Market Watch: Ailing Mothercare tipped to reveal slump in profits

THE differences between the booming telecoms market and the ailing high street will be laid bare this week when Vodafone and Mothercare reveal full-year results.

Whereas Mothercare has issued two profit warnings in the past 12 months, mobile phone giant Vodafone has had to upgrade expectations twice, with the latest increase suggesting earnings could top 12 billion.

Vodafone's results on Tuesday are expected to show growth in the emerging markets of South Africa, Turkey and India offset sluggish figures in Europe, especially the struggling southern countries.

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Data demand will be keenly watched as the growth in smartphones, such as Apple's iPhone and new Android-based handsets, has exploded over recent months. That is expected to be a major plus for Vodafone as the quality of the network becomes more important and eases pressure on prices.

Consensus forecasts are for revenues for the year to March 2011 to rise by 2 per cent to 45.5bn.

Struggling Mothercare is expected to reveal a slump in profits on Wednesday, amid speculation it is planning to increase the rate of store closures.

The retailer, which has 377 stores in the UK and Ireland, was particularly badly affected by the snow in December, which stopped customers driving to its bigger out-of-town stores. Sales of toys in the run-up to Christmas were badly affected.

Analysts expect operating profits to fall 13 per cent to 29.7m after like-for-like sales for the year to 26 March were down 4 per cent.

While its UK business is suffering, overseas sales are booming, led by 47 per cent growth in India, China and Australia. Takings at its international arm exceeded the retailer's sales on the UK high street last year.

Britain's second largest pubs firm, Enterprise Inns, is expected to report a drop in profits at the half-year stage on Tuesday, although the Easter holiday and Royal Wedding, which landed in its second half, are likely to keep the outlook positive.

Analysts have forecast pre-tax profits of 70m for the six months to March, down on 86m last year.

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Douglas Jack, an analyst at brokerage Numis, said evidence of earnings stabilising in the interim results was likely to support share performance on the day.

Booming international sales of Magners cider are expected to help Irish drinks group C&C meet profit forecasts on Wednesday.

There is speculation that C&C's former Scottish & Newcastle management, John Dunsmore and Sir Brian Stewart, could use spare cash in the company to accelerate the expansion into the US.

Analyst Barry Gallagher, at Davy, has forecast underlying profits of 104m (91m) in the year to 28 February, and said he expects this year's trading to have started well.