The Week Ahead: New-look BE is back from the brink
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Your support makes all the difference.The electricity generator British Energy comes to the City today with its first set of figures since the completion of its tortuous restructuring. BE almost collapsed in 2003 under a mountain of borrowings after a sharp drop in power prices but was saved by a debt-for-equity swap, finalised in December, which saw its creditors take control of the company.
The electricity generator British Energy comes to the City today with its first set of figures since the completion of its tortuous restructuring. BE almost collapsed in 2003 under a mountain of borrowings after a sharp drop in power prices but was saved by a debt-for-equity swap, finalised in December, which saw its creditors take control of the company.
Today's third-quarter numbers will contain a lot of legacy issues from before the company's reform. However, of most interest to analysts in the Square Mile will be how sales have performed over the past three months and the earnings before interest, tax, depreciation and amortisation (ebitda) the company has been able to generate.
Credit Suisse First Boston predicts BE will deliver ebitda of £11m for the quarter on sales of about £396m and hopes the group will boast a cash balance in the region of £430m. Also of importance to the investment community will be any information given by management regarding the outlook for power prices in the coming years.
Today: Results: Full year Internet Business; Quarto Group; Royalblue Group. Interims NetStore; PD Ports; British Energy.
Tomorrow: The strong crude price throughout 2004 will mean bumper profits for BG Group. Brokers expect the oil and gas giant to deliver annual net income growth of 24 per cent to £847m as the company enjoys booming business across all its divisions.
Results: Full year BG Group. Interims Enodis.
Wednesday: BHP Billiton will unveil another set of strong results and most analysts in the Square Mile expect this to continue throughout 2005. The natural resources giant is expected to deliver a 75 per cent jump in first-half net income to £1.2bn. This is due to ongoing strength in commodity prices and the fact that BHP continues to generate impressive cost savings.
Elsewhere, profit growth at Standard Chartered will not be as dramatic but nevertheless will be respectable. Brokers predict that the emerging market-focused bank will post a full-year pre-tax profit of $2bn (£1bn), compared with $1.7bn last time. Further details about the group's recent purchase of Korea First Bank will certainly be welcomed by investors.
Last month's trading statement from Reuters indicated that business is definitely on the turn at the information giant and so the group's full-year results are unlikely to disappoint. Profits should come in at £266m, up from £190m in 2003, and some are expecting news that the company will pay a dividend for the year of 10p per share. The future of Reuters' stake in Instinet, the electronic brokerage, will be a talking point. Some have suggested that if the group decides to cash in on its holding, then a return of capital to investors could be on the cards.
Results: Full year AB Ports; Corac; CSR; RAC; Reuters; Standard Chartered. Interims BHP Billiton.
Thursday: The weak dollar during 2004 will have held back earnings at Reed Elsevier, although the publisher's underlying performance should meet expectations. Analysts are hoping Reed can deliver mid-to-high single-digit earnings growth. The outlook statement that will be delivered by management will be key to how the market reacts and investors are hoping Reed will indicate a recovery in science publishing. The figures should herald a continued improvement at the group's legal and business publishing divisions. Williams de Broe believes Reed will deliver a pre-tax profit of £1bn, flat on that seen in 2003.
Diageo is tipped to produce solid top-line growth in its first-half results thanks to innovative new products and aggressive advertising. The roll-out of the drinks giant's dedicated sales teams in the US should have reinforced this trend. Specifically, Diageo is believed to have experienced strong trading with spirits sales up by 6 per cent in the US. The group's ready-to-drink products are also said to be registering healthy growth thanks to innovations such as its Smirnoff Twist formula. However, at the profit line, little improvement is forecast on the £1.2bn seen last time.
Results: Full year Reed Elsevier; Zetex. Interims Diageo.
Friday: This looks set to be a year of modest growth for Go-Ahead Group, according to Williams de Broe. It hopes that progress at the company's bus division can offset a decline in rail profits. At the interim stage the group should register a pre-tax profit of £48m, up from £46m previously. Looking forward, the broker believes Go-Ahead has a good chance of winning the Kent rail franchise but warns investors that this process can prove to be something of a lottery.
Results: Full year None. Interims Go-Ahead Group; Vebnet.
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