The Week Ahead: Updates due from Marks & Spencer, Primark owner Associated British Foods, Halfords, Barratt and Bovis
- Credit: Archant
Marks & Spencer boss Marc Bolland will try to convince the City that his recovery plan is on track this week, despite an expected further fall in clothing sales.
The forecast decline in like-for-like sales of 1.5% for the 13 weeks to the end of June follows a disastrous 2012/13 for general merchandise when underlying sales were down 4.1%, offsetting much better trading in its food halls.
But M&S’s autumn/winter range, which goes on sale later this summer, has received good reviews following the appointment of a new fashion team.
Mr Bolland is due to face shareholders at the firm’s annual general meeting at Wembley Stadium on Tuesday, just hours after the update is published. Despite a fall in last year’s profits to £665million, there are signs that the City is prepared to give Mr Bolland more time with his turnaround plan and analysts on average expect pre-tax profits for the current year to rise to around £675m.
Primark’s recemt growth may lose steam when parent company Associated British Foods (ABF) reports on recent trading on Thursday.
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Analysts at Canaccord Genuity said the unseasonably cold spring and poor start to the summer could see Primark’s recent trading “disappoint,” with underlying sales growth set to slow to 6%, against 7% in the 24 weeks to the start of March.
Retailers’ sales of spring and summer fashion ranges were hurt by the second coldest March on record, with freezing weather lasting into April.
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Canaccord said: “Near term we are slightly concerned that like-for-like sales in the second half could disappoint.” Besides the poor spring weather, the first half had benefited from some exceptional factors that were not likely to recur, it added.
Elsewhere within ABF there are concerns that higher prices for sugar beet farmers could erode profits at its British Sugar arm.
An update on Wednesday from car parts and bicycle chain Halfords will be watched closely for any signs that trading is getting back on track after a year of falling sales and profits.
The group’s recently-hired chief executive Matt Davies unveiled a £100m revamp in May to turn the business around, with plans to refresh tired-looking stores and improve customer service.
But he has already warned it will not be a quick fix, with earnings unlikely to recover until 2016, but Cantor Fitzgerald analyst Kate Calvert said the recent sunnier weather in its first quarter may have helped bicycle sales, while there may be further good news from its Autocentres business after income lifted 13.5% in its last financial year.
Barratt Developments and Bovis Homes are set to join other housebuilders in reporting strong trading as Government stimulus schemes ignite the housing market’s recovery, with Bovis updating on half-year on Monday while its bigger rival Barratt reports its full-year performance on Wednesday.
Barratt’s underlying pre-tax profits for the year to the end of June are expected to rise to £182m, from £110.7m a year ago, while Bovis is expected to report a continuation of its recent trend of rising visitor numbers, reservations and forward sales.
Easyjet will try to face down a revolt by founder and largest shareholder Sir Stelios Haji-Ianonnou when it asks investors to approve the multi-billion pound purchase of up to 235 new Airbus planes.
The scale of the deal means the airline must win the approval of 50% of investors at a meeting due to take place on Thursday.
Sir Stelios, who with his family controls a near-37% stake in the airline, has attacked the proposed deal and urged fellow shareholders to join him in voting against it.