The Week Ahead: Wardrobes empty of profits as worn-out retailers see the City

Retailers have had much to complain about lately, given a slowdown in consumer spending, falling prices and intense competition. But the outlook was brightened a little last month when the Bank of England cut interest rates. This week a number of the UK's largest retailers will release results and analysts will seek signs that conditions are improving.

The UK's third-biggest clothing retailer, Next, is among those reporting and analysts expect profits to be flat. There will be interest in how the company's profit margins are holding up, and comments on the trading outlook from chief executive Simon Wolfson.

In its most recent update in May, the company revealed that like-for-like sales had fallen 6.3 per cent. Despite the tough conditions in the sector, Next is looking to expand and plans to add 800,000 square feet of store space this year.

One of the sector's better performers has been discount retailer Primark. Its owner, Associated British Foods, is delivering a trading update tomorrow and investors will be interested in how Primark - which recently bought the Littlewoods chain - is faring.

While Next and ABF are expanding, the world's third- largest home improvement retailer, Kingfisher, revealed plans last week to cut 400 jobs at the headquarters of its B&Q unit.

Analysts think the outlook for Kingfisher remains poor and net profit is expected to fall by about a quarter. But its shares were boosted recently when American investment guru Warren Buffett increased his stake in the company. There has also been speculation that US giant Home Depot is interested in making a bid.

At fashion chain French Connection the news is also expected to be glum when it delivers its interim results. In a market update in July the company forecast a slump in profits and sales due to weak high- street conditions.

While it has been hard to sell clothes, Caffè Nero has had less problems selling coffee. The chain is the fastest growing in the UK coffee market and investors will hope that trend continues when it releases its results.

Away from retailing, it's a busy week in the financial sector with the UK's fourth-largest fund manager, F&C Asset Management, set to release its first-half results tomorrow. In late July, it said its assets under management had gained in value as stock markets advanced.

F&C's majority shareholder, Friends Provident, is also reporting. Sales of its life insurance and pensions rose 33 per cent in the first half, it said in July, as the company received a boost from recent acquisitions. Investors will be looking for signs that margins at its UK business have improved.

Meanwhile, at Provident Financial, analysts expect a drop in profits due to a collapse in the second-hand car market.

There will also be interest in the results of PricewaterhouseCoopers, the UK's biggest accountancy firm and auditor to most of the FTSE 100. PwC is set to report a return to double-digit growth when it posts its annual results on Tuesday, ending a two-year run of poor performance. Deloitte, its closest rival, could manage only single- figure growth of 8.8 per cent when it reported last month.

It is also an interesting week for economists, who will keep a keen eye on the UK inflation figures for August, which are released on Tuesday. Investec economist David Page expects the consumer price index to increase to an annual rate of 2.4 per cent due to higher energy prices. There will also be interest in the unemployment figures, and another batch of retail sales data.

While higher energy prices are bad for the economy, they should be good for Premier Oil, which is releasing its results. There will be investor interest in how its drilling programme is progressing. Oil services group John Wood is also reporting and its most recent trading update showed that its business was growing.

Meanwhile, the UK's largest gas distributor, Centrica, reports this week. It pre-empted the release last Friday with news that 2005 earnings would be at the lower end of estimates because of rising gas and power prices.

It's another busy week in the housing industry with Bovis and Redrow releasing their results. Conditions have been tough in the sector due to weaker UK demand, although analysts say Redrow appears better placed.

CALENDAR

Tomorrow 12

UK: Results: (final) Aero Inventory; (interim) Bovis Homes, Catlin, EG Solutions, Enterprise, F&C Asset Management, Forth Ports, Group 4, Hiscox, Interserve, Johnson Service, Just Car Clinics, Metal-Tech, Regus, Roxboro, Whatman; (third quarter) Cambridge Antibodies.

Tuesday 13

UK: Results: (F) Allergy Therapeutics, Cornwell Management, Glisten, Macro 4, Redrow, System C; (I) Antofagasta, Chime, Cobham, French Connection, Friends Provident, John Wood, Kiln, Laird, Mayborn, Office2office, Property Recycling.

Wednesday 14

UK: Results: ((F) Caffe Nero; (I) Genetix, Incisive Media, Provident Financial, SDL, SIG, Xaar.

Thursday 15

UK: Results: (F) Kier; (I) Abbot, Aggreko, Armor Group, Brandon Hire, Centrica, CODASciSys, Dignity, Foseco, Heywood Williams, Kingfisher, M&C Saatchi, Microgen, nCipher, Next, Omega International, Premier Oil, Prostrakan, RPS, Ukrproduct, Unite, Wilmington.

Friday 16

UK: Results: (F) Isotron, Vebnet; (I) Advent Capital, Biocompatibles, Moneybox, Profile Media, SVB.