HMV struggle to make voice heard in market

A trading update from BP and the price of Standard Life shares should add some spice to a quiet few days for corporate results this coming week.

A trading update from BP and the price of Standard Life shares should add some spice to a quiet few days for corporate results this coming week.

Shares in music store and Waterstone's owner HMV have been battered by "remorselessly tough trading", according to Jeremy Batstone, an analyst at broker Charles Stanley.

A recent trading update showed like-for-like sales were down 5.6% at Waterstone's and 11.4% at HMV in the final 16 weeks of the financial year, so any improvement will be welcomed by the markets when the company posts its full year results on Tuesday.

Charles Stanley forecasts pre-tax profits to fall from £129m to £100.8m for the 12 months to April 30.

There will also be interest in HMV's plans for struggling bookshop Ottakar's, which it agreed to buy for almost £63m in May - significantly lower than last year's £96.4m offer which was thwarted by a competition inquiry.

HMV hopes Ottakar's will give it additional scale to claw back some of the book market lost to online operators such as Amazon and supermarkets such as Tesco. Shares in HMV have fallen from 255.5p in September to around 170p.

Oil giant BP will update the market today with its second quarter trading statement, and analysts will be looking for news on production levels and profits margins.

Paul Singer, of Barclays Stockbrokers, said production in the second quarter could be higher than in the first, when the average hit four million barrels a day, as BP recovers output lost through last summer's vicious hurricane season in the Gulf of Mexico. Mr Singer said he expected production for the whole year to be around 4.1 million to 4.2 million barrels of oil a day, compared with just over four million last year. The update comes ahead of BP's half year results, which are out on July 25 and according to Mr Singer "should be strong".

Keith Bowman, of Hargreaves Lansdown Stockbrokers, said there will also be interest in BP's plans for Russia where recent moves by the Kremlin "are seen as potentially making life more difficult for the group".

Three major acquisitions in less than a year should ensure that annual results from pubs group Greene King will attract more attention than usual tomorrow.

While profits are forecast to rise to at least £117m from £95.7m, analysts will be interested in progress in integrating Scottish brewer Belhaven and Essex-based TD Ridley - both acquired last year.

Standard Life will put a price tag on its shares on Friday as Europe's biggest mutual insurer prepares for its flotation the following Monday.

The company lowered the expected price range for the shares last week, but a recent rally for the stock market may ensure that the company is valued towards the top end of those revised expectations.

Based on a range of 210p to 270p a share, Standard will be valued at between £4.35bn and £5.25bn - still big enough for a place in the FTSE 100 Index.

The average windfall payment for members is likely to be around £1,500, down from the £1,700 previously highlighted when the group announced plans to float in April.

Around 2.4 million members are eligible for windfall shares.


David Whetstone
Culture Editor
Graeme Whitfield
Business Editor
Mark Douglas
Newcastle United Editor
Stuart Rayner
Sports Writer