The Week Ahead: Primark is key growth engine at AB Foods

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The Independent Online

Hopes are running ahead of half-yearly results from Associated British Foods, with analysts expecting confirmation of continued growth at the company's Primark retail chain. In a pre-close update issued earlier this year, AB Foods said Primark sales over the six months to the end of February were "substantially ahead" of the year before, as store openings fed through and like-for-like figures strengthened across the business. "Like-for-like sales growth was 8 per cent in the half [year], and as our estimate was 7 per cent like- for-like growth for the first 16 weeks, this suggests growth accelerated towards the period end," Panmure Gordon said in a preview published last week. Including new space, the broker said it was looking for total sales growth of 18 per cent at Primark. Investec too expects to hear of "robust trading" at the chain. The sugar and groceries businesses should also support AB Foods, the broker said.

Today: Results/Updates: None.

Tomorrow: The City is broadly positive ahead of Tesco's full-year figures tomorrow, with JP Morgan Cazenove expecting the supermarket group to post a solid set of numbers relative to continental peers. The picture is likely to be more subdued in the UK, where Tesco is likely to show more moderate growth in earnings, given its more stable profile relative to the likes of Sainsbury's and Morrisons. Jefferies is looking for confirmation of good progress in Asia and on net debt, though, again, the broker expects only "muted" growth in the UK, with limited progress in Europe. The analysts at Nomura are more hopeful, anticipating a "strong relative uptick in UK trading", and expect Tesco to confirm progress on debt.

Taking their cue from LVMH's results last week, traders are hopeful ahead of Burberry's fourth-quarter update this Tuesday, with the high-end retailer expected to report progress in trading. Citigroup is also looking for signs of continued momentum, though the pace of like-for-like growth may have moderated from the third quarter owing to "a tougher basis of comparison and early store conversion to the Spring/Summer collection" against a period of strong promotional activity in the fourth quarter of 2009.

Also tomorrow, the online fashion specialist ASOS is due to issue a trading statement. Trends in the internet clothing retail space have been holding up well, and Panmure expects the news on current trading to be good.

The company may also benefit from increased brand awareness owing to the recent Diet Coke campaign, which has seen cans carry the ASOS logo since late February. "With around 48m cans of Diet Coke sold in the UK each month, this should significantly increase brand awareness, and competitions on each can should drive consumers to the ASOS website," Collins Stewart said. "Management has reassured us that marketing costs will not exceed guided levels."

Results/Updates: Reed Elsevier, ASOS, Burberry, Tesco and AFB

Wednesday: Panmure expects to hear of £122.5m in total sales, including unit trusts, on an annualised premium equivalent basis when the wealth manager St. James's Place issues new business figures for the first quarter. That would put sales close to the top end of expectations, which range from around £104m to £125m. Though the company is not expected to make any specific comment on new business margins, the continued move towards manufactured products will imply margin progression, the broker said, adding that business over the current quarter could be pressured by the general election. "Ahead of the election result, we suspect that some of SJP's client base will exercise caution when it comes to making investment decisions and as such second-quarter sales could be impacted slightly, although post 6 May there could be well be a catch-up."

Also on Wednesday, Game will issue preliminary figures. The video games retailer endured a tough 2009, and Numis expects trends to remain sluggish, anticipating a slow turnaround for 2010. For the year-to-January this year, the broker is looking for £88m in pre-tax profits, with like-for-like sales down by 14 per cent across the group. For the 12 months to January 2011, Numis expects "a further deterioration in [like for likes] of 10 per cent".

Results/updates: Senior, Hunting, Hochschild Mining, Game and St. James's Place.

Thursday: Results/updates: Anglo American, Filtrona, WH Smith, Smiths News, Bluebay Asset Management and Punch Taverns.

Friday: Results/updates: Morgan Crucible.