Retails is hardly the ideal place to be as the credit crunch worsens and consumers keep their hands in their pockets. JP Morgan slashed its earnings and price targets for UK retailers last week "in anticipation of a significant slowdown in sales over the next 18 months", and this week marks three more retail results.
Investors will be looking to Debenhams with interest. Its September update was nowhere near as bad as feared, with like-for-like sales falling 0.9 per cent, but experts are still cautious. It remains under pressure from weighty debts and an ongoing overhaul, and analysts from JP Morgan cut its price target to 36p per share from 45p. They predicted earnings per share down to 5.8p from 7.6p and put an "underweight" rating on the stock. Profits are expected to come in at around £110m.
The broker is not feeling overly confident for the other retailers reporting this week. It halved its price target for DSG International from 50p to 25p, and lowered its expected earnings per share for Home Retail Group next year.
Today: Anglesey Mining has endured a rather tough week. The group's shares intensified recent falls, hit by the sentiment facing the sector, as well as a failed attempt to offload one of its mining projects. The group announced last Monday talks had broken down with Perth-based Western Metals over the sale of its Parys Mountain project in north Wales, adding "negotiations on this matter have now ceased". The shares closed at 6.5p, down from 28p less than a year ago.
Results: First half – Anglesey Mining; Second quarter – Metro International; third quarter – Chi Investments.
Tomorrow: Subsea 7, the Aberdeen-based undersea construction and engineering group, is set to report its three-month figures. The stock tends to track the oil price, which has weakened heavily in the past few months, although it has announced some decent contract wins and will hope for a solid quarter. It announced earlier this month it had consolidated its position in Mexico, after winning two contracts in the region worth $20m (£11.6m).
Results: Full year – Debenhams, St Ives Group; Third quarter – Subsea 7.
Wednesday: Analysts are backing the AIM-listed Vertu Motors to outperform the market when it announces its interims. Vertu was launched in 2006 to buy new and second-hand car sales businesses in the UK, with senior managers from Reg Vardy. It now owns Bristol Street Motors and is the UK's 10th largest motor retailer.
Caroline Watson, analyst at Panmure Gordon, said: "Supported by one of the best management teams in the sub-sector and a very strong balance sheet, we believe Vertu looks very well placed for the long term." She expects pre-tax profits of £2.7m, up from £600,000 last year, and rates the stock a "buy".
Analysts are not so bullish about Home Retail Group, which is also putting out its interims. Jonathan Hogan at Merrill Lynch forecast a 20 per cent pre-tax profit slump to £120m. The group has already announced sales and gross margin movement, with first half like-for-likes down 3 per cent at Argos and 10.3 per cent at Homebase. Mr Hogan said there might be some indication on the size of Homebase's writedowns if the group has completed its audit.
"Management has done significant work rationalising the cost base in the past, and we had thought further efficiencies would be difficult to achieve. However, management has suggested that there is more it could do on costs to protect earnings. We will be looking for further details on this," he said.
Dresdner Kleinwort analysts predicted pre-tax profits of £125m, saying the key pain for Argos was its furniture and homewares division, while Homebase was hit by the weather and stronger competition from B&Q.
Results: Full year – Boomerang Plus, Egdon Resources; First half – Home Retail, Vertu Motors. Third quarter – GlaxoSmithKline, Willis Group.
Thursday: Colt Telecom is putting out its third-quarter results, and the consensus estimate from 11 brokers is for revenues of €420m (£327m), pretty much flat on last year, with pre-tax profits of €14.7m, up from €8.7m.
Results: First half – DSG; Abbeycrest. First quarter – NDS. Third quarter – Colt Telecom.
Friday: No major announcements expected.