Stock Market Week: More profits to keep the market happy

THE DELUGE of high-profile profit figures continues this week as more companies with calendar year-ends buckle down to the sometimes unenviable task of letting their shareholders know how they fared on the trading front.

The Footsie contingent includes Hays and Rentokil - who follow each other's fortunes closely - Norwich Union and Rolls-Royce.

Among well known second liners are Burmah Castrol, Arriva, Thistle Hotels and Vickers.

The generally sound profit displays being turned in by our leading companies was one of the influences that helped Footsie reach a new peak last week. The fear that earnings will be particularly flat this year, a factor behind many of the more bearish Footsie forecasts, has yet to be realised.

There is no reason to believe that this week's performances will seriously dent the stock market's enthusiasm, although the impact of the strong pound will be evident among some of the groups at the sharp end of the trading environment.

Hays and Rentokil, classified by the Stock Exchange as business support groups, should be among those chalking up profit gains. Rentokil's full- year figures may fall short of the 20 per cent progress still associated with chief executive Sir Clive Thompson, but a pounds 491m outturn, up 18 per cent, should be possible.

Rentokil, however, needs another deal. The benefits of its highly successful BET takeover are coming to an end, which will hurt the current year's figures. The ratcatchers are known to have cast around for a suitable candidate - Compass, the contract caterer, is one which has been examined - but there is now a feeling that the group will be obliged to descend on an overseas group. Hays, with distribution and recruitment interests, is one of the few offering half-year figures. It should manage pounds 110m against pounds 92.2m.

A pre-tax operating profit up 8 per cent to pounds 700m is the likely outcome for insurer Norwich Union. Sun Life & Provincial, currently absorbing GRE, has said it is set for a rather more impressive 38 per cent gain to pounds 318m and Royal&Sun Alliance, the GRE underbidder, could coincidentally record a 38 per cent fall to pounds 610m. Britannic will be down from pounds 177.8m to near pounds 165m.

Cigarette maker Gallaher is unlikely to light up the market with its results; a 2 per cent gain to pounds 320m is the most likely outcome.

Rolls-Royce, the aero-engine group, should underline that some engineers continue to prosper. Profits should be around pounds 300m (pounds 276m) and the order book is expected to stand at another record level.

Engineer GKN should also impress, making up for downturns in some areas, such as car components, with progress elsewhere. A year's result of pounds 444m compared with pounds 406m is on the cards.

The much changed Williams, the former conglomerate now reshaped as a security group although it still has a paints business, should managed an adjusted pounds 317m against pounds 285.1m.

Vickers, however, has already indicated that profits will be down by some 28 per cent to pounds 55m. And Cookson, the industrial materials business expected to accompany its figures with reshaping details, will be lower at around pounds 150m from pounds 179m.

Profit expectations have been pulled back at United News & Media, the Express newspaper publisher. It issued a profits warning towards the end of last year and estimates have been lowered, with the consensus resting at pounds 294m, although some investment houses have gone much lower. BT Alex.Brown is one, looking for pounds 263.5m against pounds 246.5m the previous year.

Mirror Group, where takeover bidders lurk, is seen as producing pounds 100m, up from pounds 92m. The shares are 194p against the 200p offered by Regional Independent Media and a high of nearly 250p last year. The Trinity provincial newspaper group hovers, although it would probably like to see the national newspapers hived off if it took over the Mirror. There is also, as ever, the Germans, who have expressed more than a passing interest in buying the group.

PowerGen, the generator, appears to be set for a 23 per cent profits fall to pounds 445m. And Billiton, the mining group, is also on the profits slide, with around pounds 100m in prospect, down from pounds 153.5m.

Arriva, the transport group, will suffer from lower leasing profits, although its bus side should have dinged the profits bell and the motor dealership at least held its own. A 3 per cent fall to pounds 96m is the expected outcome.

Chemical group Burmah Castrol is another under pressure; it could make around pounds 240m, down from pounds 279.7.

Thistle Hotels, which has had a turbulent year with unrealised bids and management changes, should check in with pounds 86m (pounds 79.3m) and Millennium & Copthorne Hotels is in line for pounds 60m (pounds 50.2m).

Dog of the week is likely to be RJB Mining, where falling coal output and prices are hurting and the threat of a miners' strike, although receding, has yet to disappear completely. Even the mild weather works against the company. Profits will be some pounds 68m down from pounds 172.5m. The shares, bumping along at 69p against a near 600p peak, illustrate the group's difficulties and the market's disillusion.