The Week Ahead: Primark may come to the rescue as ABF faces a struggle over sugar


Click to follow
The Independent Online

Things could get a bit sticky for Primark owner Associated British Foods after accusations that another subsidiary, British Sugar, may have fixed sugar prices. However, today’s update is likely to show that the clothing retailer’s success is offsetting ABF’s problems with flagging prices for the sweet stuff. Numis’s scribblers said its previous update revealed “worse than expected sugar results and foreign exchange concerns” but was “mitigated by a better than expected performance from Primark”. They expect more of the same at ABF’s latest trading update.

Analysts at Berenberg bank expect 4 per cent comparable sales growth at Primark, which will drive first-half growth for ABF “despite significant weakness in sugar”.

Tomorrow Capital & Counties Properties, the landlord of Covent Garden and Earls Court, releases full-year results. It has received planning consent for a 10 million sq ft Earls Court scheme, but this might not have that much impact on its figures and analysts at Numis expect its Covent Garden property values to be the main driver. It is expected to report “strong retail/leisure leasing activity during the last six months”.

Ladbrokes also releases results tomorrow. The bookie has been under fire for falling behind in online gambling. It is reported to be planning to announce a reduction in shop openings at its full-year numbers next week, when the chief executive, Richard Glynn, will be under pressure after four profits warnings in 20 months. Oriel Securities analysts forecast a pre-tax profit of £113m.

On Thursday the housebuilder Barratt Developments will report its first-half results and Shore Capital expects big profit and dividend growth over the next three years. Despite a strong share price rise for the housebuilding sector recently, more is expected. Shore forecasts that Barratt’s earnings per share will grow by 73 per cent between 2014 and 2016.

At the end of the week investors will return to the bookies. William Hill is further ahead in the online stakes and Goldman Sachs said its valuation was starting to look attractive again after recent falls.