The Week Ahead

Brewing merger speculation places S&N under scrutiny

The recent excitement in the brewing sector, after the discovery of Interbrew's plot to take over South African Breweries, should guarantee interest in this week's interim results presentation from Scottish & Newcastle, maker of Foster's and John Smiths.

The leaked bid plans made mention of the oft-touted three-way merger of SAB, Miller and Scottish & Newcastle, and S&N's chairman, Brian Stewart, will be asked to set out his view of where the company will fit in the consolidating industry. The group has already warned analysts that it wants to expand its beer operations and a big acquisition will require a new share issue.

Last year's big purchase, France's Kronenbourg, will be contributing fully to the interim figures due tomorrow. Analysts expect profits to be only a nudge higher than last year's £240m, but the mix is different: the Center Parcs leisure business has been sold, along with more than 600 pubs. With the remaining 1,450 pubs, profits should be buoyant, thanks in part to the wonderful weather in October, and S&N is likely to restate its commitment to growing profits in this division by more than 10 per cent a year.

In brewing, though, trading is less frothy and the group has been cutting costs to keep the profits coming in.

TODAY: Results: Full year – Dawson; Potential Finance; Treatt; Zytronic. Interims – Acal; Bits Corp; Carclo Engineering; Coffee Republic; Fuller Smith & Turner; Goldshield; Health Clinic; Jasmin; RPC; UBC Media; Warner Estate.

TOMORROW: After Granada's miserable results last week – accompanied by the chairman Charles Allen's lament that spending on ITV Digital is "unacceptably high" – Carlton Communications, Granada's partner in the digital venture, confesses its own full-year losses tomorrow. At the bottom line, these could be as much as £350m, up from £237m last time, according to Deutsche Bank's estimates. Analysts will again be looking for clues as to the likely future of ITV Digital, and how the BBC and BSkyB may be able to use the financial burden. The ITV advertising slowdown, which looks like it might be easing, will have reduced Carlton's operating profit by 60 per cent to around £77m, Deutsche reckons.

Severn Trent has watched from the sidelines as other water utilities have indulged in some financial re-engineering which has loaded their regulated water business with debt to pay for expansion or a shareholder windfall. The pressure is increasing on Severn Trent itself to follow suit – or explain why not. Also alongside this week's interim results, expected to show profits up from £117m last time to between £122m and £133m in the six months to 30 September, the company will also be setting out remedial action after its information technology business, which helps other utilities with billing systems, plunged into the red.

Results: Full year – Aberdeen Asset Management; Brewin Dolphin; Carlton Communications; Learning Technology; OMG; ScS Upholstery; Shaftesbury; Ultraframe; Victrex. Interims – Anite; BSS; BTG; Christen Salvesen; East Surrey; Halma; iSoft; Mentmore Abbey; PHS; Quintain Estates; Scottish & Newcastle; Severn Trent.

WEDNESDAY: The accounting software group Sage is forecast to have made £123m of profit on £492m of sales in the year to 30 September, but analysts are concerned that much of the growth has come from acquisitions, while the trading environment remains tough and customers continue to hold back on IT spending. The disruption caused by the events of 11 September hit sales in the US, and the focus will be on trading since the financial year-end. It will also update on the progress of the integration of Interact, which it bought for £180m in the spring.

Results: Full year – Blick; De Vere; Phytopharm; Sage. Interims – AIT; Chapelthorpe; DS Smith; Expro International; Kelda; Reliance Security; Saville Gordon Estates; Wagon.

THURSDAY: The slump in tourism has left Six Continents in a strategic bind. It is looking to spend the cash pile it amassed with the sale of its pubs and Bass brewing business on some big acquisitions to bolster its interests in hotels. But hotel shares have rallied strongly in recent weeks, while trading remains depressed for now and uncertain in the future. The figures it reports this week – for the year to 30 September – will make pretty grim reading. The group has been dogged by foot-and-mouth disruption and the cyclical downturn in corporate travel, with the terrorist attacks on New York knocking $25m from the profit line, which is expected to show somewhere between £710m and £725m of pre-tax profits, compared to £759m last year.

The US government's decision to nationalise airport security has hit Securicor shares in recent weeks, since the company's Argenbright unit will lose business. The company will be asked on its plans to make up for that lost revenue when it reports figures expected to show profits fell 5 per cent to around £46m in the year to 30 September.

Results: Full year – Avon Rubber; Dewhurst; Firth Rixson; Grainger Trust; Securicor; Six Continents. Interims – Alba; Courts; Dyson; Findel; IMS Maxims; patsystems (Q3); Protherics; Pura; Samuel Heath & Sons; South Staffordshire; Synergy Healthcare; 365 Corporation.

FRIDAY: Results: Full year – none scheduled. Interims – Indigo Vision (Q1).