Market Watch: Burberry results to shed light on consumer spending trend

A BARREN period for corporate results will come to an end this week with the release of updates from consumer-facing firms including WH Smith and Associated British Foods, which owns Primark.

Meanwhile, Katherine Garrett-Cox – chief executive of Dundee's Alliance Trust – will unveil the fruits of her latest investment strategy in the firm's annual results tomorrow. In November, Alliance signalled it had upped its holding in equities again to more than 90 per cent, although market watchers will be keen to hear her latest views on the potential for the rally to crash.

Expectations are high for Tuesday's figures from AB Foods after the group predicted in February that half-year results would be substantially higher than a year ago.

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The group said in its last trading statement that results for the first six months of its financial year to 27 February would show strong sales and profits growth across its business, with brands such as Silver Spoon and Twinings Ovaltine leading the way.

Analysts are now expecting pre-tax profits of 317 million, up from 275m a year earlier.

Discount clothing chain Primark is expected to be the stand-out performer once more, after seeing better than forecast trading over Christmas.

Luxury goods group Burberry may add to hopes of a global pick-up in consumer spending on Tuesday. Analysts expect them to report underlying revenue up 4-6 per cent for the six months to 31 March after a first-half fall of 5 per cent.

Half-year figures from WH Smith on Thursday will reveal how the retail chain has fared throughout the tail end of the recession and tough high street conditions.

The group has not been immune to the woes that have hit rivals, with recent sales figures showing a 4 per cent decline on a like-for-like basis.

But its defensive qualities – with an average transaction cost of around 5 – have helped the group, as have moves to reduce its reliance on the highly competitive entertainment market, including CDs and DVDs.

The firm has instead focused more on its core books, stationery and confectionery markets.

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Analysts are expecting a small rise in half-year pre-tax profits to 61.5m, up from 61m a year earlier.

But Kate Swann, WH Smith's chief executive, may also face questions over her future plans after recent reports tipped her as a potential candidate to succeed Royal Mail boss Adam Crozier after his move to ITV.

Pubs group Punch Taverns reports half-year results on Thursday after surprising the market with news that its boss is to stand down after nine years with the group.

Chief executive Giles Thorley announced his departure plans late last month.

Thorley is seen as one of the pioneers of large modern British pub groups, having grown Punch to the leader in the sector during his tenure.

Punch, which has more than 7,600 leased and tenanted pubs, plunged to annual losses of 405.7m in the year to last August after slashing 663m from the value of its estate.

Week ahead

MONDAY

Alliance Trust (finals); Pace (trading update)

TUESDAY

Tesco (finals); Associated British Foods (interims); ASOS, Burberry, Reed Elsevier, SABMiller (trading updates)

WEDNESDAY

Game (finals)

THURSDAY

Punch Taverns, Smiths News, WH Smith (interims); Persimmon (trading update)

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