Q, its DIY off-shoot.

Next, another entry for Thursday, should, by contrast, produce another set of splendid figures, say a 20 per cent gain to pounds 123m.

The market expects P&O, reporting tomorrow, to accompany what will be uninspiring figures with details of disposals. Perhaps Bovis, the group's building off-shoot, will be sold.

P&O's cross-channel ferries are clearly feeling the pinch and its container business is under pressure. But cruising is one area where P&O should be prospering. Profits are likely to come in at around pounds 305m against pounds 341.4m.

Barratt Developments on Wednesday should show that housebuilders can still lift profits, even when their market is deeply depressed. Sir Lawrie Barratt, chairman, could produce year's profits of pounds 17.7m against pounds 16.1m.

Taylor Woodrow tomorrow will also push profits ahead, perhaps producing pounds 48.5m against pounds 42.8m. But a sharp profits fall is signalled at Caradon, the building products and security printing group, and pounds 155m is possible against pounds 201.2m when it reports on Wednesday.

Wm Morrison, the supermarket chain with a profit date on Thursday, has attracted sell advice from NatWest and Greig Middleton. NatWest expects profits of pounds 125.3m against pounds 116.1m, Greig pounds 126.4m.

Alexon, the clothing group, should swing back into the black today with profits of pounds 2m; perhaps pounds 4m is in sight this year.

Queens Moat Houses, the hotel group that was almost overwhelmed by debts, should provide further evidence of recovery on Thursday. Although it is expected to make another loss, it will be about pounds 4.5m against pounds 64.1m last time. The hotel industry has so far managed to shrug off the impact of IRA bombing and continue its recovery from the recession that devastated so many companies a few years ago. There are hopes QMH should be in profit this year.

Shares of the group, valued at pounds 80m against nearly pounds 1bn at its peak, have been firm on hopes of a trading recovery and corporate action with the reclusive Barclay brothers mentioned as possible predators.

Manchester United, one of five quoted football clubs, kicks in with figures tomorrow. But the market could be more interested in the football club's television ambitions. Profits could surge to nearly pounds 19m, against the pounds 10.8m produced last time.

ebooksNow available in paperback
videoJapanese prepare for the afterlife by testing out coffins
Arts and Entertainment
Harrison Ford attends Blade Runner at Target Presents AFI's Night at the Movies at ArcLight Cinemas on 24 April, 2013 in Hollywood, California
film... but Ridley Scott won't direct
Hughes is hit by a bouncer from Sean Abbott
cricketStephen Brenkley on batsman's tragic flaw that led to critical injury
Dejected England players applaud the fans following their team's 3-0 defeat

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Langley James : IT Support; Helpdesk, VMware; Manchester, £18k

£16000 - £18000 per annum: Langley James : IT Support; Helpdesk, VMware; Manch...

h2 Recruit Ltd: Business Development Manager - HRO - £70k+ ote

£35000 - £450000 per annum + £3k car, £70k ote: h2 Recruit Ltd: Do you want to...

Citifocus Ltd: Newly Qualified Accountants - Risk Mgmt

£Attractive Package: Citifocus Ltd: Prestigious financial institution seeks to...

Citifocus Ltd: Operational Risk Analyst

£Negotiable: Citifocus Ltd: Experienced operational risk professional with ban...

Day In a Page

Homeless Veterans Christmas Appeal: Drifting and forgotten - turning lives around for ex-soldiers

Homeless Veterans Christmas Appeal: Turning lives around for ex-soldiers

Our partner charities help veterans on the brink – and get them back on their feet
Putin’s far-right ambition: Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU

Putin’s far-right ambition

Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU
Tove Jansson's Moominland: What was the inspiration for Finland's most famous family?

Escape to Moominland

What was the inspiration for Finland's most famous family?
Nightclubbing with Richard Young: The story behind his latest book of celebrity photographs

24-Hour party person

Photographer Richard Young has been snapping celebrities at play for 40 years. As his latest book is released, he reveals that it wasn’t all fun and games
Michelle Obama's school dinners: America’s children have a message for the First Lady

A taste for rebellion

US children have started an online protest against Michelle Obama’s drive for healthy school meals by posting photos of their lunches
Colouring books for adults: How the French are going crazy for Crayolas

Colouring books for adults

How the French are going crazy for Crayolas
Jack Thorne's play 'Hope': What would you do as a local politician faced with an impossible choice of cuts?

What would you do as a local politician faced with an impossible choice of cuts?

Playwright Jack Thorne's latest work 'Hope' poses the question to audiences
Ed Harcourt on Romeo Beckham and life as a court composer at Burberry

Call me Ed Mozart

Paloma Faith, Lana del Ray... Romeo Beckham. Ed Harcourt has proved that he can write for them all. But it took a personal crisis to turn him from indie star to writer-for-hire
10 best stocking fillers for foodies

Festive treats: 10 best stocking fillers for foodies

From boozy milk to wasabi, give the food-lover in your life some extra-special, unusual treats to wake up to on Christmas morning
Phil Hughes head injury: He had one weakness – it has come back to haunt him

Phil Hughes had one weakness – it has come back to haunt him

Prolific opener had world at his feet until Harmison and Flintoff bounced him
'I have an age of attraction that starts as low as four': How do you deal with a paedophile who has never committed a crime?

'I am a paedophile'

Is our approach to sex offenders helping to create more victims?
How bad do you have to be to lose a Home Office contract?

How bad do you have to be to lose a Home Office contract?

Serco given Yarl’s Wood immigration contract despite ‘vast failings’
Green Party on the march in Bristol: From a lost deposit to victory

From a lost deposit to victory

Green Party on the march in Bristol
Putting the grot right into Santa's grotto

Winter blunderlands

Putting the grot into grotto
'It just came to us, why not do it naked?' London's first nude free runner captured in breathtaking images across capital

'It just came to us, why not do it naked?'

London's first nude free runner captured in breathtaking images across capital