The Week Ahead: Figures due from Sainsbury’s, TalkTalk and Vodafone

Mike Coupe, chief executive of Sainsbury's.

Mike Coupe, chief executive of Sainsbury's. - Credit: Archant

The City this week expects to see solid trading from Sainsbury’s in the under-pressure supermarket sector while telecoms firm TalkTalk will update investors about last month’s hack attack.

Sainsbury’s is expected to demonstrate resilient trading, when it posts its half-year profits on Wednesday, amid continuing pressure on the supermarket sector.

Analysts at Jefferies expect the grocer to report like-for-like interim sales down 1.6%, an improvement on a 1.8% fall in same store sales over the previous six months.

The supermarket, run by chief executive Mike Coupe, is forecast to post 22% fall in pre-tax profit to £293million amid weakening margins, with the industry having seen prices fall for more than a year.

The Big Four supermarkets – Tesco, Asda, Morrisons and Sainsbury’s – have been squeezed amid a fierce price war as they fight back against the increasing popularity of discounters such as Aldi and Lidl.

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Last Thursday Morrisons posted like-for-like sales down 2.6%, excluding fuel, for its third quarter to November 1, a steeper slide than the 2.4% decline seen in the previous three months, as it continued to cut back on promotional vouchers.

Some brokers had feared that Sainsbury’s would also be in for a tough time, expecting it would bear the brunt of an anticipated revival at Tesco where chief executive Dave Lewis has embarked on a shake-up since taking over a year ago following sliding sales under predecessor Philip Clarke.

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Howeer, Sainsbury’s was the only one of the major supermarkets to see sales rise, by 1.1% to a 16.1% market share, in the 12 weeks to October 11, according to the latest till roll figures from respected research group Kantar Worldpanel.

Having taken over from long-standing predecessor Justin King in July last year, Mr Coupe unveiled a wide-ranging plan to fight back against the discounters in November which included price cuts to 1,100 items and improvements in quality to 3,000 own-brand products.

Telecoms group TalkTalk is expected to update the City on the impact on sales and customer numbers at its interim results on Wednesday in the wake of last month’s hack attack.

Analysts at Citi said the firm will cancel its interim dividend and suspend its financial guidance until it can get a full grip on the hack on its computer systems.

Last Friday TalkTalk said the details of 156,959 customers and 15,656 bank account numbers were accessed in its recent cyber attack, but it emphasised the “information accessed cannot on its own lead to financial loss”.

It had earlier said it may have lost the personal details of up to 1.2m customers as well as up to 21,000 bank account numbers and up to 28,000 obscured credit and debit card details.

However, brokers at Citi estimate the impact of the bad publicity and the suspension of its website, which is a key means of selling products to customers, will see it lose around 200,000 accounts by the end of the full-year, leaving it with 4.1m customers.

The City forecasts the business will turn in half-year earnings of between £90m and £95m, around 16% lower than a year ago.

It is the third time that data from TalkTalk had been hacked in the last 12 months, and chief executive Dido Harding will have to answer critics who have called the attack relatively unsophisticated.

Investors expect to see further signs of improvement in the key markets of mobile telecoms giant Vodafone when it posts its half year results on Tuesday.

The City forecasts interim group earnings will slip 3.2% to £5.69billion, but expects to see service revenues rise by 0.9% as the group begins to see sales rise in key European market offsetting slowing growth in India and South Africa.

This will build on results in its first three months of the year in May when it reported its first quarterly revenue growth in nearly three years as conditions improve in many southern and western European markets.

The mobile phone giant saw a 0.1% rise in service revenues in the three months to March 31, with the UK up 0.6% after returning to growth in the previous quarter.

In the UK, growing demand for 4G services and the benefits of its £19bn Project Spring investment plan contributed to the best half yearly revenues performance since early 2012.

Shareholders will also want to know about the firm’s acquisition ambitions after the firm said in September that talks with UK-based cable firm Liberty Global over a potential asset swap had collapsed.

In June, Vodafone said it had entered discussions with Liberty regarding “a possible exchange of selected assets between the two companies”.

There had even been speculation that the two were considering a merger that would have created a £100bn telecoms giant, but Vodafone dismissed such talk.

However, analysts at JP Morgan said: “We suspect the saga is far from over given the strong strategic rationale for a deal, in an increasingly convergent world.”

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