The Week Ahead: Debt worries leave Yell with little to shout about

The market will be keen to hear from Yell, the directories group which is due to publish first-quarter results on Thursday.

The company's shares have slumped by more than 84 per cent over the last year, owing to growing concern about the levels of debt on its balance sheet and about deteriorating revenues. UBS, whose analysts reduced their target price for the stock from 135p to 65p last week, said that the share price will remain volatile over the coming months, and moves of +/- 10 per cent "are likely to be a daily occurrence".

Against this background, while the company is likely to meet its quarterly guidance of zero per cent organic growth this week, the broker expects the focus to be on the group's outlook. "... We believe Yell may struggle to meet debt repayments from next year onwards," said UBS. "Equity upside therefore hinges on revenues, but with a deteriorating economic outlook and advertising downgrades in the US, UK and Spain accelerating, we believe the risk to earnings remains on the downside."

TODAY: The Cambridge-based software company Autonomy is due to publish results for both the second quarter and the six months to the end of June. The headline numbers were flagged in a trading statement two weeks ago, which indicated that both revenue and earnings per share would come in significantly ahead of consensus. According to the latest guidance, revenues are expected to be between $122m (£61m) and $125m, with between 15.3 cents and 16.23 cents in adjusted earnings per share.

"The results will not include any significant contribution from the recently secured large financial services contracts," said Seymour Pierce in a recent preview note. "However, given the large deals announced in recent weeks, and the ongoing strength of demand across all areas of the business, we would be surprised if the company did not take this opportunity to [upwardly revise its guidance for 2008], if only modestly."

Results/Updates: Domino's Pizza UK & Ireland, SThree, UBC Media, Autonomy Corporation.

TOMORROW: Vodafone will publish a quarterly interim management statement tomorrow, which "should be OK", according to Cazenove. "We expect overall organic revenue growth to be comparable to [the fourth quarter], supported by an increasing contribution from emerging markets," the broker said. "However, underlying growth rates in both Europe and EMAPA [Eastern Europe, Middle East, Africa, Asian Pacific and affiliates] are likely to have fallen, reflecting economic weakness in both Spain and the UK, together with a challenging Turkish market."

Results/Updates: SCI Entertainment, Severn Trent, Vodafone.

WEDNESDAY: Tate & Lyle is due to issue a first-quarter update and Citigroup expects trading to be in-line with management expectations.

"TALFIIA [the Americas food and industrial ingredients division], helped in no small part by unprecedented corn by-product prices, will likely continue to offset weak performance in sugars and in TALFIIE [the European food and industrial ingredients division]," said the broker.

Results/Updates: GlaxoSmithKline, Galiform, Halfords, Daily Mail & General Trust,Tate & Lyle.

THURSDAY: The FTSE 100-listed outsourcing group Capita is due to publish interim results later this week. Evolution Sec-urities forecasts 12 per cent growth in pre-tax profits to £116.5m, a 14 per cent rise in earnings per share to 13.5p and an interim dividend of 4.8p.

The broker said that while the results will show growth, "it is new contracts, rather than acquisitions and share buy-backs, which are required to sustain" the share price.

"As always, it is contract wins that drive the share price," Evolution said. "On the positive side, the group has won longer-term contracts, but on the negative side, the average annual revenue is low (3.4 per cent) as a percentage of the total group revenue. Given, for instance, the £60m London congestion charge revenue which drops out next year, contract wins are important."

Results/Updates: BG, Rolls Royce, Misys, Kingfisher, Imperial Tobacco, Yell, Capita.

FRIDAY: The drinks maker Britvic will publish a third-quarter trading statement at the end of the week and Citigroup expects news of continuing weakness in the on-trade business – where drinks are sold in a pub or a bar. The off-trade business – drinks sold in shops – is expected to be stronger, however.

Cazenove said that while the on-trade will have been a headwind to recent trading, "given a reassuring start to the quarter and the benign weather of the last three months", Britvic should show evidence of "resilient performance".

"We also feel it is likely there will be updates to the synergy targets for the Irish acquisition [Britvic acquired the soft drinks business of C&C group in 2007]," said the broker. "We do not feel that the current target of €14m (£11m) is at all taxing and expect it to be upgraded in due course, possibly at the investor seminar on 10 September."

Results/Updates: Beazley, Mitchells & Butlers, United Utilities, Britvic.

PROMOTED VIDEO
News
ebooksNow available in paperback
Latest stories from i100
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

Citifocus Ltd: Product Development - Asset Management

£Attractive: Citifocus Ltd: High calibre individual with significant product d...

Citifocus Ltd: Credit Ratings - Banking Sector

£Negotiable: Citifocus Ltd: Leading global bank seeks experienced credit analy...

Citifocus Ltd: Economic Crime Investigation & Analysis

£Attractive Package: Citifocus Ltd: High calibre individual with a high degree...

Citifocus Ltd: Snr Risk Analyst - Capital & Liquidity

£Attractive: Citifocus Ltd: High calibre individual with superior academics an...

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
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
'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
In a world of Saudi bullying, right-wing Israeli ministers and the twilight of Obama, Iran is looking like a possible policeman of the Gulf

Iran is shifting from pariah to possible future policeman of the Gulf

Robert Fisk on our crisis with Iran
The young are the new poor: A third of young people pushed into poverty

The young are the new poor

Sharp increase in the number of under-25s living in poverty