UK Companies Diary: Investors punt on generous return from William Hill

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MONDAY

■Apart from full-year results from HSBC that will detail the extent of bad debt provisions for 2006, UK company investors will look to William Hill, which is expecting results in line with expectations when it reports full-year results with sales driven by a good football World Cup, integration of Stanley Leisure and growth in its interactive division. Investors will be hoping for a continuation of its generous share buy-back programme but it could surprise shareholders by holding back cash for acquisitions. Analysts are forecasting pre-tax profit of about £238.32m on sales of £12.44bn.

TUESDAY

■Xstrata, the mining group, will unveil its first set of annual results to include a slew of newly acquired operations and analysts have forecast bumper profit. Nobody could accuse Xstrata of slacking off during 2006. Last year, it not only acquired the Tintaya copper mine in Peru and a one-third stake in the Cerrejon coal mine in Colombia but it also pulled off the takeover of Falconbridge, the Canadian miner, following a battle with rival Inco. One of the mining sector’s largest acquisitions, the purchase of Falconbridge has given Xstrata an entry into the nickel business and enlarged significantly its copper assets. The consensus pro forma forecast (including a full year of Falconbridge profit) is for Xstrata to announce $8.3bn of earnings before interest and tax and net earnings of $4.6bn. The market will want to hear about how the integration of Falconbridge is going and whether cost savings are being achieved.

■Redrow sounded cautious about the prospects for the housebuilding industry in a trading statement in January despite meeting expectations. That caution appeared justified after interest rate rises from the Bank of England tried to slow inflation. Neil Fitzsimmons, chief executive, said he was frustrated with the difficulties of getting planning permission, which was putting a brake on growth. Fears of further rate rises appear to have subsided and rival housebuilders have produced a cautiously optimistic set of results recently. Interim pre-tax profit is expected to be broadly flat at about £126m.

■Following the downbeat trading statement in December, investors will be hoping to see that business at Premier Foods has picked up over the Christmas period. Pre-tax profit is expected to come in at £96.39m, according to consensus forecasts, on sales of £947m.

WEDNESDAY

■Johnston Press, the regional newspaper publisher, which announces its full-year results for the 12 months to December, is expected to note an easing in the rate of decline in the regional newspaper advertising market. Trinity Mirror, owner of the Daily Mirror, last week noted a stabilisation although it remained cautious. Analysts are forecasting a 7 per cent fall in underlying profit to £145m while turnover is expected to rise thanks to acquisitions made in 2006.

THURSDAY

Drax, the coal-fired electricity generator, is expected to give a view on UK electricity prices when it reports its results. Drax’s shares usually track the UK electricity market very closely so its market capitalisation has slumped along with power prices in recent months. As a consequence, Drax is due to fall out of the FTSE 100 when the index is reshuffled this week. As well as its outlook for the power market, Drax will be updating investors on its various projects to lessen the environmental impact of its power generation. The group is fitting new turbine blades to its boilers to increase their efficiency and reduce carbon emissions. Drax has been championing the burning of biomass – a range of materials from wood chips to elephant grass – in coal-fired power stations to cut the amount of fossil fuels used.

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