Market Preview is published daily an hour before trading kicks off on the London Stock Exchange, giving investors a roundup of macroeconomic and corporate news that is likely to move the markets along with the expected opening level of the FTSE 100.


Wednesday's agenda: Burberry tipped for 6% increase in LFL sales

July 09 2013, 6:30pm
Attention will be on first quarter like-for-like sales comparisons in the trading statement of luxury goods firm Burberry

After M&S got low marks and created few sparks with its trading update on Tuesday, fellow retailers Burberry and Halfords will be hoping for a better reception on Wednesday.

Attention will be on first quarter like-for-like sales comparisons in the trading statement of luxury goods firm Burberry, plus any clues on sales levels for the full year.

UBS, which has a neutral stance and 1480p price target for the flag carrier of British fashion, forecasts first quarter retail sales of £321mln, and a 6% LFL sales increase.

"Guidance for H1/FY will be updated, and for wholesale, we anticipate H1 guidance will be maintained, while net new retail space/licencing for FY14 are also likely to be reiterated," the Swiss bank said.

Bikes and car parts seller Halfords will also be disclosing first quarter sales figures and maybe full year guidance as well.

Peel Hunt is forecasting LFL sales growth of 3.2%, but notes that is against weak comparatives; a year earlier LFL sales contracted 7.5% year-on-year.

"After a weak Easter impacted by poor weather, we expect cycling sales to have picked up (+6%) over the quarter against -9.6% comparative," Peel Hunt said.

"We are keen to note the early performance of the new 15,000 sky cycling parts, accessories and clothing ranges, available online and, more recently, in some stores from June," the broker added.

Following on from Monday's update from Bovis, it is the turn of another house builder, Barratt Developments, to update the market.

Like most other house builders, Barratt should be having a rare old time of it, thanks to the government's Help to Buy initiative.

"Barratt FY 13 results are expected to report a strong trading environment with the benefit of an improving mortgage market continuing to drive upside in reservations. With a few more months of Help to Buy under its belt we hope upside to FY 14 guidance for volumes may be evident at these results," Deutsche Bank said.

UBS expects Barratt to forecast around £2.56bn of full year revenues, underlying earnings (EBIT) of £258.7mln and adjusted pre-tax profit of £84mln.

"We expect a FY13E private sales rate of 0.56 sales per site per week, implying the run rate over the last 8 weeks should be up c30% y/y following the introduction of Help to Buy. As a result of this we expect the private forward order book of c2100 units," UBS said.

Significant announcements expected

Companies: Finals: Igas Energy (LON:IGAS. Trading Statement: Barratt Developments (LON:BDEV) , Burberry (LON:BRBY), Halfords (LON:HFD). AGM: Booker (LON:BOK)

The following widely held stocks are trading in ex-dividend form: Vedanta, Murray International Trust, Caledonia Investments

Macroeconomic: EU: German Final CPI, French Industrial Production. U.S: Wholesale Inventories, FOMC Meeting Minutes, Federal Budget Balance.

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