The Week Ahead: Winning brew from Whitbread

LEISURE group Whitbread is expected to reveal another steaming performance at Costa on Thursday amid increased speculation the coffee house will be spun off.

Costa, which has nearly 1,400 outlets in the UK, has consistently been the top performer in the group’s portfolio, which includes hotel chain Premier Inn and restaurants Beefeater and Brewers Fayre.

Investment bank Morgan Stanley has estimated the Costa chain could be worth £1.5 billion and help lift Whitbread’s share price.

Whitbread is forecast to unveil a 15 per cent increase in underlying pre-tax profits to £314.2 million, as revenues at Premier Inn rise around 9 per cent and its restaurant arm sees a 1.9 per cent increase in total sales.

Drugs giant GlaxoSmith-Kline is set to reveal a return to sales growth in the first three months of the year, despite pressure on over-the-counter drugs such as Panadol and Gaviscon, and consumer brands like Lucozade, Ribena and Horlicks from the tough economic climate.

The firm is expected to reveal a 2 per cent rise in first-quarter revenues to £6.7bn as new drugs to the market help lift performance.

Investors will be looking for more detail on Glaxo’s proposed bid for US-based Human Genome Sciences after a £1.6bn offer was rejected.

Sports Direct International is set to turn up the heat on rival JJB Sports as it looks to grab a bigger slice of the market ahead of the Olympics.

The chain is expected to reveal on Wednesday that its strong performance has continued in the first quarter of 2012, leaving executive deputy chairman and Newcastle United owner Mike Ashley on track for a £17m pay-out.

Jonathan Pritchard, an analyst at Oriel Securities, expects the group to compete even more aggressively on price in the run-up to the Olympics.