DCSIMG

Week ahead: Premier Foods sees profits stabilise

  • by MARTIN FLANAGAN
 

THE company results reporting season wheels out some big guns later this week, including Premier Foods and defence giant BAE Systems.

Hovis-owner Premier is expected to have seen underlying profits in 2012 stabilise at between £118 million and £125m against £117m in 2011, when it reports on Thursday.

It made a headline pre-tax loss of £259m in 2011 after a price war that cut its bread division’s profits to £3.4m.

Last November the group said it would close two bakeries and cut 900 jobs as part of plans to overhaul the struggling division.

Broker Credit Suisse said although Premier has been struggling under a debt mountain, following a spending spree which included Mr Kipling-owner RHM, it looks to be on the mend after agreeing a “landmark” £1.4 billion refinancing deal last year.

However, the City was unsettled recently by the abrupt exit of Premier’s chief executive Michael Clarke. Former Cable & Wireless Worldwide boss, Gavin Darby, has been appointed in his place.

Underlying earnings in 2012 at BAE Systems are expected to have fallen to £1.8bn from £2bn in 2011, the last year also seeing the collapse of its planned merger with Franco-German rival, EADS.

No announcement is expected with the results on Thursday on which of BAE’s three remaining shipyards is set to close because of declining orders – Govan and Scotstoun in Scotland, or Portsmouth.

BAE got some lucrative export contracts late last year, including Oman ordering 12 Typhoons and eight Hawk trainer jets, worth £2.5bn including support packages.

Full-year figures on Thursday will show that favourable football results helped bookmaker Ladbrokes end 2012 on a win. The City expects profits to be 10 per cent up at £174m.

Transport giant Go-Ahead also reports the same day after it was hit with a £7m bill to compensate passengers for delays and cancellations on its London Midland franchise at the end of last year. JP Morgan expects £15m of underlying interim earnings at its rail division.

Retailer Sports Direct will say it has benefited from the collapse of JJB Sports when it updates the market. The City forecasts annual profits of £207m, up from £154m.

 

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