Business week ahead: 23 - 27 July

By This Is Money
Updated: 05:42 EDT, 23 July 2007

Our guide to all the company results, business events and economic data releases scheduled for this week.

The interim reporting season heats up this week when a raft of heavyweights from the banking, oil and pharmaceutical sectors are due to unveil figures.

BP and Royal Dutch Shell report first half profits figures this week after facing different challenges in an eventful quarter for the oil majors. The two firms report as the price of oil has passed $78 a barrel to near last August's record high in recent weeks.

Monday, 23 July

• Pizza delivery firm Domino's Pizza is expected to deliver appetising half-year results to the City on Monday after an excellent start to the year.

Launches of new pizzas such as the Meateor, Hot Stuff and Pepperoni Passion have helped the company enjoy a strong first half, which has already seen like-for-like sales jump by more than 14% in the 16 weeks to April 26.

Company watchers believe there is more to come from Domino's, which now has more than 450 stores in the UK and Ireland. It is looking to open 50 new outlets every year.

Altium Securities' analyst Greg Feehely says that Domino's is also set to gain from a heavyweight television advertising campaign, burgeoning online orders and its 'relentless' focus on speedy delivery which sees its pizzas delivered in 20 minutes on average - twice as quickly as its nearest rival.

Mr Feehely said: 'The shares have justifiably been excellent performers over the last year yet further progress remains likely in our view.

'The lack of exposure to the smoking ban is a further positive.'

Domino's posted full-year pre-tax profits of £14.2m in 2006, although analysts are expecting this to rise to around £17m this year.

FINALS: Filtronic, IG Holdings
INTERIMS: Autonomy, Domino's Pizza, RAB Capital
TRADING UPDATES: None scheduled
AGMs: Biofuels, Hamworthy, Smartfocus
EGMs: Biofuels, Sarantel
ECONOMICS: None scheduled

Tuesday 24 July

• BP prepares to post its first set of figures without Lord Browne, who was forced to resign in May after lying to a court over his relationship with former partner Jeff Chevalier.

But analysts expect new chief executive Tony Hayward's inaugural results day on Tuesday will see the company's second quarter underlying profits fall to around $5.05bn (£2.45bn), down from $6.12bn (£3bn) last time.

Production difficulties at its US refineries are behind the expected profits fall, according to Evolution Securities analyst Richard Griffiths.

BP has had unplanned maintenance stoppages and production problems at its Whiting, Carson City, Texas City and Toledo refineries, Mr Griffiths said. The difficulties meant that BP lost refining opportunities as well as forcing it into the market to buy petrol at a time when the price was rising.

But there has been some good news for BP over the period. In May the firm announced a return to Libya after more than 30 years under a £900m exploration deal.

• Retailer Sport Direct International - owner of the Sports World chain and London's landmark Lillywhites store - has had a torrid time on the stock market since flotation at the end of February.

The City and analysts are said to be unimpressed bybnaire boss Mike Ashley's approach to corporate governance and the results of the group have also disappointed, sending shares nose-diving from the 300p opening price.

The group warned in April that sales growth in its main UK retail business was slower than earlier in the year, then confidence was knocked further when chairman David Richardson quit a month later.

Now investors are bracing themselves for more bad news amid reports that the group may miss 2008 earnings targets when it unveils full year figures on Tuesday.

While the results for the year to the end of April are set to be in line with the £180m to £185m expected in underlying earnings, next year is thought to show a marked drop on the analyst consensus of £220m to £230m expected.

Nick Bubb, retail analyst at Pali International, said the current year's underlying earnings could sink as low as £160m.

Mr Bubb said: 'Sales at Sports World, the main UK business, were pumped up to unsustainable levels last year by aggressive promotions and discounting and inevitably Sports Direct is feeling the consequences now.'

FINALS: Misys, Pace Micro Technology, Thomson Intermedia, Zetar
INTERIMS: BP, Capita, Wolfson Microelectronics
TRADING UPDATES: BHP Billiton, Hat Pin, Yell
AGMs: Chloride, FKI, Fuller Smith & Turner, Invu, Johnson Matthey, Provexis, Severn Trent, Sterling Energy, Surface Technology Systems, TR Property IT, Trans Siberian Gold, Victoria, Vodafone, Volex, Wagon
EGMs: Wagon
ECONOMICS: CBI Quarterly Industrial Trends Survey (July)

Wednesday 25 July

The five interest rate rises since last August may have been hitting consumers hard in the pocket, but it seems they have also been playing havoc with mortgage lender margins.

While lenders have tended not to waste time in passing on the interest rate hikes, they still have a number of borrowers on fixed-rate deals that are yet to come to an end, many of which are looking incredibly cheap against the current deals on offer.

Add to this the worries over default rates sparked off by the sub-prime crisis in the US and the sector has had its share of troubles of late. With interims due next week from a number of major players, the sector is set to be watched closely.

• First up is Northern Rock on Wednesday. The group highlighted the issue of falling fixed rate margins last month when it issued what was effectively a profits warning. The group said it would suffer a drop in net interest income of around £180m to £200m as it waited for customers to come off cheap mortgages fixed two or three years ago. Arrears levels had also increased slightly due to the rate hikes.

Analysts have since revised expectations for full year underlying profits, from £430m to £421m, but given the further rate rise since Northern Rock's last update, the picture is unlikely to have improved and there may be worse to come if rates do increase as predicted to 6%.

• In a period where the wider FTSE 100 Index has added more than 7%, GlaxoSmithKline has seen its value fall 7%.

The main culprit behind Glaxo's woes has been the scare over the company's diabetes treatment Avandia, following claims in May that it increased the risk of heart attacks.

Glaxo has vigorously disputed the study, first reported in the New England Journal of Medicine, and countered with its own research and an expensive advertising campaign - but the damage to its share price was done.

Analysts are expecting interim profits of £1.85bn, compared with £1.89bn last time.

The continued strength of the pound against the US dollar has also worked against Glaxo - knocking the firm's sales by 4% to £5.59bn for the first quarter - as the company struggles with a more competitive environment its anti-nausea drug Zofran, antidepressant Wellbutrin and allergy treatment Flonase.

FINALS: Renishaw, Vantis
INTERIMS: Cains Beer Company, Croda International, CSR, GlaxoSmithKline, Law Debenture Corp, Northern Rock, Reckitt Benckiser, Sanctuary
TRADING UPDATES: None scheduled
AGMs: Alterian, Cambridge Mineral Resources, Charles Stanley, Erinaceous, Halfords, Helical Bar, Hornby, Imagination Technologies, International Quantum Epitaxy, London Asia Capital, McKay Securities, RPC, SSL International, Thus, Umeco, VT, Walker Greenbank
EGMs: Brightview
ECONOMICS: Motor vehicle production (June)

Thursday 26 July

• Bradford & Bingley, which follows on Thursday, is forecast to report only a modest narrowing of margins and its mortgage book is thought to have stayed strong in the first half, with analysts at Hichens Harrison & Co predicting a doubling in volume on the same time last year. The consensus is for a 11% rise in pre-tax profits to £182.4m.

However, the figures could overshadow hidden risks, according to Hitchens Harrison. B&B specialises in buy-to-let and self-certification mortgages, which are two high risk areas and particularly vulnerable to housing market movements, say the analysts, who will be looking closely at the lender's outlook on the sector for any signs of trouble.

• Analysts' consensus forecasts for Royal Dutch Shell are expecting the firm to post underlying earnings of $6.76bn (£3.3 bn) for the second quarter on Thursday - 7% higher than the $6.31bn (£3.1bn) reported last year.

The profits are expected to be higher despite continued security problems for Shell in Nigeria, where the company is losing around 180,000 barrels of oil a day in the Western Delta due to attacks from militants.

• While AstraZeneca's woes have not been as dramatic as Glaxo's, its move into the vaccines market in April after paying $15.2bn (£7.6bn) for its US rival MedImmune underwhelmed the City.

Analysts believed that AstraZeneca had overpaid for the firm. which owns and manufactures Synagis, a leading treatment for respiratory tract infections in babies and children.

But Glaxo's currency difficulties have not impacted AstraZeneca, which reports in dollars. The firm reaped a 13% boost in sales to $6.97bn (£3.49bn) - 9% at constant currency rates - in the first quarter, boosted by strong sales growth in emerging markets and Japan.

• Transport and coach group National Express managed to limit reputational damage earlier this month, with a well-timed upbeat trading statement, given that it coincided with news it had lost a major rail franchise to rival Stagecoach.

But just weeks after it missed out on the expanded East Midlands rail franchise, the group suffered a further blow with the announcement it had lost the competition to run the new, expanded long-distance Cross Country rail franchise to Arriva.

Even sparkling interims on Thursday are unlikely to detract from the disappointment to investors. The consensus figures for the past six months expect around £77.1m in pre-tax profits.

The group said recently its trains division had seen passenger numbers rise 6% in the first six months of the year with 2% growth for its coach business.

National Express is also the transport provider to the new Wembley Stadium and has taken 10,000 passengers to the venue since April.

But rail is key to the group's share price, according to analysts, and all eyes will now be on the results of the Intercity East Coast franchise, due later this summer.

FINALS: Daejan
INTERIMS: ARM, Astrazeneca, Bradford & Bingley, British American Tobacco, BT, Huveaux, IBS Opensystems, Legal & General, Liberty International, National Express, Rathbone Brothers, Reed Elsevier, Rolls-Royce, Royal Dutch Shell, Shire
TRADING UPDATES: Carphone Warehouse, Kesa Electricals, Kingfisher, Vedanta Resources
AGMs: AEA Technology, BATM Advanced Communications, Biffa, BSS, Carphone Warehouse, Celsis International, De La Rue, Domestic & General, GCap Media, Hardy Oil and Gas, Hyder Consulting, Jarvis, John David, MITIE, New Dee Valley, Pennon, Protherics, Qinetiq, Ramco Energy, Renold, Scottish & Southern Energy, Shanks, Vianet
EGMs: None scheduled
ECONOMICS: Nationwide house price index (July), BBA mortgage approvals (June), Parliament retires for summer recess

Friday 27 July

• Alliance & Leicester, which last month announced that finance director David Bennett is to become the new chief executive, is set to deliver a 9% rise in operating profits to £293m, according to analysts. The figures are due to confirm the group's recent upbeat trading statement, which said full year trading would at the top end of expectations after strong performances across the business.

But it has easy comparatives, having posted lower half-year profits last year - at £268m, down £4m on 2005 - amid a slowdown in unsecured loans.

Impairment losses for this year's interim period are set to be lower for unsecured lending than the same time last year, although analysts expect arrears to deteriorate as borrowers are squeezed further amid a climate of rising interest rates.

With all of A&L's profits coming from the UK, it is also sensitive to any housing market movements, which could pose problems for the group if property prices do slow substantially. However, while there are potential issues on the horizon for A&L, next week's figures are expected to reveal robust trading for the group and the market appears content that the group is in a safe pair of hands with Mr Bennett at the helm.

FINALS: BSkyB, Coral Products
INTERIMS: Alliance & Leicester, BG, Flying Brands, Reuters, United Business Media
TRADING UPDATES: None scheduled
AGMs: Chamberlin & Hill, Iomart, Proteome Science, United Utilities
EGMs: Morgan Sindall, Templeton Emerging Markets
ECONOMICS: None scheduled