The Week Ahead: Velti set to ring in positive interim results

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The Independent Online

TODAY: Velti, the mobile phone marketing group, kicks off the week's results with what analysts expect will be positive interim results that will show a year of profit growth.

The company has benefited from new contracts with Vodafone and Orange in the UK, as well as with several foreign operators. Other new deals with Honda, Coca Cola and Colgate have persuaded analysts and investors of Velti's long-term potential. The acquisition of rival Ad Infuse in May forced the company to take out two medium-term loans totalling roughly €10m, though it claims the success of the venture should be visible in the results.

An analyst observed the company is very much on track and is benefiting from a wider move from web marketing to mobile ads that is similar to how the internet took over from classified ads. He went on to say that: "Velti is very well positioned to ride this wave."

Results/Updates: Glisten, Velti, Plant Health Care, Antisoma.

TOMORROW: Debenhams kicks off what is expected to be a week of mixed results for a string of major retailers, proving that while consumer confidence slowly returns, concerns still remain about the future of the high street. Analysts at KBC Peel Hunt expect to see a decline of about 5 per cent in Debenhams' fourth-quarter sales, though their forecast of an £120m full-year pre-tax profit remains in place. Debenhams is moving store space away from concessions to more profitable own-bought ranges with brands expected to make up 85 per cent of stock by August 2010.

Results/Updates: Debenhams, Ashmore, Cello Group, Brooks MacDonald, Dunelm, Ambrian Capital, Vindon Healthcare, Hargreaves Services.

WEDNESDAY: According to forecasts, Next will announce pre-tax profits of £180m, up 5 per cent on the same period last year, though analysts are divided on the group's plans for the future.

In a note to investors, Merrill Lynch encourages an expansion into the homeware market following a similar model to Debenhams, though Exane BNP Paribas are critical of plans for 20 new homeware stores, of which half are to be opened this year and the rest set for 2010, arguing that such growth will result in a "cannibalising" of existing stores. As such, the Exane watchers recommend competitors Kingfisher and Inditex to investors, seeing better growth potential. Next Directory, the mail order side of the business which produces a quarter of group sales, is expected to report a £79m profit, up 1 per cent.

However, the division is more exposed to bad debts than the retail side of the business as 80 per cent of directory customers do not pay off their accounts at the end of the month. The outstanding amount is likely to touch £117m.

Results/Updates: Aero Inventory, Bushet Museum Property, Climate Exchange, Next, Tenon, Cape.

THURSDAY: Kingfisher had intended to release its trading figures for the six months to August, but was forced to publish a summary of the numbers after they were leaked last Monday. The forecast announced pre-tax profits of around £290m and a retail profit of roughly £350m. Charles Stanley analysts believe the rebound in the profitability of the company's UK & Ireland operations was down to the 67 per cent hike in retail profit at B&Q. Sales at the home improvement chain are up 2.1 per cent, driven by good weather, the timing of Easter and extra demand for fitted kitchens and bathrooms after MFI's collapse. The trade side of Kingfisher's UK operation, Screwfix, suffered a decline in total sales of 6 per cent, hit by tough trading.

The forecast also showed a first-year profit of £199m in the company's overseas interests, which include French home improvement chain, Brico Depot. Despite positive results, the group's dependence on good weather and a cloudy outlook for DIY markets more generally has lead analysts to caution investors looking to acquire Kingfisher stock.

Results/Updates: Kingfisher, Wilmington, French Connection, Kier, Centaur.

FRIDAY: Regal Petroleum will publish interim results, which are expected to show strengthening Ukrainian operations where the group has acquired new drilling licences. The expansion into the Ukrainian gas market has led to analysts at asset management firm Mirabaud to identify the group as a top pick.

The company has impressed the market by financing its development plan in the Ukraine from existing resources, though Mirabaud analysts expect the company will have to explore other forms of finance in order to increase the pace of long-term growth.

Mirabaud also praise the company's separate $105m fundraising effort, which it finalised recently, giving the group roughly $179m of cash.

Results/Updates: Bluebay Asset Management, Regal Petroleum.

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