The Week Ahead: Snow and VAT expected to knock Wetherspoon

As the first pubs company to report on trading over the Christmas period, JD Wetherspoon is likely to excite considerable interest in the sector when it releases its interim management statement on Wednesday.

Not surprisingly, it will be December's poor weather conditions that are the focus, especially considering the mixed messages coming from the various retailers which updated the market last week. Pub groups such as Wetherspoon are particularly vulnerable to bad weather, given that missed spending is unlikely to have been made up at a later date.

Espirito Santo Investment Bank (BESI) is certainly not positive, noting that anecdotal evidence from independent pubs suggests that the trading days leading up to Christmas were badly hit by the heavy snowfall across the UK. As a result, the broker is expecting a "disappointing second-quarter performance", while Hugh-Guy Lorriman, of Seymour Pierce, believes a fall in like-for-like sales of between 1 and 2 per cent because of the weather "seems a not unreasonable inference".

BESI's analysts were also cautious about the immediate outlook, warning of the harm that could be caused to the group by the rise in VAT. "Our view remains that, relative to the rest of the pub companies, Wetherspoon is the worst-placed operator to pass on price inflation," they said, pointing to a BESI survey which suggested that Wetherspoon's core consumer was "more likely to cut spending or shift spend to the off trade".



Today

Results/Updates: None.



Tomorrow

The numbers included in Burberry's third-quarter trading update are expected to be positive, says JP Morgan Cazenove. It forecasts "a strong quarter for the luxury sector as a whole given ... executives' comments [that foreign exchange rates have] remained favourable to the traveller and US luxury datapoints".

The broker's analysts are predicting that underlying sales will increase by nearly 20 per cent, with retail sales up 36 per cent thanks partly to China. However, they note that takeover speculation has seen Burberry's share price rise significantly recently, and they therefore state that although "we continue to like the long-term equity story, valuation looks full and we see no near-term positive catalyst".

Results/Updates: African Barrick Gold, Burberry, Carphone Warehouse, Chemring, Experian, IG Group, Polymetal, Rio Tinto, SABMiller, Safestore and Taylor Wimpey.



Wednesday

A trading update from Pearson should see the publishing group provide investors with information on earnings ahead of next month's full-year results. Alastair Reid, of Deutsche Bank, believes that the company's current earnings per share guidance of 72p will be reiterated "at the very least ... and possibly could be upgraded".

Mr Reid is predicting that Pearson's Penguin Books unit will benefit in the fourth-quarter from strong e-reader and e-book sales, while strong advertising trends and increasing readership on new platforms should ensure robust profit growth at the Financial Times.

Results/Updates: Asos, Hochschild Mining, JD Wetherspoon, Land Securities, Pearson and William Hill.



Thursday

Associated British Foods releases its interim management statement, and analysts are expecting the market to examine two factors in particular – the state of the UK suagr beet harvest, and how ABF's discount clothing chain Primark performed over Christmas.

Martin Deboo, of Investec, says he finds the latter "hard to call", but is cautious about the former. He believes "there have been some snow-related impacts on the ... harvest that might have the potential to take a little of the lustre off the sugars story".

In terms of its share performance, Mr Deboo – noting ABF's strong recent run – says he continues "to feel positive about sugars, but now the debate shifts to valuation".

Douglas Jack, of Numis, is relatively optimistic about the interim management statement from Enterprise Inns, also out on Thursday, especially the numbers for the snow-hit festive period, which he believes will not be "as bad as was originally feared".

The pubs group is aiming to see flat like-for-like profits by the end of the financial year, achieved through a number of methods including tail-end disposals, but Mr Jack says that Numis's forecasts assume profits increasing from minus 5 per cent to minus 2 per cent by the fourth quarter.

Results/Updates: Associated British Foods, BHP Billiton, easyJet, Enterprise Inns, Invensys, Man Group, NCC Group and St James's Place.



Friday

Results/Updates: Close Brothers.

Economics Dairy:

Today: Rightmove house price index.

Tomorrow: Consumer price inflation; DCLG house price data; Retail price inflation; RICS house price survey; US Empire manufacturing.

Wednesday: Average weekly earnings; Claimant count, ILO unemployment rate; US MBA mortgage applications.

Thursday: CBI business optimism; CBI industrial trends; US existing home sales; US initial jobless claims; US Philadelphia Fed survey.

Friday: Retail sales.

Suggested Topics
PROMOTED VIDEO
News
ebooksNow available in paperback
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: C++ Developer – Hedge Fund – New York

$80000 - $110000 per annum, Benefits: Bonus and Employee Investment Scheme: Se...

Selby Jennings: Java Developer Enterprise Specialist –Paris,France

€30000 - €50000 per annum, Benefits: Competitive Bonus: Selby Jennings: Java D...

Selby Jennings: QA Engineer Lead – Hedge Fund – Chicago

$60000 - $90000 per annum, Benefits: Competitive Bonus and Employee Investment ...

Selby Jennings: Buy Side Sales / Account Manager – Fixed Income Market Data – Frankfurt Germany

circa 65,000 EUR + Bonus + Benefits: Selby Jennings: Recruiting a Sales Associ...

Day In a Page

In a world of Saudi bullying, right-wing Israeli ministers and the twilight of Obama, Iran is looking like a possible policeman of the Gulf

Iran is shifting from pariah to possible future policeman of the Gulf

Robert Fisk on our crisis with Iran
The young are the new poor: A third of young people pushed into poverty

The young are the new poor

Sharp increase in the number of under-25s living in poverty
Greens on the march: ‘We could be on the edge of something very big’

Greens on the march

‘We could be on the edge of something very big’
Revealed: the case against Bill Cosby - through the stories of his accusers

Revealed: the case against Bill Cosby

Through the stories of his accusers
Why are words like 'mongol' and 'mongoloid' still bandied about as insults?

The Meaning of Mongol

Why are the words 'mongol' and 'mongoloid' still bandied about as insults?
Mau Mau uprising: Kenyans still waiting for justice join class action over Britain's role in the emergency

Kenyans still waiting for justice over Mau Mau uprising

Thousands join class action over Britain's role in the emergency
Isis in Iraq: The trauma of the last six months has overwhelmed the remaining Christians in the country

The last Christians in Iraq

After 2,000 years, a community will try anything – including pretending to convert to Islam – to avoid losing everything, says Patrick Cockburn
Black Friday: Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Britain braced for Black Friday
Bill Cosby's persona goes from America's dad to date-rape drugs

From America's dad to date-rape drugs

Stories of Bill Cosby's alleged sexual assaults may have circulated widely in Hollywood, but they came as a shock to fans, says Rupert Cornwell
Clare Balding: 'Women's sport is kicking off at last'

Clare Balding: 'Women's sport is kicking off at last'

As fans flock to see England women's Wembley debut against Germany, the TV presenter on an exciting 'sea change'
Oh come, all ye multi-faithful: The Christmas jumper is in fashion, but should you wear your religion on your sleeve?

Oh come, all ye multi-faithful

The Christmas jumper is in fashion, but should you wear your religion on your sleeve?
Dr Charles Heatley: The GP off to do battle in the war against Ebola

The GP off to do battle in the war against Ebola

Dr Charles Heatley on joining the NHS volunteers' team bound for Sierra Leone
Flogging vlogging: First video bloggers conquered YouTube. Now they want us to buy their books

Flogging vlogging

First video bloggers conquered YouTube. Now they want us to buy their books
Saturday Night Live vs The Daily Show: US channels wage comedy star wars

Saturday Night Live vs The Daily Show

US channels wage comedy star wars
When is a wine made in Piedmont not a Piemonte wine? When EU rules make Italian vineyards invisible

When is a wine made in Piedmont not a Piemonte wine?

When EU rules make Italian vineyards invisible