The week ahead: Primark sweetens ABF sugar setback
Monday 09 September 2013
Primark-to-sugar group Associated British Foods kicks off the corporate week today with its pre-close trading statement and, as with its third-quarter results in July, sales growth at retailer Primark looks set to offset a fall in its sugar division. Analysts at Berenberg are predicting Primark’s like-for-like sales will have grown 4 per cent over the second half of the year, down from a 7 per cent rise in the first six months, although they say this would still be “robust”. Sugar sales are likely to have dropped by 4 per cent in the second half, according to the scribblers, but they believe this will not have prevented a 5 per cent rise over the full year. Their call is that the rest of the business should have remained “on track”, adding up to a mixed performance, albeit one “moving in a positive direction”.
Results/Updates: Associated British Foods, Brady, City of London Investment Group, Hydrogen, Murgitroyd, Escher, Ricardo Telit Communications, Williams Grand Prix.
Coffee-to-hotels group Whitbread steps up to tell the City how summer trading has been doing at its second-quarter results. Will all the hot weather have hit coffee sales for its Costa Coffee business? Panmure Gordon’s Simon French thinks so. Its sales will face challenging comparisons on this time last year. He predicts its hotel business Premier Inn will be impacted by the strong results it had last year during the London Olympics. So Mr French forecasts 2.5 per cent group comparable sales growth compared with 3.1 per cent in the first quarter. He thinks the stock now trades too high. He doesn’t think there will yet be a change to analysts’ consensus forecasts of pre-tax profit of £388m for the full year ending in 2014. But he rates it a sell and gives the shares a 2644p price target.
Results/Updates: Abcam, Ashmore, Amara Mining, Deltex Medical, Craneware, ISG, Hilton Food, Netplay TV, Stadium, Surgical Innovations, Whitbread.
Wednesday could be Mike Ashley and Sports Direct’s day. It is widely tipped to be confirmed it will enter the FTSE 100 in the FTSE Group’s quarterly reshuffle. Confirmation of the move will come on a day it will report a trading update and hold its AGM. Analysts at Cantor Fitzgerald think its track record, with earnings improving by over 30 per cent a year in the past five years, has been impressive after a “back to basics” strategy was introduced in 2009. They think this strong growth will continue.
Results/Updates: African Minerals, Alkane Energy, Alliance Pharma, Barratt Developments, Brooks MacDonald, Kingfisher, Sports Direct, Thorntons.
Dalton Philips, the chief executive of Morrisons, will be quizzed about its plans to launch food online and its burgeoning estate of convenience stores at its half-year results on Thursday. The UK’s fourth-biggest supermarket chain is forecast to post an 8 per cent fall in profit to £410m over the 26 weeks to 4 August, on flat revenue of £9bn. Morrisons has been struggling this year. The supermarket has blamed this on it not having a website that people can shop on and its small number of convenience stores. But Mr Philips is likely to claim its trading is now heading in the right direction. The grocer has vowed to start selling food online in January, following its agreement with the internet specialist Ocado in May.
Results/Updates: Centaur Media, 32Red, Elektron, Darty, Dunelm, Home Retail, Fairpoint, Futura Medical, Kier, Next, Ocado, Restore, WM Morrison.
Will investors be raising a glass on Friday when cheap pubs operator JD Wetherspoon reports its full-year results? Analysts at Numis predict a pre-tax profit of £76.5m, ahead of last year’s £72.4m but the results will not be a surprise as it has reported a 9.2 per cent rise in total sales for 50 weeks of the year. Numis’ Douglas Jack expects the outlook for the next period to be reasonably upbeat as there is an “improving market and better margin prospects”. Mr Jack rates the stock as an add for now with a 750p price target.
Results/Updates: Songbird Estates, JD Wetherspoon.
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