Hopes that Carpetright can continue its roll as pundits turn bearish

STOCK MARKET WEEK

Tomorrow it will be possible to judge whether Carpetright is still on a roll. The second time around creation of Lord Harris, fund raiser for the Tories and carpet salesman extraordinary, is expected to produce another rousing profit performance.

The stock market is looking for a year's outcome near pounds 27m against the pounds 19.7m last time.

There have been fears the carpet retailing group could be a casualty of the building downturn which has hit so many retailers including the do-it-yourself sheds. But Carpetright has achieved a surprising ability to ignore such humdrum hindrances with profits making spectacular headway from pounds 2.8m in 1992.

It came to the stock market at 148p three years ago; the shares closed on Friday a little below their 624p peak.

Lord Harris, as plain Phil Harris, created the old Harris Queensway carpets and furniture operation. After a sudden profits collapse he was forced out and the company was taken over by a consortium headed, by supermarket entrepreneur Jimmy Gulliver, in a pounds 477m leveraged buy out.

But HQ, renamed Lowndes Queensway, collapsed with debts of more than pounds 200m.

Carpetright had a 116 shops chain, put together over four years, when it made its market debut. It is now nudging 250 outlets embracing the core Carpetright operation plus Premier Carpets, with concessions in other people's stores, and Carpet Depot, a superstore concept.

Although making headway, the market had another uneventful session last week; the results of the Russian election could be a significant factor this week.

The influential Schwartz stock market newsletter is becoming increasingly convinced the bull market is over. It says: "The lessons from the past now suggest even more strongly that the next big move for UK equities will be down."

Although they have lost some of their exuberance recently, an outstanding feature of the market this year has been second- and third-line shares which have generally outperformed the more illustrious blue chips.

But the newsletter, the work of David Schwartz operating from Stroud in Gloucestershire, even pours caution on the cult of the second liners.

It points out that small companies generally outscore blue chips in the opening months of a year. "But the trend soon changes for the worse. Over the last 15 years small caps significantly under-perform the big boys for the rest of the year. If 1996 continues to follow the norm, we suspect that profits from small caps in the months ahead may disappoint those hoping for above-average performance."

Richard Jeffrey at Charterhouse Tilney is still looking for progress. "In the short term there remains scope for equities to be boosted by signs of strengthening activity in the economy - so long as Wall Street manages to hold its ground.

"Further out, however, the environment for both gilts and equities is likely to become tougher."

Biggest company reporting this week is British Steel, with year's results today. Destocking and a slowdown in European industrial production has prompted many analysts to lower their expectations. Even so, the out-turn should look impressive. NatWest Securities, a long time bear of the shares, is looking for pounds 1.02bn; Panmure Gordon, another with the shares on its sell list, is on pounds 990m.

Barclays de Zoete Wedd aims for pounds 1.097bn and Societe Generale Strauss Turnbull is top of the range, shooting for pounds 1.15bn. Last year's figure was pounds 578m.

A sharp dividend increase to, say, 10p a share is looked for and there are strong hopes BS's cash hoard will prompt it into some form of distribution - a share buy back or a more shareholder friendly special dividend.

After last year's profit feast BS is set to suffer a few lean years. Current year's forecasts are around pounds 820m with pounds 360m pencilled in for next.

Airtours, with some 21 per cent of the holidays market, should indicate on Wednesday whether the sharp cutbacks it (and its rivals) made to their programmes this year have restored profits to the level the market expects.

The company, where the American Carnival Cruise group now has a near 30 per cent stake, announces first-half figures which traditionally are dipped in deep red. There are hopes it should make around pounds 75m in the year which ends in September.

The relationship between the US and US holiday groups is intriguing. Carnival is just a shade below the level which triggers a bid obligation under the takeover code. Although both sides insist they are happy with this arrangement there is a wide spread belief that in the fullness of time the Americans could move for full control.

Hazlewood Foods, due tomorrow, has been an unrewarding investment since it started its restructuring six years ago. The shares are more than half their 1990 value. Still, interim profits were higher and there are hopes it could manage pounds 33.5m. for the year. Last time the figure was pounds 32.3m but exceptional charges left the group with a wounding deficit.

Utilities continue to grace the results diary. Northern Electric is heavily geared after its distributions to shareholders following the predatory attentions of Trafalgar House which has itself since fallen to a strike, from the Norwegian Kvaerner engineering group.

Excluding any contribution from the sale of its shares in National Grid, Northern is expected to produce around pounds 130m which would represent a shortfall of about pounds 25m. But, as one expects from a utility, there should be a handsome dividend increase, from 33p to around 40p.

Hyder, the Welsh electricity and water utility, should manage pounds 130m against last year's pounds 120m with dividend generosity extending to 38p against 32.2p. Wessex Water, one of the contenders for South West Water, is likely to produce profits of pounds 134m compared with pounds 117m. Once again a mouthwatering dividend increase is possible - from 13.2p to, perhaps, 16p.

There should also be a statement from Railtrack, the latest privatisation recruit. It should merely confirm profits are around the pounds 190m signalled in the April prospectus.

PROMOTED VIDEO
News
business
News
Mick Jagger performing at Glastonbury
people
Life and Style
beautyBelgian fan lands L'Oreal campaign after being spotted at World Cup
Sport
Germany's Andre Greipel crosses the finish line to win the sixth stage of the Tour de France cycling race over 194 kilometers (120.5 miles) with start in Arras and finish in Reims, France
tour de franceGerman champion achieves sixth Tour stage win in Reims
Extras
indybest
Arts and Entertainment
Characters in the new series are based on real people, say its creators, unlike Arya and Clegane the Dog in ‘Game of Thrones’
tv'The Last Kingdom' is based on historical events
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Build & Environment Management Team Leader

£500 - £550 per day: Deerfoot IT Resources Limited: Build & Environment Manage...

2 x Risk Analysts Required - SAS - Banking

competitive: Progressive Recruitment: A world leading banking organisation are...

Brady Business Analyst - Syseca - (EBIS / EDIS) - London

£500 - £1000 per day: Harrington Starr: Harrington Starr are urgently recruiti...

Systems Accountant

£75000 - £100000 per annum: Cameron Kennedy Recruitment: We urgently require f...

Day In a Page

The true Gaza back-story that the Israelis aren’t telling this week

The true Gaza back-story that the Israelis aren’t telling this week

A future Palestine state will have no borders and be an enclave within Israel, surrounded on all sides by Israeli-held territory, says Robert Fisk
A History of the First World War in 100 Moments: The German people demand an end to the fighting

A History of the First World War in 100 Moments

The German people demand an end to the fighting
New play by Oscar Wilde's grandson reveals what the Irish wit said at his trials

New play reveals what Oscar Wilde said at trials

For a century, what Wilde actually said at his trials was a mystery. But the recent discovery of shorthand notes changed that. Now his grandson Merlin Holland has turned them into a play
Can scientists save the world's sea life from

Can scientists save our sea life?

By the end of the century, the only living things left in our oceans could be plankton and jellyfish. Alex Renton meets the scientists who are trying to turn the tide
Richard III, Trafalgar Studios, review: Martin Freeman gives highly intelligent performance

Richard III review

Martin Freeman’s psychotic monarch is big on mockery but wanting in malice
Hollywood targets Asian audiences as US films enjoy record-breaking run at Chinese box office

Hollywood targets Asian audiences

The world's second biggest movie market is fast becoming the Hollywood studios' most crucial
Grindr founder Joel Simkhai: 'I've found love on my dating app - and my mum keeps trying to hook me up!'

Grindr founder Joel Simkhai: 'I've found love on my dating app'

Five years on from its launch and Grindr is the world's most popular dating app for gay men. Its founder Joel Simkhai answers his critics, describes his isolation as a child
Autocorrect has its uses but it can go rogue with embarrassing results - so is it time to ditch it?

Is it time to ditch autocorrect?

Matthew J X Malady persuaded friends to message manually instead, but failed to factor in fat fingers and drunk texting
10 best girls' summer dresses

Frock chick: 10 best girls' summer dresses

Get them ready for the holidays with these cool and pretty options 
Westminster’s dark secret: Adultery, homosexuality, sadomasochism and abuse of children were all seemingly lumped together

Westminster’s dark secret

Adultery, homosexuality, sadomasochism and abuse of children were all seemingly lumped together
A History of the First World War in 100 Moments: Dulce et decorum est - a life cut short for a poet whose work achieved immortality

A History of the First World War in 100 Moments

Dulce et decorum est: a life cut short for a poet whose work achieved immortality
Google tells popular music website to censor album cover art in 'sexually explicit content' ban

Naked censorship?

The strange case of Google, the music website and the nudity take-down requests
Howzat! 8 best cricket bats

Howzat! 8 best cricket bats

As England take on India at Trent Bridge, here is our pick of the high-performing bats to help you up your run-count this summer 
Brazil vs Germany World Cup 2014 comment: David Luiz falls from leader figure to symbol of national humiliation

David Luiz falls from leader figure to symbol of national humiliation

Captain appears to give up as shocking 7-1 World Cup semi-final defeat threatens ramifications in Brazil