Markets: Brokers expect strong Stagecoach performance

TRANSPORT group Stagecoach is expected to post "strong" full-year results on Wednesday after a trading update revealed that its bus and rail businesses were firing on all cylinders.

Perth-based Stagecoach, led by recently knighted chief executive Brian Souter, reported progress in all four of its divisions in the first 11 months of the financial year.

Its UK rail division - which owns South West Trains - and Virgin Rail, its joint venture that runs the West Coast main line, have both seen good sales growth, while its US bus business is also on the up.

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The group's UK bus business posted the slowest growth among its division but still reported a 2 per cent rise in sales.

Fuel prices will be a concern, but broker Morgan Stanley recently rated Stagecoach as its "top pick" within the sector, adding it expects a further nine-month extension to the West Coast main line rail franchise, until the end of 2012, while there is a possibility of it picking up another franchise, such as Greater Anglia, where it has been short-listed.

Broker forecasts are for underlying profits of about 207 million up from 161m.

Fellow Scottish stock Goals Soccer Centres will also update the market this week, with analysts expecting Friday's interim results to reveal like-for-like sales growth.

Douglas Jack, an analyst at Numis, is forecasting sales growth of 1 per cent, taking into account a 2.5 per cent hit from Goals starting to pay VAT and comparisons with a weak first half last year, which had been hit by snow.

Jack suggests Goals has enough cash to roll out five centres each year from 2012 onwards, compared with the planned four a year at the moment.

Floor coverings specialist Carpetright has found itself at the forefront of the economic storm currently battering the UK's retail sector.

The group has issued three profit warnings over the past 12 months and said in April that its full year profits, which are due to be released on Tuesday, would be just below the 17m it made in 2009.

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The firm added it was absorbing rises in the wholesale prices it is paying, rather than passing them on to customers, but even then same-store sales fell by 6.3 per cent in the UK and Ireland over the 11 weeks to 15 April.Recent government data suggests little change in the mood of the consumer since April, with latest retail sales figures showing a sharp decline after a boost around Easter and the royal wedding.

Carpetright's fortunes are also tied closely to activity in the housing market, which has been subdued this year.

The group has moved into new markets, with 230 shops now selling beds for instance, to try to widen its sources of income, while also cutting its cost base through job cuts and store closures as leases expire.

Carpetright, which has about 560 outlets in UK and Ireland and a further 120 in the Netherlands and Belgium, has also said it will look to expand further in northern Europe if good opportunities arise.

John Stevenson, an analyst at broker Peel Hunt, says Carpetright needs a recovery in housing activity for UK trading and underlying profits to improve and he expects trading to remain subdued until that happens.

He is predicting adjusted profits of 16.3m and sales of 493m for the year just ended and little change in the year to the end of April 2012.

Investors in gambling firm Betfair have had little reason to smile since the firm floated in October.

The share price has fallen by more than 40 per cent from its listing price of 1,300p after the firm was hit by a run of bad news and slowing growth.

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Analysts are not expecting much in the way of an improvement with the full year figures on Wednesday. House broker Morgan Stanley suggests pre-tax profits could fall to about 16m from 18m after a 12 per cent first half drop to 6.8m after costs associated with its listing were deducted.x

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