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FINANCIAL TIMES: UK market share gains to bolster Imperial growth: “Shell… is unlikely to provide positive news on production, and could suffer from its greater reliance on production-sharing deals with countries such as Nigeria, Malaysia and the UAE.” ( 25 April 05


*It should be a case of steady progress at Imperial Tobacco Group's half-year results this week. The UK is expected to see market share gains driven by strong performances from value brand Richmond and Lambert & Butler, but operating profit growth could show signs of slowing. In Germany, market volume declines are set to continue, but Imperial should show solid results, as it sees the benefit of new value brands and takes advantage of the growth in the make-your-own cigarette market. Price increases should also have offset some of the pain of market declines. Underlying half-year profits are expected to be between £490m and £510m, up from £454m last year, helped by productivity savings and factory closures. Turnover is forecast to be about £1.5bn (£1.47bn).


*Whitbread, which recently said it would sell its UK Marriott hotels, reports full-year results this week with analysts expecting a rise in pre-tax profits before exceptionals and after goodwill. The consensus forecast is for pre-tax profits of £268.3m, up from £240.8m last time. Earnings per share are also set to rise, with analysts looking for 64.1p, up from 58.23p last time.


*Expect more bumper profits from BP and Royal Dutch/Shell when they report first-quarter earnings this week, with oil prices stuck firmly above $50 a barrel. But Neil McMahon, analyst at Sanford Bernstein, says both could see slight quarter-on-quarter profit declines because of a weaker performance in downstream refining businesses as they invest to meet new US emissions standards. BP will look to ease worries about its Russian venture related to tax demands, production growth and access to new fields. It will point instead to new projects coming on stream in OECD regions such as the Mad Dog and Thunder Horse fields in the high-margin Gulf of Mexico. Shell, which follows on Thursday, is unlikely to provide positive news on production, and could suffer from its greater reliance on production-sharing deals with countries such as Nigeria, Malaysia and the UAE. These deals are more heavily taxed and account for fewer barrels of production in a high oil price environment. It is the first quarter of results under new IFRS rules, although the impact on earnings for both BP and Shell is expected to be minimal. Consensus earnings for BP are in the $4.1bn-$5.1bn (£2.1bn-£2.7bn) range and $4.2bn-$5.1bn for Shell.


*When Westbury, the housebuilder, reports full-year figures, investors will be keen to glean any signs of a slowdown in the UK housing market in any remarks made about current trading conditions. The company is expected to unveil a solid advance in top line performance, as consensus analysts' forecasts point to profits of £126.4m for the year to end of February, compared with pre-tax profits of £106.6m on turnover of £879m in the previous year. But in a trading statement last month, Westbury gave a sober indication of a general softening in housing demand. Shares in the company slipped as it said it had sold 4,361 homes in the 12 months to the end of February, compared with analysts' forecasts of 4,500 and last year's 4,461. However, it added the average price had risen slightly to £194,000.




* Rising costs and a more cautious consumer are taking their toll on retailers up and down the high street, and this week it will be the turn of The Body Shop to reveal its level of fitness. In January, the ethical beauty retailer reported better sales and margins and said full-year figures would be "slightly ahead of expectations", leading Richard Ratner, analyst at broker Seymour Pierce, to add £800,000 to his pre-tax profits forecast, taking it to £36m. But the key is whether the company has since managed to keep underlying sales in the UK on an accelerating trend - they rose 3 per cent in the 10-week sales period over Christmas, but fell 1 per cent in the year to January 1. Staying in the UK, analysts will also be looking for news on how the new store format has been performing and the company had said it may give an update this year on its plans for reintroducing internet sales.


*Drug majors AstraZeneca and GlaxoSmithKline both unveil first-quarter results this week. But beyond the figures, investors in AstraZeneca will be keen for news updates on the company's progress in tackling the safety concerns which surround its anti-cholesterol drugs Crestor. At GSK, meanwhile, attention will be focused on more general signs of progress in the company's overall drug pipeline and resolution of its manufacturing problems in Puerto Rico.


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