The Week Ahead: Updates due from Whitbread, Debenhams, Home Retail Group and Premier Foods

Mr Kipling parent Premier Foods will reveal on Tuesday how it fared in recent trading after a first half that was boosted by its “Great British Fancies” campaign for the Queen’s Diamond Jubilee.

The St Albans-based group saw a 2% rise in interim sales of its eight frontline brands thanks in part to the launch of a patriotic range of Mr Kipling cakes and a major advertising push.

Its main brands - which also include Hovis bread, Bisto, Ambrosia and Loyd Grossman sauces - delivered a 3.2% rise in half-year trading profits to �53.2 million.

But the market will be keen for news on whether the summer of celebration surrounding the Olympics maintained strong sales in the group’s third quarter update.

Attention has recently focused on its restructuring efforts as it battles to reduce a debt pile that stood at �1.3 billion in June.

It announced a �200 million deal to sell its sweet spreads and jellies business to US firm Hain Celestial in August, offloading well-known breakfast table brands including Robertson’s marmalade, Hartley’s jam and Gales honey.

The sale forms part of a plan to raise cash to pay down debts and also to simplify the business on its eight-strong portfolio of core brands.

It also revealed earlier this month that it is separating its hard-hit bread business into a different division with aims to revive it.

The Hovis bread division suffered a difficult first half, with total sales down by 3.6% to �348.3 million.

Analysts at Investec praised the move to separate it as “radical thinking”, adding: “Premier appear to be acknowledging that bread is a fundamentally challenged business that needs dedicated focus.”

Investec expects a �30 million rise in pre-tax profits for this year to �88 million, but warned the second half could be hampered by rising wheat costs.

Leisure group Whitbread will reveal a jump in half-year profits on Tuesday as its Costa and Premier Inn businesses continue to deliver market-beating performances.

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

Parent group Whitbread is expected to reveal a 10% leap in pre-tax profits in the six months to August 16 of �191 million, on a 14% rise in revenues to �1 billion.

The rise in profits will come off strong like-for-like sales at Costa, up 7.1% in the period, and Premier Inn, up 4%. Shares in Whitbread are 40% higher than they were at the start of the trading period.

Geof Collyer, research analyst at Deutsche Bank, said: “We remain positive for the longer term, but think that the group needs to give out some strong current trading messages in hotels and restaurants for the shares to kick on from here.”

Whitbread financial director Chris Rogers was recently unveiled as managing director at Costa, in a move which fuelled speculation that a demerger was on its way.

Investors will be looking for any hints or comment on the rumoured plans after investment bank Morgan Stanley said a “Costa demerger would make sense” - estimating that the chain could be worth �1.5 billion and help lift Whitbread’s share price.

Like Costa, Premier Inn is in the midst of an aggressive expansion plan. It hopes to add 10,000 new rooms after creating more than 3,500 this year, bringing its total to more than 47,000.

Premier has benefited from customers looking for cheap deals and an advertising campaign featuring comedian Lenny Henry, but sales have slowed in recent months and its restaurant division has also come under pressure as food and fuel costs rise.

Home Retail Group has cheered investors in recent months with a return to sales growth at catalogue chain Argos as demand for iPads and Kindles has offset declining interest in video games and MP3 players.

Shares in Home Retail Group have jumped more than 50% since August as the group surprised the markets with its improving performance.

But the firm will need to convince investors that its recovery is still on track as it is expected to reveal a near 60% slide in pre-tax profits to �12.2 million in the 26 weeks to September 1.

The continued improvement in consumer electronics resulted in like-for-like sales growth of 1.4% in the 13 weeks to September 1, following a 0.2% drop in the first quarter. This gave sales growth of 0.6% for the first half of the year.

However, same-store sales at Home Retail’s Homebase chain continued to fall in the second quarter, by 3.7%, as weather dampened demand for seasonal products, although the figure was better than the 8.3% decline in the previous three-month period.

Argos, which has some 750 stores, is looking to recover from months of dire trading, which prompted Home Retail to axe its dividend pay-out.

Argos launched its autumn/winter range on July 21, with more than 43,000 products online and 9,000 new products in its 78th catalogue. The range features gym gear endorsed by gold-medal winning GB athlete Jessica Ennis.

A strong set of interim results on Wednesday will reduce some of the pressure on the chain to close stores amid a review being carried out by strategy consultants OC&C to help new managing director John Walden assess the Argos business.

Home Retail plans to close 10 stores this year, but continues to resist calls for widespread closures, claiming that they support its presence online and that only seven were loss-making.

Department store Debenhams reports full year results on Thursday after a resurgent performance in recent months.

The group ended its year on a high, reporting a 3.7% hike in like-for-like sales excluding VAT in the 10 weeks to September 1.

Online sales were particularly strong, up 40%, and it grew its share of the under-pressure womenswear market.

The group is thought to have benefited from a store modernisation programme, its Life Made Fabulous TV advertising campaign and overseas expansion.

But Matthew Taylor, analyst at Numis Securities, said annual pre-tax profits are expected to remain largely flat at �158 million against �157.7 million a year earlier as lower profit margins offset the rise in sales.

Its margins are being hit by aggressive discounting, while Mr Taylor added profits were being held back as it sells more health and beauty products and third party brands on its website.

Debenhams, which has 164 stores in the UK and Ireland and its Magasin du Nord chain in Denmark, has seen shares rise more than 80% in the past year as the group rolled out its turnaround plan.

This has included focusing on its exclusive Designers at Debenhams ranges, with collections by John Rocha, Henry Holland and recent new addition Marios Schwab.

The group has also been focussing on its online growth and recently launched its first foreign language website, in Germany.

AstraZeneca’s new chief executive Pascal Soriot will unveil his first set of figures when the drugs giant updates on Thursday.

Mr Soriot started at the beginning of October, replacing David Brennan, who quit after a shareholder rebellion over pay and performance earlier this year.

While he is expected to take a back seat at the third quarter update, the former Roche pharmaceuticals boss has already started to make his mark at the group ahead of announcing his strategy plans in the new year.

He suspended its share buy-back programme and announced his first major deal, buying the rights to experimental kidney drugs for up to 272.5 million US dollars (�169 million).

But he joins at a difficult time for Astra, which has been suffering from plunging sales and profits as competition from cheaper generic drugs and challenging market conditions take their toll.

The group’s half-year profits slumped by a quarter after a 16% slide in sales in the six months to June 30.

There was some recent welcome cheer from the embattled group after it said a multimillion pound marketing rights deal would boost full-year figures.

Astra lifted full-year earnings targets in August after selling marketing rights for its heartburn pill Nexium to US rival Pfizer.

It will receive 250 million US dollars (�154.8 million) upfront after giving Pfizer exclusive global marketing rights for the over-the-counter version of the medicine and will also be eligible to get milestone and royalty payments.

Online retailer ASOS will unveil results on Thursday following its recent coup in appointing two major names to its board.

The group confirmed this month that former M&S director Kate Bostock - described as one of the most influential women in British fashion - will join as executive director for product and trading from January.

The news came just a week after it named former Amazon UK boss Brian McBride as its new chairman.

The appointments highlight the success of ASOS and how seriously it is now taken in the City and fashion world.

Since launch in 2000, it has notched up more than five million active customers and annual sales of around �500 million.

The group’s figures on Thursday are expected to confirm that ASOS - which stands for As Seen On Screen - has held its own in a fiercely competitive market.

UK sales jumped 15% in the quarter to August 31 as it continued to cash in on the popularity of internet shopping and the interest of celebrity-obsessed twenty-somethings in clothes worn by the stars.

Matthew Taylor, analyst at Numis Securities, is expecting the group to report a 39% leap in pre-tax profits to �44 million for the year to August, although the results will be pro forma as ASOS recently changed its year-end from March.

He said it will mark a “further chapter in ASOS’s remarkable story”.

Panmure Gordon analyst Jean Roche is expecting a near-41% surge in profits to �44.6 million.

While UK sales have weathered tough retail conditions well, ASOS has also seen good growth in its international markets such as the United States, where sales grew 65% in the quarter to August 31.

Mr Taylor said ASOS was edging ever closer to its aim of becoming “the world’s number one online fashion destination for twenty-somethings”.