City hoping to hear news from BAE on shipyards

DEFENCE giant BAE Systems is the biggest company reporting results this week, but the City spotlight will also fall on two struggling businesses, telecoms group Cable & Wireless Worldwide and chocolatier Thorntons.

BAE Systems will face questions on Thursday over the threat of closure of either its Clydeside or Portsmouth shipyards and the failure of its Eurofighter consortium to land a large contract to supply fighter jets to India.

The group, which is one of the UK’s biggest manufacturing employers, is expected to report a 10 per cent fall in underlying earnings in 2011 to £2 billion as defence spending in the UK and the United States comes under pressure.

Revenues are set to be down by about £2bn, analysts say, due to falling orders from the US Army after it pulled out of Iraq and a delay in an order for Eurofighters for Saudi Arabia.

BAE recently put its warship business under review, a move seen as threatening thousands of jobs. Last year the firm signalled the end of production at its factory in Brough, Yorkshire, which employed 1,300 people, as part of a round of 3,000 redundancies in the UK.

BAE was recently hit by the news that the Eurofighter consortium is likely to lose its battle with French rival Dassault for a lucrative contract to provide fighter planes to India.

Chocolate-maker Thorntons puts out interim figures on Wednesday and the City is looking for how well it did in the run‑up to Valentine’s Day tomorrow.

Thorntons recently warned it will only break even in the year to June, compared with £4.3 million profit the previous year. It has had to drop prices to stave off competition from the supermarkets.

The group, which has a 7.7 per cent share of the UK chocolate market, has already revealed that like-for-like sales fell by 4.2 per cent in its second trading quarter.

Domino’s Pizza will roll out more strong annual profits on Wednesday. The group grew sales 9.4 per cent to £530.6m in 2011 as it opened more than 60 new sites.

Online sales grew 43 per cent and now account for nearly half its orders. Douglas Jack, an analyst at Numis Securities, expects Domino’s to post profits up 10.5 per cent to £42m for 2011.

A new batch of gaming machines and the increasing popularity of online gambling is expected to boost annual profits at Ladbrokes.

The group has said that winnings from gaming machines rose 20.4 per cent to an average per week of £866 in the three months to end September. But despite an expected improvement in the final quarter, on Thursday Ladbrokes is set to report a 21.5 per cent fall in annual profits to £152.3m against strong comparatives the previous year when the football World Cup boosted revenues.

The new boss of Cable & Wireless Worldwide, Gavin Darby, will reveal his strategy for turning the ailing telecoms firm around in a trading update on Thursday.

C&WW, which provides high-speed telecoms services to corporates and the police, has issued three profit warnings in a year as it is hit by government spending cuts and the weak economy.

The Office for National Statistics is expected to say tomorrow that the annual rate of inflation fell to 3.6 per cent last month from 4.2 per cent in December, partly due to the January 2011 VAT rise falling out of the annual comparison.