Attention will be back on the retail sector on Thursday with Primark-owner Associated British Foods due to report, and fast-growing Internet retailer ASOS weighing in. Meanwhile, the 'pint and a punt' constituency are served by updates from brewer SABMiller and bookmaker William Hill.
ASOS's trading update covers its third quarter, and Panmure Gordon is anticipating that the group's UK sales will show year-on-year growth of 11% (consensus: +5%), while the small but fast growing International business could double its sales, in Panmure's view. Overall, the broker thinks total retail sales growth will be 49.9%, or 47.4% with postage and packaging and third party revenues included.
"In the UK, the clothing retailers had a strong December, particularly online. According to the BRC [British Retail Consortium], on 10th January, clothing and footwear had a 'spectacular' month of December. Even if these comments are related to bricks and mortar retailers, in our view it will have translated online. Amongst the unquoted retailers, House of Fraser online sales, of mainly clothing and accessories, grew by 124% in December for example. New Look also mentioned strong online sales in its Christmas trading statement last week," Panmure Gordon noted, while making no mention of clothing retailer Peacocks, which looks like it is heading for administration.
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"ASOS's online traffic ranking, according to Hitwise, moved from 19th to 12th in November 2011. However, according to IMRG data, November online clothing sales grew only 8% YOY [year-on-year]. It is important to note, though, that accessories, footwear and lingerie sales online grew by 40%, 27% and 23% respectively: ASOS retails across all of these categories," the broker added.
The same broker has also had a look at William Hill's pre-close trading update. Betting on an uplift in performance in December versus December 2010 should be a sure thing, as the tail-end of 2010 saw a lot of sporting events cancelled owing to the poor weather, but as for the bookie's performance over the fourth quarter as a whole, Panmure Gordon thinks a number of sporting results may have been too much to the liking of the punters; bookies prefer it when the favourite loses.
"At the Q3 [third quarter] update, YTD [year-to-date] group revenue was up 5% and group operating profit was down 3%. At that time, the group maintained it was comfortable with current market expectations of c£275m EBITA [earnings before interest, tax and amortisation]. For Q4 we expect the benefit from easier comparatives - due to 2010's high number of racing and football cancellations - to have been cancelled out by disappointing sporting results in 2011. Indeed, consensus EBITA expectations have edged down to c£272m," the broker observed.
For a company with the moniker Associated British Foods, a disproportionate amount of attention is focused on the food ingredients group's retail arm, Primark, but that's been the engine of growth for the last few years. At the November trading update there were signs that even the Primark powerhouse is finding things a bit tricky, as it coped with margin pressure caused by rising cotton prices. On the plus side, the company said commodity costs seemed to be subsiding.
INTERIMS
NCC Group
INTERIM DIVIDEND PAYMENT DATE
red24, Tarsus Group
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Balance of Payments (EU) (09:00)
Bloomberg Consumer Confidence (US) (14:45)
Building Permits (US) (13:30)
Consumer Price Index (US) (13:30)
Continuing Claims (US) (13:30)
Current Account (EU) (09:00)
ECB Report (EU) (09:00)
Housing Starts (US) (13:30)
Initial Jobless Claims (US) (13:30)
Philadelphia Fed Index (US) (15:00)
GMS
DP Poland
IMSS
Associated British Foods, Kesa Electricals
AGMS
Aberdeen Asset Management, Boomerang Plus, Urals Energy Public Co Ltd. (DI)
TRADING ANNOUNCEMENTS
ASOS, Premier Oil, SABMiller, William Hill
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