Wednesday preview: Sainsbury, Barratt Developments

Supermarket giant Sainsbury is to report its half-year results on Wednesday with all eyes on the bottom line.

Seymour Pierce is forecasting a 4.4% increase in first-half pre-tax profit to £370m and an interim dividend of 4.8p per share, up 6.6% year-on-year.

Revenue growth was already reported in last month's trading update, as the firm confirmed that like-for-like sales growth accelerated from 1.4% in the first quarter to 1.9% in the second. Total sales were up 4% in the first six months.

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Seymour analyst Kate Calvert said: "The market will be interested in any comments on the current competitive nature of the market and the outlook for inflation which is expected to pick up. Recent market share data suggests that Sainsbury continues to outperform the industry."

At Charles Stanley, Sam Hart reckons investors will be keen on an update on how new space the group plans to add. Sainsbury opened 330,000 square feet of new space during the period and current guidance is for 1m square feet (+5%) to be opened in the full year, Hart notes.

"Operating margin is expected to be broadly flat at 3.4%, with ongoing operational efficiency improvement offset by inflationary cost pressures. Current guidance is for full year operating margin to be flat, but potential is seen for margin to expand by 10-20 basis points per annum in future years as new space matures," Hart said.

There are 100 basis points to a percentage point.

House builder Barratt Developments issues an interim management statement covering the first quarter of its financial year. Peel Hunt, long a sceptical observer of the sector, reckons that there will inevitably be positive spin on the current trading, but concedes that Barratt will certainly still be doing well from its more substantial position in London.

"The major problem here is still the very poor returns on capital. The snapshot or period-end balance helps to understate how overcapitalised the balance sheet is with close to £1.3bn in average debt and land creditors. We still only see 4.5% return on investment capital for calendar 2013," Peel Hunt declared.

INTERIMS

Blinkx, Great Portland Estates, ICAP, Sainsbury (J), Speedy Hire, SSE

INTERIM DIVIDEND PAYMENT DATE

Centrica, Scisys, Standard Life

INTERIM EX-DIVIDEND DATE

Braemar Shipping Services, Cable & Wireless Communications, Charles Stanley Group, DCC, First Derivatives, Home Retail Group, Marks & Spencer Group, Panther Securities, Wynnstay Properties

QUARTERLY EX-DIVIDEND DATE

F&C Commercial Property Trust Ltd., GlaxoSmithKline, Henderson International Income Trust, M Winkworth, MedicX Fund Ltd., Royal Dutch Shell 'A', Royal Dutch Shell 'B'

INTERNATIONAL ECONOMIC ANNOUNCEMENTS

Business Inventories (US) (13:30)

FOMC Interest Rate Minutes (US) (19:00)

Industrial Production (EU) (10:00)

Manufacturing Inventories (US) (15:00)

MBA Mortgage Applications (US) (12:00)

Producer Price Index (US) (13:30)

Retail Sales (US) (13:45)

Retail Sales Inventories (US) (15:15)

Q3

Elringklinger AG, New Europe Property Investments, New World Resources A Shares

IMSS

Baratt Developments, Cape, Kier Group, Serco Group, SIG, Tullow Oil

SPECIAL EX-DIVIDEND PAYMENT DATE

Ryanair Holdings

EGMS

Dragon-Ukrainian Properties & Development, VietNam Holding Ltd

AGMS

Alternative Asset Opportunities PCC Ltd Red Ptg Prf Shs, Barratt Developments, Centaur Media, Henderson EuroTrust, IRP Property Investments Ltd., Oilex Ltd., Qatar Investment Fund

TRADING ANNOUNCEMENTS

Safestore Holdings

UK ECONOMIC ANNOUNCEMENTS

Balance of Trade (09:30)

BoE Inflation Report (09:30)

Claimant Count Rate (09:30)

Unemployment Rate (09:30)

FINAL EX-DIVIDEND DATE

Air Partner, Downing Absolute Income VCT 1, Downing Absolute Income VCT 1 'C' Shares , Edinburgh Dragon Trust, Fidelity Special Values, Henderson Fledgling Trust , Inland Homes, JPMorgan Smaller Companies Inv Trust, Lok'n Store Group, Petmin Ltd. (DI), Tristel, World Careers Network

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