Jarvis set to unveil reduced profits on contract review by Network Rail chiefs

Scottish broker Brewin Dolphin Securities has cut its annual profits forecasts for support services group Jarvis from 5 million to 1.5m because of a slowdown in new contract wins at the company's rail division during the second trading half to end-March.

However, it would still represent a bounce back into the black from 53m of losses in the previous year at Jarvis, which reports tomorrow.

Investors will be looking for an update on the firm's rail division amid strong indications that the level of work in the industry is now beginning to pick-up, with spending by Network Rail set to accelerate.

Jarvis is one of six firms competing for track renewal work after Network Rail announced it was conducting a six month review of contractors' performances.

York-based Jarvis has battled back from the brink of collapse in 2004, when it became engulfed by debts of more than 230m due to over-ambitious bids for Private Finance Initiative contracts.

Specialist magazine publisher Future puts out its interim results on Wednesday, for which there were no forecasts.

However, Altium Securities analyst Roddy Davidson is forecasting a return to profitability over the full year to end-September, pencilling in a figure of 10.2m.

Difficult trading had seen a loss of 49m last year at Future, as the company was hit by poor performing gaming console titles as gamers waited for the release of new technology systems at the end of 2006.

Strong sales of new consoles from Nintendo, Xbox and PlayStation should have provided a backdrop for a recovery in gaming titles.

The European Commission's recent approval of First Choice Holidays' merger with the tourism arm of TUI will overshadow the UK company's interim results due to be released on Thursday.

The new company - still subject to shareholder approval - will be named TUI Travel and is due to be listed in the UK during October.

The enlarged group will have a market value of around 12 billion and will be responsible for taking around 27 million customers on holiday each year.

Sussex-based First Choice warned in May that soaring fuel costs and the recent doubling of air passenger duty were impacting profits.

It said at the time it was looking to focus on long-haul flights to offset the weaker short haul market.

Because of the seasonal nature of the holiday sector, it is normal for tour operators to post a loss during the first half of the year.

JP Morgan analyst James Ainley expects the company to post pre-tax losses broadly in line with last year's figure of 78.2m.

AEA Technology, which does work for the Scottish Executive, is expected to report an increase in full-year profits to 9.7m on Thursday, up from 8.5m last time.

AEA is a much-changed business after selling a host of operations in order to focus on air pollution monitoring services, particularly doing work for the government. It has jettisoned businesses including its rail division which made equipment to remove leaves from tracks.

The slimmed-down version of AEA - created out of the commercial operations of the UK Atomic Energy Authority - saw orders up 26 per cent at the end of March.

The company has also doubled its work for the EU during the year, with projects covering energy security, energy, environmental best practice and air quality.

The latest inflation figures due out tomorrow are expected to reveal that the cost of living eased back during May after recent interest rate hikes began to bite.

The Consumer Price Index is set to have dropped back from last month's 2.8 per cent following a fall in utility prices and a slowdown in food price inflation.

Investec economist Philip Shaw is forecasting CPI inflation of 2.5 per cent, a sharp drop from the 3.1 per cent high seen in March when the Bank of England Governor, Mervyn King, was forced to write the first explanatory letter to the Chancellor.

Poor weather in May is also expected to have contained rises in clothing and footwear prices. This was reinforced by the latest figures from the British Retail Consortium which showed that retail sales grew at their slowest rate since November during May as shoppers remained cautious amid rising rates.