The Week Ahead: Whitbread due a shot in the arm from Costa Coffee

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The Independent Online

Considering that you can drink, eat and sleep at Whitbread-owned businesses, it is fair to say that results from the leisure group provide a fairly wide-reaching snapshot of the British consumer. Despite the current economic situation, the company's second-quarter figures in September impressed, and rightly so. Like-for-like sales at its Costa Coffee chain frothed up 9.7 per cent, while Premier Inn enjoyed a 7.1 per cent jump.

However, Tuesday's interim results will still see investors looking out for "any signs of a slowdown in the third quarter and beyond", according to Deutsche Bank. But analysts from the German broker believe it will post a pre-tax profit for the first six months of £162m, even taking into account the pressure on consumers' wallets.

That would be a 7 per cent year-on-year rise, but Morgan Stanley is even more bullish. Predicting a "strong first half", itestimates a 14 per cent increase to £173m, boosted by profits at Costa rising by a huge 43 per cent.

The broker's scribblers believe the unit will have been helped by new products and changes to its stores, while adding that "the international businesses are increasingly contributing to the bottom line".

They also feel that dynamic pricing will have given a boost to the group's Premier Inn budget hotel chain, although they will be watchful for comments on Whitbread's hotel strategy away from these shores "where the company aims to reduce its capital exposure".


Results/updates: No major companies due to report.


Bellway has enjoyed a rise of more than 25 per cent in less than two months, so the housebuilder will hope it can continue the trend following its preliminary results on Tuesday. Numis Securities' Chris Millington is optimistic, forecasting a "strong update... at the upper end of analyst expectations", and predicts its earnings margin will increase to 8.5 per cent – 200 basis points higher than the previous year.

Results/updates: Bellway, United Business Media, Whitbread and Xstrata.


When BSkyB released its full-year results back in July, its net new TV subscribers over the final quarter of 40,000 disappointed some in the City. However, Deutsche Bank's analysts believe that, with thebroadcaster's first-quarter figures out on Wednesday, the market should start to concentrate more on sales of all of its products, including broadband and telephone line rental.

Deutsche thinks that net additions to Sky's satellite TV service are again likely to be "modest" thanks largely to current economic pressures, adding that the period "will be a good test of the revenue and earnings growth Sky can deliver without expansion in the pay-TV base."

Homebase-owner Home Retail is also updating the market on Wednesday with its half-year results, and once again its struggling Argos chain is likely to be the focus. The group saw a drop in its like-for-like sales over the second quarter of 8.6 per cent, prompting some to argue for the closure of a number of stores, although this idea was rejected recently by chief executive Terry Duddy.

Panmure Gordon's Philip Dorgan notes pretax profit predictions among analysts range between £24m and £36m, although none of them compares favourably with the previous year's £103m.

"We think that the first-half will leave Home Retail with too much to do to hit full-year forecasts," say the analysts.

Results/updates: BHP Billiton, BSkyB,Diageo, GKN, Home Retail, Sports Direct.


Investors in SAB Miller will be hoping they can raise a pint to the Grolsch-owner on Thursday when it issues its trading update for the second-quarter. Thanks to much tougher comparatives, UBS is expecting organic lager volume to slow to 3.2 per cent from 5.2 per cent during the previous three months, resulting in a 4 per cent jump in total over the first half.

The broker believes its performance in Latin America will be strongest, but that in Europe its volumes will stay flat while South Africa and China will also be tough. In the US and Canada, UBS says SAB will have been hit by "high unemployment levels among core beer consumers".

Results/updates: African Barrick Gold, Anglo American, Britvic, Cairn Energy, Debenhams, Hochschild Mining, Petrofac, Petropavlovsk and SAB Miller.


Results/updates: Aggreko, ProvidentFinancial and Rank.

Economics Diary


Rightmove house price index;US industrial production.


Consumer price index; US producer price index.


Bank of England MPC minutes; US consumer price index; US housing starts.


Retail sales data;

US existing home sales;US Philadelphia Fed.


Public sector finances.