Marks and Spencer's revival under Stuart Rose has become a well documented case study of a successful turnaround. In salvaging the company, his reputation is pretty much assured, but turning things around is one thing, maintaining the momentum is another.
Talk of his departure and queries over his successor has been engrossing the retail sector in the past few weeks, and although Mr Rose still has a year to run on his contract investors are hoping for a seamless transition.
Looking at the share price, it seems as if the revival at Marks has run out of steam. But it is easy to forget how tough an environment the high street still is – higher interest rates, increased personal debt and reduced consumer spending means the fight for every penny spent is getting more desperate.
M&S is expected to deliver solid first-half results, with a pre-tax-profit expected to hit £444m, 10 per cent ahead of the same period in 2006. A possible fly in the ointment includes more poor weather and M&S's refurbishment programme.
TODAY: Results: Full year – Fairplace Consulting; DCD Media.
TOMORROW: Investors in the directories group Yell, which publishes Yellow Book in the US and Yellow Pages in the UK, will be pleased by the turnaround the company has made since April's profit warning. Despite tough competition in the US directories market, Yell is set to release positive results from its first half, with revenue anticipated to reach £952m and pre-tax earnings of £305m.
Intercontinental Hotels is expected to post a 17 per cent rise in underlying profit and is said to be positive over the next year as it continues to expand ahead of target, with pre-tax-profit estimated to hit £197m and earning per share 46.7p.
Its chief executive Andrew Cosslett has highlighted strong demand with relatively low levels of new supply as factors for driving room rates and for helping the brand to continue to outperform the market. There was also more talk of a bid last week which would have helped interest in its shares, but a strong dollar headwind will be tough to overcome.
Results: Full year – Sport Media Group. First half – Penna Consulting; Yell Group. Third quarter – InterContinental Hotels.
WEDNESDAY: A solid statement is expected from the Cambridge-based electronics company CSR, which specialises in Bluetooth microchip technology, along with its interim numbers. City analysts are looking for progress towards full-year forecasts of £76.7m in pre-tax profits; a direct result of its technology appearing in more games consoles and other electronic devices.
Results: First half – Vertu Motors; BTG; Top Ten; FirstGroup; Shanks Group; Umeco; Marks & Spencer. Third quarter – Millennium & Copthorne Hotels; CSR; Tomkins.
THURSDAY: Investors will be looking for positive results from 3i, the UK's largest-quoted private equity player, even if the company has already warned credit turbulence could impact its results. That said, most of the deals impacted by the credit crunch are at the top end of the market, and given 3i's strong balance sheet and preference for smaller deals, it is still expected to report realisations in excess of £1bn for the full year.
The sugar-to-clothing retail group Associated British Foods should show steady progress in its full-year results, with profit forecast to hit £606m and earnings per share of 52.6p, in line with expectations. Growth in its sugar business and the success at the Primark discount retail chain should counterbalance lower profits at its grocery and ingredients businesses. Sales and profit at Primark's 170 stores are expected to be considerably ahead of last year.
Things seem to be going well at Cable and Wireless after the shareholders' showdown earlier this year over the introduction of "fanciful private equity" bonus rewards for its senior executives. The international communications company is expected to deliver a pre-tax-profit of £242m and earnings per share of 5.7p, and once again bid talks are doing the rounds.
Results: Full year – Fenner; First Choice Holidays; Punch Taverns; Associated British Foods. First half – Carphone Warehouse; Man Group; Dairy Crest; BT; Charles Stanley; 3i Group; Invensys; Cable & Wireless. Third quarter – Mapeley; International Power; Old Mutual; Invesco.
FRIDAY: The distributor of electronic, electrical and industrial supplies Electrocomponents is set to post encouraging first-half results, with a consensus forecast looking for operating profit of £95m for the full year.
Analysts expect a slight improvement in the first half for Britain's leading model railway manufacturer Hornby, even though its share price has steadily decreased since August from 288p per share to under 250p.
Results: First half – Electrocomponents; Hornby; Wincanton.Reuse content