The Week Ahead: DSG profits to dive after series of warnings

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The Independent Online

PC World and Currys owner DSG International is due to publish preliminary results on Thursday and, following a series of profits warnings, the figures are unlikely to inspire investors. The group has already guided that full-year underlying pre-tax profits will come in between £200m and £210m, below the £295.1m reported in 2007. Citigroup's prediction is a neat £200m, while UBS is in the middle of the range with £205m.

"Profits at Currys may suffer a slight decline to £90m (vs £103m last year), although we forecast a more severe decline at PC World (minus 46 per cent year on year) to £67.5m," said UBS. "We estimate a slightly weaker year-on-year performance in Nordic, with increasing losses in start-up and developing businesses. We expect losses in Italy will have worsened further to £22.5m (vs a £7m loss in 2007)."

today: The engineering group Weir is due to publish a first-half trading statement, and given the strength in the company's end markets (mining, oil & gas and power) UBS is expecting an upbeat update. "Weir commented in May that they were still seeing strong like-for-like growth in order input and revenues in the first quarter of 2008, and we doubt that this trend has changed," the broker said in a recent preview note.

Results/updates: ACM Shipping, Braveheart Investment, Aggreko, Weir.

Tomorrow: The defence group Chemring is due to publish first-half results. UBS forecasts revenues of £144.9m with earnings per share of 60.5p.

"We believe investors will be focusing most on the management's outlook for the second half and the company's order book," the broker said. "The latter is closely monitored by investors, as the majority of Chemring's orders normally translate into revenues within 12 to 28 months."

In the outlook, UBS expects the market to focus on management's views on US defence spending in light of the presidential election in November.

The broker added: "Finally, questions will likely also arise on Chemring's acquisition pipeline, given management's target to spend £100m per annum on deals for the Energetics division."

Results/updates: Kesa Electricals, Thomas Cook, Porvair, Safestore, Ashtead, Regal Petroleum, Petrofac, Chemring.

Wednesday: The engineering and design consultancy WS Atkins is due to publish full-year results. Panmure Gordon predicts £92m in pre-tax profits, up 31 per cent compared with 2007, on revenues of £1.315bn, up 8 per cent on the year before. Earnings per share are expected to rise by 38 per cent to 66.2p.

"Scale, business mix, delivery and good exposure to the buoyant Middle East markets are the key differentiators for Atkins," Panmure said in a recent preview note, reiterating its positive stance on the stock.

Results/updates: Protonex Technology Corp, Assura, Ishaan Real Estate, WS Atkins.

Thursday: United Business Media, the media group which tried to merge with Informa earlier this month, is due to publish a trading update, and Citigroup is not expecting any surprises.

"We recently heard from UBM at its interim management statement [in May] and therefore expect little to have changed," the broker said, adding: "In May, UBM said that despite volatile markets, trading performance was 'solid' and the company remained 'confident of the prospect for the full year'. We look to see if the tone of the outlook statement remains confident or has turned more cautious."

Also on Thursday, the paper, packaging and office products group DS Smith is due to publish second-half results. While the figures are expected to be strong, analysts at UBS expect the company to strike a cautious tone in the outlook statement, due to slowing corrugated demand and capacity addition in 2009. Continued cost pressures, as energy and chemicals become more expensive, are also expected to colour the commentary.

Results/updates: Avesco, Dyson, Goldshield, Scott Wilson, Arriva, Standard Chartered, Wellstream, DS Smith, United Business Media, DSG International.

Friday: The software group Micro Focus International is due to publish final results, and Panmure Gordon expects the numbers to be consistent with the company's May trading update, which was better than forecast.

"Micro Focus has just closed the NetManage acquisition, and we expect a confident team to take the podium," the broker said, adding: "Although mindful of the faltering economy, the outlook commentary should be positive and... Micro Focus is likely to fare better than most in any downturn."

The house builder Berkeley is due to publish preliminary results at the end of this week and, given the slowdown in the housing market, the focus is likely to fall on the company's forward order book, which UBS expects to come in at over £1bn.

"Berkeley is the best positioned to weather the storm in the sector, and we still anticipate the 300p per share capital return in June 2009," the broker said.

Results/updates: Hexagon Human Capital, Berkeley, Micro Focus International.

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