City looks for higher Havelock sales and Melrose Egypt update

TWO smaller Scottish plcs report their year-end numbers tomorrow.

Havelock Europa, the Dalgety Bay-based school and retail outfitter, is expected to report relatively flat full-year profits of about 5.8 million on sales of 112.3m, up from 100.2m a year earlier.

In February, the company, which is headed by chief executive Hew Balfour, increased its presence in the primary school market by snapping up Leicestershire-based Stage Systems for just under 3.5m.

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Analysts welcomed the deal, which is expected to be earning-enhancing in the current financial year.

Susan Gordon of Charles Stanley Securities noted that the retail interiors sector was still buoyant, although there was potential for a downturn.

Edinburgh-based oil and gas explorer Melrose Resources is likely to update investors on progress at its Egyptian fields, after a series of successful drillings and oil reserve upgrades announced at the tail end of 2006.

In the past year, Melrose's share price has ranged from 310p to 458.5p. Keith Morris, an oil analyst at Evolution, has rated the stock as a "buy".

Last month, chairman Robert Adair raised his stake in the oil firm to 51.8 per cent by buying nearly 14m of shares.

Profits of about 15m have been pencilled in by the City.

A shortened trading week because of the Easter break will see Halfords and Mothercare publish updates, while publisher Bloomsbury will look to restore confidence after its profits warning in December.

Car and bicycle retailer Halfords is set to confirm that trading has remained strong when it gives a pre-close update tomorrow. Analysts at Seymour Pierce suggest there is an "outside chance" that a suitor could crop up to make an approach for Halfords, but even without any potential bid, the group's shares are marked an "outperform". It reported pre-tax profits of 43.5m in the six months to 29 September after a 9.3 per cent rise in sales to 369.2m.

The group, bought by CVC Capital Partners from Boots five years ago, has seen its share price rise since last summer, hitting a peak of 390p earlier this year.

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Mothercare is set to update the market on its fourth quarter trading performance on Wednesday, while investors will also be looking for further news on the proposed 85m acquisition of Early Learning Centre-owner Chelsea Stores.

It has been a tough year for Harry Potter publisher Bloomsbury, resulting in a substantial profit warning in December and a subsequent marked reduction in analysts' forecasts for the period.

The company warned at the time that lower-than-expected pre-Christmas sales combined with delays in reference rights sales budgeted for 2006 would see profits before tax for the year fall to about 5m, down from underlying profits of 20m in 2005, when performance was boosted by record-breaking sales of Harry Potter and the Half Blood Prince.

Mortgage bank Northern Rock is due today to update the market on its performance so far this year.


THIS week's economics news will be dominated by interest rates on both sides of the Atlantic.

In London, the Bank of England is widely expected to keep rates on hold at 5.25 per cent. Even so, investors will be on tenterhooks, as the two previous hikes, in January and August, came as shocks.

In the US, attention will be on the latest employment data, which will influence investors' views on how soon an expected cut in US rates will come and how quickly wider policy could be affected.