Week ahead: High street back in focus as M and S and Next unveil figures

Published on Sunday 1 November 2009 19:18

A HOST of high street firms report figures this week, while half-year results from British Airways will provide the latest update from the embattled airline industry.

Retail bellwethers Marks & Spencer and Next will give a snapshot of high street trading conditions on Wednesday as the sector gears up for the crucial Christmas period.

M&S will no doubt be trying to steer the focus away from its corporate governance and succession issues with half-year profit figures. The group has been under scrutiny over its plans to find a candidate to replace Sir Stuart as chief executive next year.

Analysts are expecting interim pre-tax profits to remain down on a year earlier, at 285 million against 297.8m, however the 4 per cent fall would be far better than the declines seen at the full year stage.

Fellow retail giant Next updates the market on its sales performance for the 14 weeks to 31 October as it also enjoys a resurgent performance.

In September it upped its annual profits forecast for the third time in five months as it thanked better ranges and a welcome improvement in consumer confidence.

The group posted a 6.9 per cent hike in interim pre-tax profits to 185.5m after a better-than-expected performance in the six months to July.

Unilever – the consumer goods group behind brands such as Dove soap and Flora – will reveal whether it has maintained the momentum that recently led to its first sales volumes growth since last year.

Analyst Martin Deboo at Investec Securities expects Unilever to benefit from lower input costs. He is forecasting volume growth to have risen again to 3 per cent in the three months to the end of September, while profit margins will also have lifted.

Associated British Foods – which owns discount clothing retailer Primark – reports full-year figures tomorrow amid high expectations after it said growth at the fashion chain was set to boost earnings.

The group – which also owns Twinings, Kingsmill and Silver Spoon – said like-for-like sales rose 7 per cent over the year to 12 September.

Analysts at Jefferies are expecting full-year underlying net income to rise from 434m to 443m, although they forecast a 9 per cent drop in underlying earnings to 664m.

Solid trading updates from transport groups Go-Ahead and Arriva have put the pressure on Aberdeen-based rival FirstGroup ahead of its half-year figures on Wednesday.

The half-year figures are forecasted to show the impact of untimely fuel price hedges, which will add about 100m to fuel costs this financial year.

Analysts are pencilling in a 38 per cent plunge in interim pre-tax profits, largely due to the fuel costs. This is a worsening since the full-year stage, when profits fell to 94.2m from 120m a year earlier.

FirstGroup is taking action to slash costs, cutting thousands of jobs to save 200m by next March. Analysts expect the savings target to be increased.

British Airways is expected to reveal a slide into the red when it gives half-year figures on Friday in the wake of its first ever April to June loss since privatisation in 1987.

Analyst consensus forecasts point to a pre-tax loss of 252m for the six months to September on revenues of 4.13 billion.

The figures compare to the firm's pre-tax profits of 52m in the equivalent period last year, which marked a sharp year-on-year fall amid rising fuel costs.

BA, which is also in the grips of an acrimonious battle with staff over strike action, slumped into the red by 148m in the first quarter of the year.