Investors were not exactly raving about Ocado after it floated in July, but things have been looking up recently for the online grocer and last week it finally made it past its initial float price of 180p.
The expected release today of its trading update, which will cover both the fourth quarter and Christmas period, should be a good indicator of whether the group will continue its rise or whether it has reached a peak.
Shore Capital says it expects Ocado to reveal "sustained prevailing sales momentum to its November year-end at [around 30 per cent], a strong performance at any time." However, it is very bullish on how the company will have dealt with the snow over the festive period, predicting sales growth in December of between 40 to 45 per cent thanks to "a surge in orders from customers restricted in their access to food stores".
UBS, which worked on Ocado's flotation, is less sure, describing the weather as a "a double-edged sword". It points out that despite the increased demand, and the fact that the group's vehicles were prepared for the conditions, on balance it "remains a negative factor given the scope for disrupted inbound supply to [its warehouse] as well as slower drive-speeds hence impacting distribution efficiency."
After updates from Hays and Robert Walters last week, fellow recruiter Michael Page reveals its fourth-quarter announcement today. Numis Securities' Steve Woolf is expecting the group "to have enjoyed a strong finish to the year, particularly from its Asia-Pacific and US businesses", and sees net fees for the final quarter growing by £12m to around £125m.
Results/Updates: Debenhams, Michael Page, Ocado, Persimmon, and Wm Morrison.
Results/Updates: Computacenter, Dunelm, Interserve, Marks & Spencer, Signet, and Topps Tiles.
With Wm Morrison and Tesco both releasing Christmas-trading updates, it is a big week for the supermarkets and Wednesday brings J Sainsbury's third-quarter statement.
In November, its chief executive Justin King expressed his confidence that the group's expansion plans would help it to cope with the sector's tough outlook, yet JP Morgan Cazenove has sounded a warning over its growth strategy. The broker's analysts believe that "many commentators appear to be ignoring how much this growth is costing J Sainsbury", and predicts that for it to be sustained, "further financing will be sought in the medium term".
With regards to the figures, Deutsche Bank's James G Collins says the like-for-like numbers are "likely to compare favourably against the shorter-term six-week trading numbers issued by Wm Morrison and Tesco", partly because of J Sainsbury's "relatively limited exposure to some of the regions worst hit" by the snow in December.
The last time SuperGroup released an update, the clothing retailer plummeted nearly 25 per cent in just six sessions, so it will be hoping that its Christmas trading statement – also out on Wednesday – receives a slightly better reception. The last fall came despite its first-half figures largely meeting forecasts, although it did give warning about an increase in raw-material costs, so investors will be on the lookout for any more information on that front.
When Barratt Developments updated the market back in November, it was downcast on the autumn period, which its chief executive said was harmed by the lack of mortgage funding available to potential housebuyers. As a result, the group said it expected "limited volume growth" over the full year, and Numis's Chris Millington does not forecast Wednesday's trading update to change this position. Mr Millington says the focus will be "on any update on refinancing discussions and general strategic direction", but adds that he believes the stock continues to trade at too low a price "despite net debt issues easing and the group rebuilding returns through new land, replanning and cost cutting".
Results/Updates: Barratt Developments, Fenner, Greggs, J Sainsbury, N Brown, SuperGroup, and The Restaurant Group.
Considering the short period covered by Tesco's Christmas-trading statement on Thursday, Deutsche Bank is expecting the impact from December's extreme weather to be "significant". In terms of the supermarket's overseas trading, the broker is forecasting like-for-like growth in Asia of 2.8 per cent, compared with 4.3 per cent during the third quarter.
Results/Updates: Ashmore, Balfour Beatty, Dixons Retail, Game Group, Halfords, Hilton Foods, Home Retail, Northern Foods, Premier Oil and Tesco.
Results/Updates: Smiths News.
Tomorrow: BRC retail sales monitor; RICS house price data; US ABC consumer confidence; US wholesale inventories
Wednesday: BRC shop price index; Visible trade balance
Thursday: Bank of England interest-rate announcement; Industrial production, Manufacturing output; NIESR GDP estimates; US initial jobless claims
Friday: Producer price index; US business inventories; US retail sales; US University of Michigan consumer sentimentReuse content