UK inflation figures due on Tuesday

Some of the lesser lights of the London market should get their chance in the spotlight this week as no blue-chip companies are scheduled to report figures. However, economic news will be prominent, with inflation figures due on Tuesday.

Express Dairies, which is due to merge with fellow dairy firm Arla, is expected to post increased pre-tax profits, to £28.4m (€40m) from £20.8m (€29.3m) last time, in its full year results tomorrow.

The figures are set to reflect benefits from an upward trend in milk prices due to the weakness of sterling against the euro. The merger offers excellent value for Express shareholders, according to analysts, with considerable near and long-term benefits.

In a statement announcing the merger in March, Express said that while trading conditions were likely to remain challenging for the enlarged group, operating performance should benefit from potential efficiency improvements.

Wine warehouse retailer Majestic should report another successful year tomorrow after seeing strong growth on both sides of the Channel.

Majestic, which reported vintage Christmas trading figures with a surge of 10% in UK like-for-like sales, is expected to post pre-tax profits of around £8m (€11.3m), up from the £6m (€8.5m) seen a year earlier.

The company has more than 100 outlets, including a handful in France, where its acquisition of The Wine and Beer Company in 2001 is continuing to bear fruit. Turnover should improve from £104m (€146.6m) to £120m (€169m).

Rail, environment and nuclear engineering firm AEA Technology, which issues full year results on Thursday, should show it emerged relatively unscathed from the handover from Railtrack to Network Rail.

Analysts expect the good news to benefit AEA’s flagship rail equipment division – maker of rail testing and fault finding equipment – as operating profits in the arm are tipped to rise by £1.7m (€2.4m) to £12m (€16.9m).

AEA’s nuclear activities, which the group is shedding as part of its restructuring, are expected to produce a reduced operating loss, resulting in an expected underlying pre-tax loss for the group of £5.4m (€7.61). Last year, AEA made an underlying pre-tax loss of £9.6m (€13.52m).

Support services firm Parkman, which reports results tomorrow, carries out work on behalf of the Highways Agency and recently secured a deal with Liverpool City Council to handle its professional services projects.

The group has landed a number of other contract wins in the first quarter of this year, taking its total order book to a record £133m (€187.4m), compared with £100m (€141m) at the same time last year.

Potential for outsourcing and consulting in Parkman’s core transport and infrastructure markets continues to be strong, prompting analysts to predict pre-tax profits of £4.6m (€6.5m), compared with £2.1m (€2.95m) last time.

Brewer and pubs owner Belhaven, based in Dunbar, West Lothian, is expected to deliver its seventh consecutive year of growth since floating in 1995 when it reports annual results on Thursday.

With pre-tax profits forecast to rise 17% to £10.6m (€14.93m) and turnover up £8m (€11.3m) at £77m (€108.5m), Belhaven should show it has escaped some of the problems with tough trading faced by other brewers.

The company has around 150 pubs, but also operates a drinks distribution business which makes Belhaven Best and has an agreement with Interbrew to supply Stella Artois and Tennent’s lager to its pubs.

Analysts expect the underlying rate of inflation to rise to its highest level since May 1998 on Tuesday during another busy week for economic announcements.

Much of the slender rise to 3.1% will reflect higher food prices. However, economists will be also looking at the figures given for Chancellor Gordon Brown’s preferred European-style inflation measure. It strips out housing costs and is currently at a more subdued 1.5%.

Clues on the future direction of interest rates will also be gauged on Wednesday when the minutes of the Bank of England’s no change vote on interest rates earlier this month are released.