The week ahead: Market set to welcome Direct Line

By GARETH MACKIE
Published on 08/10/2012 00:00

London will witness its largest flotation since Standard Life made its market debut in 2006 when shares in Direct Line begin trading this week.

Stockbrokers have reported strong demand for shares in the insurance giant, which is being floated off by Royal Bank of Scotland as a condition of the £45 billion bailout it received in 2009.

Conditional trading in Direct Line shares, priced at between 160p and 195p, will begin on Thursday – giving the owner of Churchill and Green Flag a mid-point valuation of £2.66bn.

Thursday will also bring full-year results from WH Smith. Sales across its 600 high street stores are expected to have been lifted by racy best-seller Fifty Shades of Grey. Analysts are forecasting a rise in profits of almost 8 per cent to £100 million for the year to 31 August.

A third-quarter trading update from Greggs is expected to show that the sales decline at the bakery chain has slowed, after record rainfall in the three months to 30 June kept shoppers away and like-for-like sales fell 3.5 per cent in the period. Shore Capital analysts have pencilled in a 1.5 per cent dip in sales for the second half, with growth returning next year if the wider economy recovers.

Recruitment firm Michael Page – which saw its first-half profits fall by more than a third following a slump in UK banking activity – is due to deliver a third-quarter trading statement today. Rival Hays, which said conditions in the UK had become “increasingly challenging” last year, updates the market on its first-quarter performance tomorrow.