The City is looking forward to signs of improving momentum at Aegis, the marketing group which is due to issue full-year figures this Thursday.
With the economy on the mend, UBS reckons that the company could exceed margin expectations as cost savings pay off. Easier comparatives in the fourth quarter should also help, while benefits of new business wins "should ensure" that the rate of decline in revenues eases compared with the third quarter. Numis is also hopeful, saying that it expects trading to be similar to that reported by the large agency-holding groups, "with improving rates of decline against easing comparatives".
Altium adds that any news on the appointment of a new chief executive would also be helpful on the day. "These results will provide an opportunity to gauge whether the group is benefiting from the generally improving momentum across international advertising markets indicated in recent updates from Havas, Omnicom, WPP and a range of industry commentators, possibility providing some early impetus for upgrades," the broker said, noting that, closer to home, "there have been indications that market services spending is picking up".
Today: Results/updates: TT Electronics.
Tomorrow: Panmure Gordon anticipates a "strong set" of figures when the security services group G4S issues full-year results tomorrow, with the broker looking for £380m in adjusted pre-tax profits, compared with £332m last year. Elsewhere, UBS is looking for an 18 per cent hike in sales to just over £7bn, and a 19 per cent jump in earnings before interest, tax and amortisation to £496m.
"We expect a lot of focus to be on headline organic revenue growth rate, which should have stabilised," Panmure said. "In the third quarter of 2009, organic growth was 4.2 per cent, which we see as a respectable outcome given the lower inflationary environment. Within the mix, growth rates in its Secure Solutions developed markets business (around 30 per cent of revenues) remain under pressure, but this is being offset by Government and New Markets [business]."
Numis expects to see £54.6m in pre-tax profits when Close Brothers, the independent merchant bank, posts interim results tomorrow. Earnings per share are forecast to come in at 27.7p, while the dividend is expected to remain flat at 13.5p. "We expect the company to confirm that loan book growth remains strong, margins remain wide and impairment is falling, although treasury income is likely to be weak reflecting low interest rates," the broker said, repeating its "buy" stance in a preview note.
Also tomorrow Wellstream will issue full-years. Second-half operating profits are expected to be down 30 per cent, according to UBS, which sounded a note of caution on the outlook for 2010. "We expect year-on-year operating profit to turn positive in the first half of 2011, i.e. continued decline throughout 2010," the broker said, adding that, contrary to the rumour mill, it was sceptical about the prospects for deal activity. "We do not believe a takeover of a company is likely, and we therefore continue to value the company on a standalone basis."
Results/updates: Air Partner, Axis-Shield, Fairpoint, KBC Advanced Technologies, Wellstream, Close Brothers and G4S.
Wednesday: Investors may be treated to an upside surprise when Hikma Pharmaceuticals, the branded generics manufacturer, issues full-year figures midweek, with KBC Peel seeing scope for better-than-expected results. The broker is looking for $93.5m (£62m)in pre-tax profits, with $633.9m (£417m) in sales, with the former forecast coming in around 3 per cent ahead of consensus. Looking ahead, Panmure Gordon said that, in the medium term, the markets in which Hikma operates seem "very attractive". "The Middle East and North Africa (MENA) pharmaceutical market is worth $28bn (£18.4bn), and is forecast to experience robust growth in the coming decade," the broker said. "Growth will be driven by a growing and ageing population, an expanding middle class, oil-rich economies, and a move by pharmaceutical companies to enter the region as growth in the West becomes stagnant."
Results/updates: Avocet Mining, Cyprotex, Mecom, Xaar, Neovia Financial, Derwent London and Hikma Pharmaceuticals.
Thursday : Results/updates: Capital & Regional, Greggs, Investec, Premier Farnell, SIG, Salamander Energy, Savills and Aegis.
Friday: Results/updates: Headlam, T Clarke.