The Week Ahead: Primark expected to beat growth forecasts

TODAY: Britain's battered high streets will be in focus at the beginning of a busy week when Associated British Foods provides a trading update.

All eyes will be on the company's Primark chain of stores, which have been putting in a robust performance and reported healthy growth when the company updated the market in July. The fashion chain contributes 40 per cent of the company's profit, and has benefited from the strength of the value clothing niche in the recession – Matalan has also been performing strongly, as have the supermarkets' discount ranges. Analysts confidently expect the chain to beat the company's 5 per cent growth forecast.

All of this will rather overshadow the group's food operations, which include British Sugar. It should benefit from the commodity's firming price.

Whitbread is also due to update the market after creating ripples at the end of last week by closing its final salary pension scheme. Revenues slumped by 7.9 per cent in the 13 weeks ending 28 May, and were down by 9.6 per cent on an available room basis.

Results/updates: Lupus, Healthcare Locums, Kofax, Associated British Foods, Whitbread.



TOMORROW: Britain's largest plant hire group, Ashtead, issues first-quarter results which are expected to show a pre-tax profit of £8m, down from £35.9m in the first quarter of 2009. RBS says that while the US and UK recessions continue to hit group profitability, recent results from Aggreko suggest that conditions in the parts of the latter's markets where it comes across Ashtead have not worsened markedly during the quarter.

UBS says that "Ashtead should benefit from growth in rental penetration, which should be accelerated by the recession."

Results/updates: Staffline, Mattioli Woods, Stadium Group, Interior Services Group, Abcam, Advanced Medical Solutions, Ashtead Group.



WEDNESDAY: If only its finances were as sweet as its chocolate. The recession has, however, left a bitter taste in the mouths of Thorntons' investors. The downturn, together with the collapse of the Birthdays chain, which was a reliable outlet for the company's product, have analysts predicting a sharp fall in annual profits for the chocolate maker, with the consensus suggesting they could be as much as 40 per cent lower.

The operation enjoyed the benefits of an extra three weeks to sell chocolate in the run-up to a much later Easter than last year – while the troubles of rivals such as Woolworths didn't hurt. However, this is likely to have been offset by a weaker performance during the early summer's warm weather.

Results/updates: Thorntons, Sports Direct, Prezzo.



THURSDAY: Retail is back in focus on Thursday with the supermarket operator WM Morrison expected to report solid first-half sales and a good underlying performance.

Charles Stanley forecasts that sales could be up 8 per cent, although the figure has been boosted by food price inflation. Recent restructuring of the company's distribution network as well as in store layout and product line changes have helped to increase efficiency across the operation, and the measures are expected to be reflected in the interim results.

Sam Hart of Charles Stanley points to the creation of two distribution centres in the south of England, which will "take the pressure off their North of England operation". He went on to say that their results should show "industry leading sales growth" and that "significant potential exists to further expand operating profit margins". The consensus forecast is for a 21 per cent rise in underlying pre-tax profits of £354m, up from £295m a year earlier.

Results/updates: WM Morrison, Hilton Food, Carpetright, Genus, Home Retail.

FRIDAY: J D Wetherspoon is expected to release a robust set of results. The stock has been upgraded three times in six months by Investec Securities, highlighting increasing confidence in hospitality stocks. Investors expect to see a 7 per cent increase in pre-tax profits which have been bolstered by a debt reduction programme.

Investec analysts say that "recent updates from pub sector peers have been inconsistent and impacted by the variable summer weather". However, JDW is not as exposed to weather conditions as some of its peers.

The chain has been cashing in on the downturn, acquiring 37 new pubs, many because of freehold closures and bankruptcies.

Results/updates: JD Wetherspoon, SThree.

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