WM Morrison (December trading statement)
The all-important Christmas trading update will be eagerly anticipated by followers of the sector. The company had a good 2016 with rising sales growth, and investors will be hoping that the momentum continued over the run up to Christmas and the new year.
Companies also reporting today include Carr’s Group (Q4 results)
Saga (Q3 results)
Management are keen to move the company away from its main insurance and holiday services to other areas, such as taking commission from third parties who will use the brand name and new services such as SagaMoney. There is potential for the group to continue to benefit from the increasingly important over 50s market and its brand name. Investors will be expecting to hear that the group remains on track to meet its full year targets.
Tullow Oil (Q4 trading update)
Shares in oil stocks have recovered along with the underlying prices of oil and Tullow is no exception, however these shares still have a long way to go to reach the levels of a few years ago. The group gave an indication that full year oil production would be around 64,000 – 67,000 Barrels of Oil Per Day (BOPD), but the group has had to downgrade this due to technical issues in the Jubilee and TEN fields earlier on in the year. Past oil hedging strategies have worked out well and investors will want updates on new hedging positions and also the management’s plans on capital expenditures and debt position.
Taylor Wimpey (Q4 trading update)
The house builders have generally provided good numbers despite the uncertainty that was supposed to have been created from the Brexit vote. Investors will expect higher completions, higher average house prices and greater distributions back through dividends. But key for the sentiment in the sector going forward will be investor confidence which will be reflected in the size of the order book and management’s plans on land bank and plot acquisitions. The general view here has been that housebuilders will take a more cautious approach on acquisitions for development.
J Sainsbury (Q3 trading update)
Like-for-like sales have been under pressure recently. Investors will be keen to see early signs of the effect of the Home Retail purchase and trialling of Argos outlets in Sainsbury’s stores, which has the potential to increase its exposure to non-food markets. Investors will be hoping that the group has maintained its market share. The share price has struggled to make any headway over the last two years as a result of growing competition.
Associated British Foods (Q1 trading update)
After weak Christmas trading at Next, markets will be watching Primark’s results closely. Investors will also be interested in progress in the US, where Primark opened its first store last year, and the impact of the falling pound on profits. There will also be interest in the company’s Sugar division, which saw a welcome rise in profits in full year results published in November. Investors will be keen to see any signs that this is set to continue into 2017.
Marks & Spencer (Q3 trading update)
The hard times for the sector continue as reflected in Next plc’s very disappointing trading update published on Wednesday which dragged shares of peers and competitors such as M&S down with them. Investors may expect the general merchandise division to continue to struggle, and management could cite the tougher trading environment, such as rising garment costs due to sterling’s fall and rising inflation. However, food and online sales should continue the trend of recent years. Management’s outlook for 2017 and Brexit uncertainties will be worth noting.
Tesco (Interim management statement)
There have been signs that management’s attempts to turn around the fortunes of the group are starting to bear fruit. Investors will be hoping that new initiatives will have attracted more Christmas shoppers and led to a further increase in like-for-like sales.
Companies also reporting today include Barratt Developments (Q2 trading update); Booker (Q3 trading update); Paysafe (Q4 update)
Announcements w/c 9 January
11th January, UK index of production: November 2016
In October, industrial production contracted by 1.3% month on month, while manufacturing contracted by 0.9%, also month on month, or so suggests data from the ONS. Did November see a better performance? The purchasing managers index covering UK manufacturing in November stood at 54.3, suggesting robust expansion, but then again, the index for October was even higher, showing how official data and the evidence of the surveys is not always in alignment.
11th January, UK trade, November 2016
The trade deficit in October fell to £2 billion, one of the smallest deficits for some time. However, the third quarter saw a £14.9 billion deficit, the widest since 2013. Did November see the deficit continue to narrow, benefiting from the cheaper pound supporting exports, or did it return to a more typical, higher level?
- EU Unemployment, November – Eurostat
• Profitability of UK companies: July to September 2016 – ONS