LONDON (AFX) - Tomkins PLC, the engineering and auto-parts group, is expected to report a dip in half-time profits today as lower North American automotive production volumes and high raw material costs continue to impinge on earnings.
First quarter profits from the group eased from 40 mln to 39.8 mln stg and analysts reckon many of the issues that impacted the first three months of 2005 will have run into the second quarter period to end-June.
The range of brokers' forecasts for the second quarter is for pre-exceptional pretax profits of between 63 mln to 68 mln stg. Stockbrokers Williams de Broe looks for pre-exceptional pretax profits -- under the new IFRS accountancy standard -- of 66.5 mln stg, compared to an adjusted figure of 71.2 mln stg last time.
At the operating level, analysts look for second quarter earnings of about 79 mln stg and for half-time profits of 148 mln stg. SG Securities is forecasting an overall fall in first half pretax profits from 133 mln to 126 mln stg.
Despite the slip in earnings, investors anticipate a rise in the interim dividend from 4.83 to 5.1 pence a share.
Apart from the figures, investors will hoping for some acquisition news. Tomkins has close on 1 bln stg of financial firepower to spend and is believed to be looking at a number of activities based around its Powertrain and Stackpole automotive spares and aftermarket business.
Some analysts reckon Tomkins needs another large acquisition to underpin its earnings momentum and to provide the catalyst for a re-rating of the stock, which has traded around the 240-290 pence range for the past two years.

LONDON (AFX) - Investors will be hoping Corus Group PLC will mark its return to corporate health with its first dividend payment since 1999 when the Anglo-Dutch steelmaker reports its interim results later today.
The group indicated at its annual meeting in June that it would consider a "modest" interim payment and stockbrokers Williams de Broe looks for a notional 0.5 pence payout -- paving the way for a full-year total of 2.0 pence a share.
The foundation for a return to the dividend list was made last year when the group reported its first operating profit since it was formed from the merger of British Steel and Koninklijke Hoogovens in 1999.
Operating profits for the six months to June 2005 -- which will be reported under the new IFRS accountancy standard -- are expected to show a further improvement on the second half of 2004 and Swiss broker UBS looks for an EBITDA figure of 629 mln stg, compared to the 620 mln stg reported in the closing months of 2004.
Stockbrokers Williams de Broe looks for an EBIT figure of about 460 mln stg for the first six months, which it reckons will equate to a pretax figure of about 420 mln stg. Last year, the group reported half-time profits of 163 mln stg under the old UK GAAP standard.
Despite the improved performance, however, there are signs that trading conditions have softened with weaker demand from North America and Europe resulting in lower selling prices.
To align production with demand, Corus has already reduced output in the second quarter by 70,000 tonnes per month and expects to increase this to 160,000 tonnes in the third quarter.
Investors will be hoping for further guidance on the outlook for demand and prices and whether raw material costs -- especially for coking coal and iron ore -- have peaked.
Analysts will also be interested to hear whether Corus has made any progress on the sale of its aluminium operations. In 2003, a sale to French steel group Pechiney SA was blocked by Corus's Dutch supervisory board. However, recent moves to realign the Dutch board have rekindled hopes that a sale may soon come back onto the agenda.
The ongoing consolidation of the global steel industry is also sure to add interest to the figures after recent speculation about a tie-up with Germany's ThyssenKrupp AG.
Meantime, Corus, along with other European steel groups, is believed to be interested in bidding for a 49 pct stake in Turkish steelmaker Erdemir. Bids here have to be lodged with the Turkish government by September.

LONDON (AFX) - Rexam PLC, the world's biggest maker of beverage cans, is expected today to post a 3 pct rise in first-half profit fuelled by rapid growth in 'emerging economies' such as Brazil.
Pretax profit before exceptional items is expected to have risen to 139 mln stg in the six months to June from 135 mln the prior year, according to a median estimate of eight analysts' forecasts supplied by the company.
Analysts including Williams de Broe's Andrew Darke expect Rexam's Brazilian unit Latasa, bought for 272 mln usd in November 2003, generated the bulk of the profit growth, aided by a 6 pct increase in sales volumes and cost cuts.
Rising demand in other developing countries such as China, Mexico and Russia, is expected to have further sheltered the British consumer packaging group from less buoyant markets in the United States and Europe.
Though by some margin still the world's largest market, with some 100 bln beverage cans sold annually, the US has been growing at a comparatively subdued pace, with sales rising by around 1 pct annually.
Moreover, Rexam's leading customer, Coca Cola Co, last month revealed unit case volumes of carbonated soft drinks fell by 1 pct for the second successive quarter.
The US soft drinks giant has been hurt after being slower to launch new diet versions than rivals such as Cadbury Schweppes PLC in response to changing consumer tastes.
But profit at Rexam's US division was likely buttressed by growth in demand for non-standard size cans, on which it makes more money.
Looking forward, profit growth is forecast to accelerate during the second half as this summer's heatwave in many parts of Europe boosts sales of soft drinks.

LONDON (AFX) - The impact that the London terrorist bombings have had on hotel bookings will be a major focus of interest for investors in Hilton Group PLC when company reports its interim figures later this morning.
The group, which operates 18 hotels in and around the London area, had seen a sharp pick-up in occupancy rates in the early part of 2005 as tourists returned to the capital.
But the recent attacks in London are likely to have deterred some travellers and fellow hotels operator Millennium & Copthorne PLC recently said bookings at its five London hotels slowed dramatically following the July 7 bombings.
Analysts expect Hilton to have suffered a similar fate and some are concerned that a slip in short-term occupancies may restrict the scope for further increases in room rates later this year.
For the first half next week, analysts expect group pre-exceptional pretax profits to emerge at around 185-200 mln stg. Swiss broker UBS looks for profits of 185 mln stg, while Deutsche Bank is forecasting 192 mln stg. Stockbrokers Williams de Broe looks for first half profits of 197 mln stg. This would compare to a reported figure of 189.7 mln stg last time.
A rise in the interim dividend from 3.6 to around 3.9 pence a share is also anticipated.
The group is also in the midst of a 400 mln stg hotel asset sale programme with some of the proceeds being returned to shareholders. The group, which has already sold 11 UK hotels for 111 mln stg, recently put another 18 on the market, including the Hilton London Gatwick and Hilton London Olympia. Some brokers reckon shareholders could get a capital return of about 20 pence a share following completion of the disposals.
Apart from the hotels division, Hilton's gaming and betting division will also come under scrutiny with the performance of Ladbrokes new on-line poker sites coming particularly under the spotlight given the hugely successful flotation of PartyGaming PLC.
There may also be some news on the possible sale of Hilton's LivingWell fitness club chain. The group is believed to have sounded out potential buyers for the 122-strong chain which analysts reckon could be worth 80 mln stg.

LONDON (AFX) - Invensys PLC, the UK industrial automation and controls group, is set to deliver a steady rise in operating profit when it reports its first quarter results today.
The London-based company, whose business spans rail systems to air conditioning products, saw its full-year operating profit slip in May, blaming the disposal of businesses and the weakness of the US dollar.
Since then, however, analysts believe Invensys has made steady progress in smoothing out fluctuations in quarterly profits and cash flow.
Last month Invensys said it expects its first quarter profit to be in line with expectations and ahead of the same period a year earlier.
The average analyst forecast for operating profit is 30 mln stg, up from 18 mln stg in the same period last year.
Aside from the headline figures investors will focus on Invensys's order book which disappointed some industry observers when the company reported its full-year results.
"Given the healthy economic conditions, Invensys should be able to report more than the 1 pct like-for-like order growth it did last year," said investment bank JP Morgan in a preview note on the results.
Other areas likely to come under the spotlight this morning include Invensys's cash flow, which benefits from an absence of major interest payments in its first quarter, and the performance of its divisions.
JP Morgan said its expects a "healthy development" in Process Systems but will look for an update on the Rail and Control divisions, where performance is expected to be weaker.

Good morning traders!

In Asia, the Hang Seng ended the morning up 55.55 points at 14,929.40 while the Nikkei recently traded down 81.37 points at 12,420.89.

New York's main oil contract, light sweet crude for delivery in October, was trading at $67.71 a barrel, up 39 cents from its close of $67.32 in the US overnight. Analysts were predicting $70 sooner rather than later.

Back with UK news in a mo.....

Happy trading!

G.

Outlook

MARKET EXPECTATIONS

* Corus Group six months to June EBITDA under IFRS 629 mln stg vs 620 mln; interim dividend 0.5 pence vs nil

* Davis Service. Williams de Broe forecasts six months to June pretax profit 43.0 mln stg vs 40.6 mln; interim dividend 5.6 pence, up 6 pct

* Hilton Group pretax profit before exceptionals 185-200 mln stg vs 189.7; interim dividend 3.9 pence vs 3.6

* Rexam six months to June pretax profit before exceptionals 139 mln stg vs 135 mln

* Tomkins second quarter pretax profit before exceptionals under IFRS 63-68 mln stg vs adjusted 71.2 mln; intErim dividend 5.1 pence vs 4.83..

AFX UK at a glance share guide

LONDON (AFX) - Leading shares are expected to start the session lower, mirroring sharp falls on Wall Street overnight, as oil prices hit new record highs, dealers said.
According to spread-betting firm CMC, the FTSE 100 will open 23 points down at around 5,252, after closing yesterday off 25 at 5,275.2.

MARKETS
FTSE 100 5,275.2, down 25.0
FTSE 250 7,704.5, down 2.9
DJIA 10,434.90, down 84.70
Nasdaq Comp 2,128.91, down 8.34
S&P 500 1,209.60, down 8.00
Tokyo: Nikkei closed at 12,405.16, down 97.10
Hang Seng midday 14,929.40, up 55.55
Gold 437.20 usd (439.15 usd)
Oil - Brent Oct 66.01 usd (64.65 usd)

ECONOMICS
UK July motor vehicle production (0830 GMT)
UK Q2 business investment (0830 GMT)

TODAY'S PRESS
* US army looks to leave Iraq; troop cuts depend on political progress; part of push to hand defence to home forces; British in south likely to be withdrawn first - FT
* MISYS, the software and services group, is facing a shareholder rebellion next month over plans to award two executives a "retention" bonus worth 1.2 mln stg each to stop them quitting if they fail to become chief executive - FT
* London skyscraper CityPoint set to be sold for more than 500 mln stg by Pillar Properties, the fund manager recently acquired by LAND SECURITIES - FT
* Merger talks between NTL and TELEWEST reach a critical stage, with wrangles over pricing and tax issues potentially threatening to wreck any deal - Times

PRESS COMMENT
FT
THE LEX COLUMN comments on BHP BILLITON (BHP's production growth should offset an expected tailing-off in commodity prices; this pushes the peak in earnings forward, perhaps as far as 2007, and gives investors little reason to throw in the towel), Cash flow statements (cash may be king but in financial statements it's a second-class citizen), Swatch Group (prospects for radical restructuring at a company that has sat on a net cash position since 1998 look slim), Oil and earnings (Citigroup estimates that the revenue of US energy companies outweighs the cost of energy consumption for the S&P constituents) - BRAMBLES (may not be much upside potential in the short-term)
Times
RUMOUR OF THE DAY: FIRST AFRICA OIL (talk it is close to a deal on its assets in Chad with a state-owned Asian oil major) - DIRECTORS' DEALINGS: ABERDEEN ASSET MANAGEMENT (two directors sell 1.2 mln and 225,000 shares respectively) - TEMPUS: BHP BILLITON (hold on), HENDERSON GROUP (hold), PSION (buy)
Mail
LAIRD (dealers blow sale gossip at Laird out of the water) - CENTRICA (Gaz de France appears the most likely bid candidate)
Express
SHARE WHISPER: RAYMARINE (talk it has several value-enhancing acquisitions in the pipeline and appears undervalued following the outsourcing of its manufacturing from Portsmouth to Hungary) - WHO'S DEALING: ULTIMATE LEISURE (Allan Rankin, former chairman collected about 2.7 mln stg for more than half his stake)
Guardian
CENTRICA (Norsk Hydro bid speculation) - SHIELD CAPITAL (rumours it is close to announcing a reverse takeover) - PARITY (stock overhang cleared)
Telegraph
QUESTOR: BRAMBLES (take at least some profit), WOLVERHAMPTON & DUDLEY (worth holding on to), HENDERSON (probably worth buying but SCHRODERS is the quality play in the sector)
Independent
THE INVESTMENT COLUMN: BRAMBLES (hold), HITCHENS, HARRISON (buy), IQE (buy now before the herd)

How curious - amid a sea of red, there's LLOY up 10.5p.......

Midday Market Wrap

End of day market wrap