Thursday preview: Results from AB Foods, Experian, Halfords, Royal Mail and Whitbread
Associated British Foods, Experian, Halfords, Royal Mail and Whitbread are among the big names reporting on what looks a busy Thursday for corporate news.
The RICS residential housing market survey is also due overnight, with the balance of surveyors reporting that house prices have increased over the last three months expected to remain at zero for December.
Going alphabetically, Associated British Foods is the retailer at the top of many investors lists and having risen more 2,000% over the last decade to a market cap of almost £23bn the Primark owner has a fond place in the hearts of many too.
Thursday sees the conglomerate scheduled to report on its first quarter, including a key period for its Primark 'fast fashion' arm and following a statement alongside its final results that the expansion of Primark's selling space will continue in the new year, with margins expected to be in line with 2017 to help increase retail profit.
For the grocery, agriculture and ingredients arms "progress" was expected, while in sugar, "higher volumes and lower costs will only partially mitigate the effect of much lower EU prices".
UBS forecast Primark LFL of 1%, with the numbers likely to show the scars of a warmer October and some recovery in November. For the UK, the Swiss bank expects 3% growth, with market share gains continuing from stronger fashion ranges, better value and range extensions into homewares, cosmetics and seasonal.
UBS will be looking out for any update on the EBIT margin outlook from the previous guidance, with a possible small decline in H1. "Flat guidance seems to incorporate a return to normal markdown levels after an exceptionally good year last year. Any sign that markdowns have remained low in the year to date could provide some upside risk. We do not expect any radical comments on the US either way, with rollout and closure both looking unlikely for at least the next 12 months."
For Experian's third-quarter update, Morgan Stanley forecast group organic growth of 5.7%.
UBS expects organic growth to begin accelerating after 12 months at 4%, to 5% this past quarter and 6% in the next. "We believe Experian is approaching an important inflection point after 18 months of <5% organic growth," analysts said, although they admitted they "may be slightly early".
Retailer Halford reports on its third quarter also, following a drop in interim profit announced in November as the weaker pound increased costs. In the 26 weeks to 29 September, underlying pre-tax profit fell 9.8% to £36.9m, although revenue was up 3.8% to £588.7m.
New chief executive, Graham Stapleton, who was poached from Dixons Carphone, took up his role on 15 January.
With much of Halfords ranges based being "needs-based", it "should prove relatively resilient in a soft UK consumer environment in 2018", said Deutsche Bank, foreseeing a relief from dollar sourcing pressures from the next financial year onwards.
With the new CEO only just in place, DB expects a continuation of the same service-led strategy which has been driving above trend opex and capex into the business.
Royal Mail will be reporting on its crucial Christmas period, with its share up 23% on the UK market since its early November trough.
Catalysts included the slow digestion of a robust H1 result marked by accelerating UK parcel growth, averted strike action during the sensitive peak season, and union leadership indicating that a pension/wage deal may be imminent, said JP MOrgan Cazenove.
"We believe this Thursday's FQ3 trading update is likely to provide further support in light of easing volume comparisons for both mail and parcels and likely positive commentary on peak season trading.
"While our unchanged price target now implies only 16% upside potential, we emphasize that it discounts a c.£100m pre-tax cash headwind related to ongoing pension/wage/working condition negotiations."
Whitbread will report its third quarter trading update, following first half sales up 2.3%, with Premier Inn up 3.6%, Costa up 0.6% and restaurants up 1.1%.
Morgan Stanley forecast group like-for-like sales to be up 0.6%, with Premier Inn up 1.0% and revenue per available room down 1.0%, Costa down 0.5% and restaurants up 1.0%. The forecast was for 6.6% total sales growth including a 6.0% benefit from expansion.
UBS forecast 2% RevPAR growth, restaurant LFL growth of 1% and Costa LFL growth of 1%.
Thursday January 18
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Continuing Claims (US) (13:30)
Crude Oil Inventories (US) (16:00)
Initial Jobless Claims (US) (13:30)
Associated British Foods, Bakkavor Group, Chemring Group, Evraz, Experian, Halfords Group, Headlam Group, Ibstock , Royal Mail, Ten Entertainment Group, Whitbread, William Hill, Workspace Group
Avacta Group, Cardiff Property, Equatorial Palm Oil, Keystone Inv Trust, Standard Life Equity Income Trust
FINAL DIVIDEND PAYMENT DATE
Beximco Pharmaceuticals Ltd. GDR (Reg S), Northamber
FINAL EX-DIVIDEND DATE
Autins Group, Compass Group, CYBG , Dewhurst, Dewhurst (Non-Voting), Dunedin Smaller Companies Inv Trust, easyHotel, Shaftesbury, Titon Holdings
INTERIM DIVIDEND PAYMENT DATE
Circle Property , IG Design Group
INTERIM EX-DIVIDEND DATE
Ashtead Group, Consort Medical, Fletcher King, Micro Focus International, Ramsdens Holdings , SSE, Superdry
QUARTERLY EX-DIVIDEND DATE
F&C Commercial Property Trust Ltd.