Reserves restatement debacle

London Evening Standard: Companies reporting next week

“The high oil price should also help the new management at Shell direct attention away from this year’s reserves restatement debacle”

23 July 2004

Posted 25 July 04

HEAVYWEIGHTS Vodafone, BP and Shell step into the spotlight in one of the busiest corporate weeks of the year.

Joining the mobile phone and oil giants in next week’s diary are Europe’s biggest drugmaker GlaxoSmithKline, telecoms group BT and four of the UK’s biggest banks. In all, some 33 companies are due to report results or issue trading updates, representing just over a 50% weighting in the FTSE 100 share index.

On Monday, Vodafone is expected to post strong customer growth when it releases key performance indicators for the first quarter. But as a muted reaction to better-than-expected growth from smaller rival mmO2 this week showed, investors will also want reassurance that industry competition is not stiffening.

BT Group releases its first quarter results on Thursday. It stemmed a revenue decline in the final quarter of last year but still faces increasing competition in its core business.

The backdrop is more positive for BP plc, Britain’s biggest company, which is expected to post bumper second quarter earnings on Tuesday after already saying production in the quarter jumped 17%.

The high oil price should also help the new management at Shell direct attention away from this year’s reserves restatement debacle when it reports on Thursday, a day after smaller rival BG Group.

On the same day, aero engine maker Rolls-Royce updates the market.

The banking reporting season gathers pace with quarterly results from HBOS and Lloyds TSB, Alliance & Leicester and takeover target Abbey National .

On Tuesday, GlaxoSmithKline is expected to report a sharp drop in earnings, hit hard by generic competition in the anti-depressant market and negative currency factors. The company has already warned 2004 will be tough and investors may have to wait until the fourth quarter for a return to earnings growth.

Other blue chips* due to report or offer updates include British American Tobacco, household products firms Unilever and Reckitt Benckiser, media groups Reuters and Pearson, insurers Prudential and Legal & General, and National Grid Transco and four other utilities.

Day by day

• Monday: Aggregate Industries; London Clubs International; Pearson; Reckitt Benckiser.

• Tuesday: Alliance & Leicester; BP plc; British American Tobacco, Cookson; Games Workshop; GlaxoSmithKline; Prudential; Reuters.

• Wednesday: BG Group; Hanson: HBOS; RAC; Unilever; George Wimpey.

• Thursday: Abbey National; Alliance UniChem; BT Group; Centrica; ICI; Legal & General; National Express; Rio Tinto; Royal Dutch/Shell; United Business Media.

• Friday: Exel; Lloyds TSB.

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