Newspaper article The Journal (Newcastle, England)

Russian Sales Set to Bolster S&N Results

Newspaper article The Journal (Newcastle, England)

Russian Sales Set to Bolster S&N Results

Article excerpt

Byline: By Graeme Evans

Some of the biggest names in UK industry will come to the market this week during a busy few days for corporate results.

* Britain's biggest brewer Scottish & Newcastle is expected to report a mixed bag when it unveils results for 2006 tomorrow.

Analysts forecast the UK and Europe will have seen a mediocre year at best, although S&N's Russian business is set to have had an excellent year.

JP Morgan analyst Simon Hales predicted pre-tax profits, before exceptionals, to sit at pounds 3.03bn, against pounds 2.80bn in 2005, a potential 8% rise.

S&N is also due to outline details of further cost-saving programmes when it posts 2006 figures.

The group pushed up prices of beer and cider for wholesalers ( up 3.5% and 3.9% respectively ( in December to offset rising running costs, including the price of energy, water treatment and aluminium, but said it would announce additional ways to bring costs down this month.

The group, which owns brands including Newcastle Brown Ale, Foster's, Strongbow cider and Kronenbourg 1664, reported pre-tax profits up 12% in the six months to June 30 last year thanks to the performance of its leading brands during the football World Cup and hot summer weather.

But the company warned at the end of last year of tough conditions and cost pressures that would also continue into this year.

* BAE Systems is expected to reveal a strong boost to sales following increased US defence spending when it posts its full-year results on Thursday.

The firm's US peers reported strong growth during the final quarter of 2006 ( largely due to supplementary spending on the Iraq war. BAE, which operates its Land Systems unit from Newcastle, is expected to reveal a similar lift and is also set to benefit from George Bush's defence budget proposals to spend around pounds 19bn ($37bn) on replacing and repairing war damaged equipment during 2007. …

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