The British giants are in rude health; WAVE OF UPBEAT COMPANY REPORTS IS CLUE TO LONG-TERM RECOVERY
0 Comments | Mail on Sunday (London, England), The, July 25, 2010
Byline: TOM McGHIE and JON REES
BRITAIN’S most powerful companies, representing more than 12 per cent of the FTSE 100 by market value and all with ‘British’ in their names, report this week, giving a vital clue to the economic health of the nation.
While BP has been forced to stop paying dividends and is facing huge clean-up costs, most of the British companies reporting are in rude health and paying dividends to shareholders.
British Gas PARENT Centrica will report that profits from its residential business doubled for the first half of the year as shivering households turned up the heating in the coldest winter for 30 years.
Centrica expects operating profits of [pounds sterling]583 million from British Gas for the first six months of 2010 – up from [pounds sterling]299 million for the same period for 2009 – with its business division forecast to double profits to [pounds sterling]132 million. Operating profits will be helped by British Gas gaining 400,000 over the past 12 months, half in the past six months, taking its customer base close to 16 million.
British Airways THE carrier will unveil the full impact of a horrendous first quarter ending June 30, which saw BA hit by volcanic disruption and the first wave of industrial action by cabin crew. Losses are expected to soar from [pounds sterling]148 million to [pounds sterling]294 million.
Though the dispute has not been settled, investors will be impressed that for the first time for more than a year there are growing signs that business passengers are returning.
BSkyB THE satellite broadcaster has had a good recession and full-year results for the year to the end of June are expected to show profits up by 16 per cent to [pounds sterling]740 million.
BSkyB has proved resilient in the downturn as viewers stayed loyal to television, cutting back elsewhere.
The company received an approach in June from News Corporation, chaired by Rupert Murdoch, to buy the balance of BSkyB. News Corp already owns 39 per cent of BSkyB and offered 700p a share for the company, valuing it at [pounds sterling]12.25 billion, while BSkyB said an offer of 800p a share would be acceptable. The two are working on gaining clearance from regulatory bodies.
This summer’s football World Cup is likely to have boosted uptake of BSkyB’s High Definition offer, with investment bank Numis expecting net customer growth of 417,000.
BSkyB had 9.8 million customers in April, each paying [pounds sterling]506 on average, Numis reckons. About 2.5 million are signed up to the dearer Sky HD package, of which 1.5 million had been added over the year.
BT THE telecoms giant posted a [pounds sterling]1 billion profit for the year to the end of March compared with a [pounds sterling]244 million loss previously as it recovered from a series of profits warnings at its Global Services division.
A first-quarter trading statement for the three months to the end of June is expected to report revenue of [pounds sterling]4.9 billion, down slightly from last year, with profits expected to be up a shade at [pounds sterling]338 million.
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