The Week Ahead: Panmure excited by Aegis break-up talk

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Aegis is due to post full-year results this week and, despite the market's preoccupation with the slowdown in advertising, the focus is likely to be on possible plans to break up the business. Panmure Gordon, whose estimates assume a 10 per cent year-on-year decline in earnings per share for 2009, said the sale of Synovate, the advertising and marketing group's market research business, is "a clear possibility" as interim chief executive John Napier settles into his role.

"There are clear signs of a preparedness to break up Aegis, which in our view has always been a source of potential share price upside," the broker said last week.

"A sale of Synovate at around £330m would [dilute earnings per share] by around 15 per cent, reflecting the low return on cash/debt pay-down relative to the around £40m contribution of Synovate. However, it would crystallise value and probably result in a much higher value on the bigger, core business [Aegis Media]. Additionally, it would pave the way for a Havas/ Aegis Media combination."



TODAY: Fundraising plans are likely to dominate the agenda when Brixton posts full-year results this morning. The commercial property group has lagged behind its peers in raising cash, and the market has grown increasingly worried about the possibility of cov-enant breach. UBS, which forecasts 14.78p in earnings per share with a divi-dend of 13.7p, said the low share price reflected investor concerns about the group's finances, pointing out that around 40 per cent of group debt needs refinancing in 2010.

Results/updates: Clarkson, Aero Inventory, Consort Medical, Forth Ports, Innovation, TT Electronics, Stagecoach and Brixton.



TOMORROW: The construction products supplier SIG is due to post final results. Numis Securities expects the update to demonstrate the continued decline in the domestic property market, as both residential and non-residential construction activity eases.

"Continental European activities will also be the centre of attention," the broker said. "SIG expects European volumes to be flat in 2009 due to the resilience of its exposure to low cyclicality areas such as Insulation, but we believe that this can only partially offset what are clearly worsening markets, and bad weather at the start of 2009 will also not have helped."

Also tomorrow, Debenhams is due to publish a trading update and, given recent market murmurs about a possible rights issue or a share placing, any comments on the retailer's debt pile are likely to attract attention. No action is expected at this stage, but, as UBS said in a note to clients last week, given the balance sheet issues, some form of capital raising "looks likely at some stage".

Results/updates: Debenhams, Venture Production, SIG, Derwent London, Advanced Medical Solutions, BATM Advanced Communications, Collins Stewart, Friends Provident, Hikma Pharmaceuticals, Tribal and Wellstream.



WEDNESDAY: Results/updates:Alliance Pharma, French Connection, Tenon, KBC Technologies and ProStrakan.



THURSDAY: Travel group Thomas Cook is due to publish an update on trading. Last week, its stock was hammered when a senior executive was reported as saying that 2010 would be "even more difficult than this year".

Thomas Cook rushed out a statement to soothe rattled nerves, but to little avail – the stock closed more than 11 per cent down on the day. Citigroup, which weighed in on the situation soon afterwards, said that in light of deteriorating macroeconomic trends, the comments contained nothing new, adding that the group may use this week's update to downgrade guidance on meeting next year's £480m earnings target. For its part, the broker forecasts £415m, compared with a consensus of £432m.

Results/updates: Cape, European Goldfields, Investec, Playtech, Arena Leisure, Clarke, Domino Printing Services, Hardy Oil & Gas, Premier Farnell, Prudential, Thomas Cook and Aegis.



FRIDAY: UBS anticipates news of £149.1m in operating profits, compared with a consensus estimate of £146m, when Regus, the serviced office space provider, posts full-year results. "We expect the results to be reasonably strong but we think there will also be signs of weakening in key metrics, with earnings margins down about 50 basis points year-on-year," the broker said.

"We expect group occupancy to be down about 80 basis points year-on-year in the second half." Taking away beneficial currency movements, UBS also anticipates some weakness in pricing in the second half.

Results/updates: H&T, Stanley Gibbons and Regus.

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