AAM resurgence set to bring bumper profits

Fund manager Aberdeen Asset Management, which has undergone a recovery in the past two years following the split-caps affair that badly damaged its share price, announces results for the year to the end of September today. The consensus among City analysts is that Aberdeen will more than triple underlying pre-tax profits, stripping out amortisation and non-recurring items, to 78.9 million from 22.7m the previous year. Revenues are forecast to have leapt to 307m from 156m. The City is expecting the group to announce a dividend of about 4.2p, against 3p last time.

Brian Souter's railways-to-buses group Stagecoach puts out its interim results on Wednesday.

However, the City's main interest is expected to be the details of a major return of capital to investors. The expected range of the cash return is wide - between 200m and 450m. Investment bank UBS believes the figure will be at the lower end of this range, about 275m, because it says Stagecoach will also wish to address its pension deficit and retain some cash for organic growth.

The City consensus is for an underlying pre-tax profit of 73m, up from 72m in the same period last year. Analysts are excluding Stagecoach's London bus operations from that figure, the group having sold that business to Macquarie Bank of Australia earlier this year for 300m.

UBS has forecast a total dividend at the group for the year to April 2007 to rise to 4p, against 3.7p in the previous year.

Also on Wednesday, Royal Bank of Scotland puts out a trading update. Chief executive Sir Fred Goodwin is expected to say that while there has been a slight rise in bad debts, they are still at a very low level compared to the overall loan portfolio. Goodwin is also likely to be questioned on the effect of the slumping dollar on earnings from RBS's American operation, Citizens.

RBS is the sixth biggest bank in the US behind the likes of Bank of America, Citigroup and Wells Fargo. Last year Citizens' profits surged nearly 50 per cent to 1.6 billion.

Supermarket giant Tesco should post another strong quarter of growth when it reports tomorrow. Analysts have pencilled in same-floorspace sales growth of 6 per cent, while new store space should push the total figure up 10 per cent.

William Hobbs, equity analyst at Barclays Wealth, said: "We continue to recommend Tesco as the long-term core holding within the sector, as, in operational terms, it remains the most attractive grocer in the UK."

He said Tesco's launch of a non-food catalogue was unlikely to have a significant impact on profits forecasts until mid-to-late 2007.

First Choice Holidays will be in the spotlight on Thursday when an update on its plans to offload its package holiday arm will generate as much interest as its results.

First Choice is in talks with rival MyTravel over the sale of its mainstream business, which runs 32 aircraft, has more than 300 high street outlets, and is responsible for taking 2.5 million customers on holiday every year.

The City believes profits at the company have largely trod water in the past year at 115.6m, up very slightly from the 115m in the previous year.

BELHAVEN IN THE INTERIM MASH

REGIONAL brewer Greene King is expected to post interim pre-tax profits of about 65 million tomorrow up from 55.8m in the first half last year.

The 200-year-old brewer, which produces Abbot Ale and Old Speckled Hen and has more than 2,000 pubs, has been on the acquisition trail and the results for the first half will include the impact of Belhaven, Ridley, and Hardys & Hansons. The smoking ban drove sales north of the Border down 2.4 per cent between May and July but the company said food was performing better at its pubs.