Companies reporting next week

MARKET heavyweight

Analysts expect supermarket chain Tesco to report sales growth of 4% in the third quarter when it makes a trading statement on Tuesday, as it continues to capitalise on weak competition and strong food price inflation.

This would be a fall from the 6.8% like-for-like sales growth it reported for the half-year to September, but indicators remain positive, with industry data suggesting Tesco has gained market share and the addition of new space remaining above average for the sector.

Fund manager Gerrard said underlying operating margins should remain flat, although the core food business continues to outperform most of the industry and other businesses such as finance and Tesco.com are performing well.

British Land is forecast to report a near-25% leap in pre-tax profits to £80m when it presents its half-year results on Wednesday and to express fresh optimism about the outlook for the London property market.

A rise in profits would be driven by a higher level of rental income following rent reviews and new lettings, as well as the effects of a convertible bond and last year's share buyback scheme.

Analysts expect the diluted share price to be 893p, including a 25p benefit of duty tax relief on £3.2bn of British Land property which is located in areas of the UK designated as economically disadvantaged.

It is hoped DMGT will follow other media companies in saying the UK advertising market is recovering and give an upbeat assessment of trading in October and November, perhaps focusing on positive movement in circulation revenues. Analysts expect DMGT to post pre-tax profits of £183m compared with £177m last year.

Analysts are looking for ITV company Granada, which is planning to merge with fellow industry player Carlton, to update them on how it is implementing the remedies required by the Competition Commission when it reports on Wednesday.

Experts at broker Barclays Private Clients are also hoping to see progress on cost cutting, which they say would give the shares a boost.

They forecast that Granada will report full year profits before tax of £153m, up from £62m last time - when the figures reflected the company's funding of ITV Digital.

Additional interest costs to fund acquisitions and the impact of the FRS17 snapshot accounting measure are expected to keep profits flat at £95m when chemicals, coatings and pharmaceuticals specialist Johnson Matthey posts half yearly figures on Thursday.

The group's refining activities are expected to have been adversely affected by weak palladium and rhodium prices offsetting strong platinum prices and ongoing growth is being sought in the group's pharmaceutical materials division as it builds up codeine and morphine production in the US.

Johnson's colours operation is anticipated to have benefited from currency translation of European profits, but broker Gerrard says the strength of the euro could hit customers' volumes.

With the water regulator's review now underway, first half figures from water and waste firm Pennon Group on Thursday are set to play second fiddle to any comment from Pennon's management about the regulatory process and its expected outcome.

The group said in a trading update in September that trading for the first six months had met market expectations and that its core South West Water business remained on track to outperform its current regulatory contract.

Analysts at Gerrard say Pennon is likely to turn in interim pre-tax profits of £41.9m against £42.2m previously.