Scott Reid: City seeks news on further Santander growth

HIGH street banking giant Santander updates the market on Thursday as the sector's third-quarter earnings season gets into swing.

The Spanish group - an increasing force in UK banking after snapping up a raft of players including Abbey and Alliance & Leicester - will be looked to for further growth after a robust half-year.

It said this year it was on track to open a million accounts for the second year in a row, and posted a 10 per cent rise in pre-tax profits to 875 million for the first six months of the year.

News this month also ensured its rapid expansion plans remained on track as the EC approved its takeover of 300-odd branches belonging to part-nationalised Royal Bank of Scotland. The move also includes about 40 business banking centres.

Santander already has 25 million customers and 1,300 branches following its acquisitions of Abbey, A&L and parts of Bradford & Bingley.

With the UK government's public spending review laid out on the table, outsourcing firm Mouchel will be looking for a boost to business from potential opportunities rising out of the cuts.

The company, which develops roads, schools, water and energy supplies for local councils and government agencies, expects to take advantage of the austerity measures, as more services will be outsourced to the private sector.

But the firm has already warned its profits are likely to be lower than City expectations when it posts full-year results on Thursday, as the uncertainty running up to George Osborne's spending review weakened trade.

The company said profits before exceptional items will be around 30.5 million - lower than market expectations of 35m. Mouchel is in the midst of a restructuring programme, which includes the loss of 2,000 jobs since 2009 and will create a one-off cost of 23m, but should generate 25m worth of savings.

Andy Brown, an analyst at Panmure Gordon, said the outlook for the firm was still good as it had trimmed its debts more than expected to 83.5m and was making progress with the restructuring. He said: "The medium term outlook is solid, supported by UK government cost cutting and outsourcing prospects."

Mouchel's clients include government agencies and councils across the UK, including Milton Keynes, Middlesbrough and Bath & North East Somerset.

Carpetright's second-quarter sales update on Wednesday comes after recent warnings from the group that there was no recovery in sight for consumer spending. First-quarter figures showed UK like-for-like sales dropping 3.4 per cent in the 13 weeks to 31 July, while its stores in Belgium and the Netherlands posted a fall of 4.2 per cent.

It has vowed to keep a tight control on costs in a bid to offset a difficult spending environment. But the firm is not letting the gloom throw its bed stores expansion plans off track. It said last month it still wants to open a further 50 bed stores before the end of this year.

Carpetright, which owns the Sleepright beds chain, will open the stores in its existing Carpetright estate before Christmas.

Analysts also believe that the group is likely to outperform struggling rivals, despite its woes. Numis analyst Andrew Wade expects Carpetright's annual pre-tax profits to edge ahead to 31m, compared with the 29.9m reported earlier this year.

The retailer has 536 stores and 52 concessions across the UK and Ireland under the Carpetright, Storeys and Sleepright brands. It also has 116 outlets in the Netherlands and Belgium.

Forth Ports, the Leith-based ports and property group, is due to update investors on its recent trading via an interim management statement on Friday. In August, the firm came out with all guns blazing, transforming from a takeover target to a company that has rival ports businesses in its sights.

Forth unveiled a "confident" set of half-year results after fighting off a move last May by a consortium of shareholders to take what is the UK's last listed ports business private. Charles Hammond, chief executive, said the board felt "optimistic" about the firm's prospects and that it planned to "grow and acquire other ports businesses".