The high street will come under the spotlight this week, as investors scrutinise updates from Next, Marks & Spencer and Primark-owner Associated British Foods.
Wednesday's interim management statement from Next "will be most closely watched", according to Shore Capital, as M&S and ABF have already published trading updates for the first half and the full year respectively. At the first-half stage, when Next last issued an update, retail like-for-like sales were down 2.5 per cent, with management guiding towards a decline in the range 3.5 to 6.5 per cent in second half of the year. Given the weak comparables, however, Shore, whose full year-pre-tax profit forecast of £444m assumes a 3 per cent fall in retail like-for-likes in the second half, reckons that "a positive number is possible".
There are unlikely to be any surprises with M&S, which is due to issue half- year results on the same day. As Shore points out, the company held a major investor conference in October and has already reported sales numbers for the period. Numis agrees. "On the positive side, we view the presentation as an opportunity for the business to address some of the concerns from the investor day, notably the lack of clarity around many 'Project 2020' ideas," Numis analyst Andrew Wade said, referring to the business development and supply chain initiative.
At Primark, Jefferies brokerage expects to hear of second-half like-for-like growth of around 7 to 8 per cent when ABF issues full-year numbers tomorrow. "We anticipate Primark margins will decline 50 basis points in the second half, as the weaker sterling will erode gross margins due to the predominantly dollar-denominated sourcing of products," Jefferies said. "This will be partially offset by lower freight costs and better prices from distressed suppliers."
Today: Telecity's interim management statement should support current expectations for growth, according to Deutsche Bank, which predicts that second-half revenues at the data centre specialist will swell 23 per cent year-on-year. "We don't anticipate any definitive news on possible new expansion projects, but could see management confirm they are still assessing various opportunities in key markets," the broker said citing UK, Netherlands and Germany. "We might also get an update on the order book, which in our view would be supportive of current market expectations for 2010."
Results/updates: Chloride, Ryanair and Telecity.
Tomorrow: Results/updates: Associated British Foods, Antofagasta, Hammerson, Stagecoach and Rolls-Royce.
Wednesday: Cobham's interim management statement is expected to confirm that trading at the defence and aerospace group is progressing in line with expectations, according to Numis. Revenue growth at the company's technology divisions should have gathered paced in the second half of the year, the broker added.
Also on Wednesday, JD Wetherspoon is due to issue a first-quarter update. Panmure Gordon expects trading over the three month period to have continued in the same vein as the first six weeks of the 2010 financial year, when like-for-like sales grew 1.2 per cent and total sales climbed 5.8 per cent. Altium analysts are also positive on sales, highlighting the fact that they have already upgraded forecasts for the group by 55 per cent since January, chiefly owing to the strong like-for-like performance.
Results/updates: Logica, Rightmove, Marks & Spencer, Aviva, FirstGroup, Taylor Wimpey, Next, JD Wetherspoon and Cobham.
thursday: Third-quarter investment returns are likely to be highlighted in Catlin's interim management statement, according to Numis, which expects the strong performance seen in the first half to continue. "Our forecast third-quarter investment return of 2.3 per cent reflects Catlin's above- average exposure to the recovery in risk asset classes such as hedge funds and non-government bonds, together with modest gains in government securities over the period," the broker said.
Tomkins' interim management statement should show evidence of improving trends in the engineering group's end markets, according to Bank of America Merrill Lynch, which last week said the weakness in the company's stock had been overdone.
Results/updates: Cable & Wireless, RSA Insurance, Unilever, Man, Invensys, Millennium & Copthorne Hotels, Old Mutual, Vedanta Resources, Wincanton, Tomkins, and Catlin
friday: Results/updates: Rentokil Initial, Tate & Lyle and British Airways.