The collapse of ITV Digital and the future of the telecoms sector will be in the spotlight again this week as the likes of Vodafone, mmO2, Granada andCarlton Communications come to the market with eagerly awaited results.
Investors will be looking for signs of encouragement from Vodafone’s full-year results announcement on Tuesday after seeing the mobile phone group’s share price dip below the £1 barrier earlier this month.
In particular, management will need to convince the market that its revenue revenue per user level can start to rise by the year end.
Write-downs on past acquisitions could hurt Vodafone’s bottom-line figure, but fund manager Gerrard said the pre-tax profit total before exceptionals was likely to rise to £5.6bn from £4bn a year earlier.
Market reaction to mmO2’s maiden set of full-year results on Wednesday is almost certain to be driven by comparisons to its largest competitor Vodafone a day earlier.
Apart from good news from top line growth and margin improvements, capital expenditure and net debt levels could also beat estimates as mmO2 slows down its 3G roll out plans.
However, the market will be looking for further signs of progress towards breakeven targets in its German and Dutch operations.
Full-year losses are expected to narrow from £621m to £311m this time.
Following the collapse of ITV Digital, investors will be looking for signs of a new ITV strategy from its owners when Carlton Communications and Granada report interim results on Tuesday and Thursday respectively.
Detail will be sought on costs associated with the failed business, with those losses and the general decline in advertising revenue likely to cause Granada’s operating profit to fall by a third and leave an underlying pretax loss of £43m.
Fund manager Gerrard said operating profits at Carlton Communications were forecast to fall by two-thirds and lead to a widening of underlying losses at £88m.
The pair will also be quizzed about consolidation opportunities leading from the recent draft Communications Bill and the general outlook for the advertising market.
Sainsbury’s has already reported like-for-like sales growth of 6% in the year to 31 March, so interest at Wednesday’s annual results presentation will be on the progress of the retailer’s recovery strategy.
Among the major areas of interest will be whether the level of investment in low prices has affected profit margins as chief executive Sir Peter Davis continues to draw back shoppers to the group.
Pretax profits are expected to hit £620m from £549m a year ago.
There are unlikely to be any surprises from the US supermarket business Shaws as sales growth has been reasonable in the face of tough conditions.
Investors will discover if the fragile market for new share issues has checked GUS’s plans to float trendy fashion label Burberry when the retailer reports final results on Wednesday.
GUS had hoped to float Burberry by the end of June with the proviso that market conditions had to be favourable.
The board may have decided to rethink its strategy given the lukewarm reaction to HMV and Punch Taverns recently.
The results will likely be dominated by Argos, which grew sales by 13% on a like-for-like basis in the second half.
Fund manager Gerrard predicts pretax profits for the GUS group of £541.2m, up from £486.8 m.
High street chemist Boots will be looking to reassure the City on Wednesday after doubts were raised about its accounting methods by stockbroker Credit Suisse First Boston just two weeks ago.
A note from CSFB, firmly dismissed by Boots, claimed the company’s accounting flattered the underlying view of its profits and was largely blamed for a 4% share slide that day.
Boots is likely to report pretax profits of £621.2m for the recent financial year, up from £581.1m and is expected to outline further details on its strategic review, which could see the roll-out of its Wellbeing concept.
Electricity giant National Grid will be pressed for further details on its planned £15bn merger with gas pipeline group Lattice when it posts annual results Thursday.
The group unveiled the merger last month and information on how the deal is progressing will take centre stage alongside an update on the integration of the US-based Niagara Mohawk business it bought last year.
This deal has increased net debt to around £8.5bn and this could cast a shadow on pretax profits expected to come in at the top end of City forecasts, £543m, compared with £481m a year ago.
Automation and controls group Invensys reaches a major landmark in its restructuring campaign on Thursday when new chief executive Rick Haythornthwaite announces his first set of full-year results at the company.
Since details of the review were announced in February, trading is thought to have been mixed, with early signs of recovery in appliance and climate controls offset by weakness in telecoms and IT markets.
As well as the group’s view on trading for the rest of the year, investors will be looking for further progress on a £1.5bn debt-reduction disposal programme.
Underlying pre-tax profits are likely to have fallen from £707m to £360m.
EGi News 27/05/02
