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Eyes on Marks & Spencer and Ocado as spotlight is set to remain on retail

Marks & Spencer's AGM day is set to be less eventful than usual, as it has decided not to provide a trading update.
marks and spencer stor
Elsewhere, Occado is likely to be more forthcoming after a 'spectacular' first half

Attentions will be on the retail sector on Tuesday, albeit for investors in Marks & Spencer Plc (LON:MKS) the day will be less illuminating than it might otherwise be.

Marks, on Monday, revealed it had decided to scrap its usual trading update at Tuesday’s annual general meeting. The AGM will be the first under new chairman, Archie Norman, and he reportedly wants to take a broader view of the struggling business.

Norman started as chairman last September to help lead a turnaround of M&S following sluggish sales in its ailing clothing divisions.

M&S is to close 100 stores by 2022 as part of a plan to move a third of its sales online in response to declining footfall.

The company last updated the market when it reported its full year results in May.

Shore Capital analyst Clive Black said it was "relatively unusual" for a company not to provide a trading statement at its AGM but M&S is not required to do so.

He added: “From a trading perspective it is clear that the UK high street has been somewhat volatile and more challenging than not with a cold spring followed by a warm early summer.”

Transformational first-half for Ocado

Online grocer Ocado PLC (LON:OCDO) has had a spectacular first-half, signing a clutch of important international deals for its Smart solutions platform, most notably with American retail giant Kroger Co (NYSE:KR) in May, and gaining promotion to the FTSE 100 index.

However, interim results on Wednesday from the online grocer - which is fast transforming into an international technology and fulfilment specialist – are unlikely to excite too much given that all the technology partnership deals (Kroger’s was its fifth in a year) coming with costs.

Ocado saw its first-quarter retail revenue rise by 11.7% to £363.4mln, against guidance for the current year of 10%-15% growth, although that was below the 2016-2017 growth rate of 12.4% with trading in the period impacted by wintry weather.

The firm’s average orders per week in the first-quarter rose by 11.1% to 280,000, up from 252,000 a year earlier, though order size declined slightly to £110.45, from £110.85 a year earlier, with inflation offset by reduced items per basket.

Tuesday July 10:

Trading updates: Marks & Spencer PLC (AGM) (LON:MKS), Robert Walters PLC (LON:RWA), Kier Group PLC (LON:KIE), ITE Group PLC (LON:ITE), Dechra Pharmaceuticals PLC (LON:DPH), Young & Co.’s Brewery PLC (LON:YNGA)

Interims: Ocado PLC (LON:OCDO)

Finals: AdEPT Telecom plc (LON:ADT), Begbies Traynor Group PLC (LON:BEG), Jaywing Plc (LON:JWNG), Photo Me International PLC (LONLPHTM)

Economic data: UK construction output; UK trade numbers; German ZEW economic sentiment survey; US JOLTS jobs


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