The Week Ahead: BSkyB to reap benefit of high-definition TV

Analysts are looking forward to another strong set of results from British Sky Broadcasting (BSkyB), the pay-television group which is due to post its half-year results on Thursday. Key performance indicators are expected to have remained strong, with Charles Stanley anticipating news of 165,000 net new pay-TV subscribers during the company's second quarter, while UBS expects to hear of 180,000 net additions. Numis is slightly behind with a forecast of 159,000.

BSkyB's high-definition TV offer is expected to have been driver of subscriber growth, with Charles Stanley forecasting a net 285,000 HD users to have been added, while Numis foresees 313,000 net HD additions. "BSkyB has marketed particularly heavily in the second quarter, including an offer of a free HD box for customers who took a movies subscription, and we therefore view our subscriber forecasts as conservative," Numis said, repeating its "buy" stance on the stock last week.

Charles Stanley, which maintains an "accumulate" rating on BSkyB shares, said there had been few signs to date that the company was affected by the recession. It added: "Subscriber growth has actually accelerated in recent quarters, reflecting the introduction of innovative technologies (for example, HD) and perhaps increased demand among consumers for relatively inexpensive entertainment in their own homes."



Today: Filtronic, the telecoms technology company, is due to issue interim results this morning, and although demand from customers is likely to have improved, business from Nokia Siemens Networks (NSN), one of Filtronic's larger customers, "is likely to have continued to be highly suppressed", according to Panmure Gordon.

"We believe much of Filtronic's demand from NSN has been driven from wireless network rollouts in India. This activity was buoyant until [the third quarter of 2008], where there was a pause due to the financial crisis," the broker said. "While there has been some recovery in the latter part of [2009], NSN has also suffered from market-share losses and has needed to digest inventory. This is likely to have driven continued low levels of demand for Filtronic from NSN."

Results/updates: Filtronic.



Tomorrow: Playtech may issue a "solid" update, with Numis pointing out that the normal seasonal uptick in activity has been "clearly apparent" in recent results from online gaming companies. "[Playtech's rival] 888 reported that fourth-quarter trading had been 'strong' and in line with management's expectations, while PartyGaming reported solid current trading and a return to sequential revenue growth in all product verticals," the broker said.

Also tomorrow, UBS expects few surprises when Sage issues its first-quarter interim management statement, with trading at the software house likely to be in line with its expectations. Numis also anticipates an in-line statement. "We anticipate no figures being disclosed except net debt, which we expect to be about £400m at December 2009 versus £439m at September 2009," Numis said.

Results/updates: Porvair, PZ Cussons, Intermediate Capital, Sage and Playtech.

Wednesday: Numis expects a "relatively upbeat announcement" when the precision-engineering group Renishaw posts interim results. "Leading indicators, in particular Japanese machine-tool orders, have pointed to improving trends and recent data would suggest stronger revenues for Renishaw through its second quarter," the broker said. It forecast an order run-rate of £14m per month from October, pointing to £3m in interim pre- tax profits.

Altium was also hopeful, saying: "Demand is expected to remain robust and, while some increase in cost should be expected, we believe the group will be more cautious than in past cycles and this could accelerate the rate of recovery in pre-tax profits."

Results/updates: Tullow Oil, Britvic, WHSmith and Renishaw.



THURsday: UBS is upbeat ahead of AstraZeneca's full-year numbers, which are due later this week. The broker expects the drug company's fourth-quarter sales to rise to $9.02bn (£5.6bn), up 9.9 per cent year on year, while earnings per share are forecast to swell to $1.61 (£1), up 8.1 per cent year on year.

"We believe the stock should perform through the numbers. Astra has posted three consecutive quarters beating consensus by more than 15 per cent on core earnings per share," UBS said. "We also see scope for it to announce plans for the use of its cash, such as a new share buyback, an increase in dividends, or new plans for sustainable growth from bolt on acquisitions."

Results/updates: Cairn Energy, Eaga, JJB Sports, AstraZeneca and British Sky Broadcasting.



FRIDAY: Results/updates: None scheduled.

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