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Whatever the UK government no-confidence vote outcome, investors will have plenty to chew over on Thursday

The Day Ahead will bring updates from the likes of Primark-owner Associated British Foods, a caffeine-free Whitbread, credit checker Experian, and software firm Sage
Primark store
Unlike Next, Primark doesn’t have a thriving online business to fall back on, so the market will be hoping the low-cost clothes retailer can buck the trend

The main focus might still be on the aftermath of the House of Commons’ Brexit deal no-confidence vote but it will also be a busy session on the corporate front on Thursday, with a big batch of diverse blue-chip updates.

After the slew of mixed Christmas trading statements from the High Street since the start of the year, discount clothing stores chain Primark will be front and centre when Associated British Foods plc (LON:ABF) publishes its first-quarter trading new.

Investors will, of course, keep an eye out for any updates on the troubled sugar business, but how AB Foods’ star asset performed over the all-important Christmas period will be the major focus.

The market has big concerns over the retail sector right now: November has widely been reported as the worst month for retailers in a long time and the 9.2% drop in store sales at Next PLC (LON:NXT) last month looks ominous.

Unlike Next, Primark doesn’t have a thriving online business to fall back on, so the market will be hoping the low-cost clothes retailer can buck the trend like it has done before.

But December’s update wasn’t as bullish as they have been in the past, with ABF warning that trading had been “challenging”. Still, bosses said they were confident in delivering another year of Primark profit growth and investors will want to see that that remains the case.

“We forecast 4% revenue growth for the first 16 weeks, in line with our FY19 estimate,” said UBS in a preview note.

“Following the AGM update of 7 December, we expect Primark LFL of -2%, although like some peers there may have been a modest recovery into December. Total Primark sales are expected to be up 4%.”

First look at a caffeine-free Whitbread

Among other blue-chip updates due Thursday, Whitbread plc (LON:WTB) will be keenly eyed, with the firm now a pure hotelier having completed the sale of its Costa coffee business to Coca Cola at the start of the year.

Most of the proceeds from that US$3.9bn deal will go back to shareholders through a buyback scheme due to start after Thursday’s third-quarter trading statement.

In the update, investors will hope to see a pick-up in occupancy levels at Whitbread’s low-cost Premier Inn hotel chain, with numbers having dipped in the first half.

“Weaker consumer demand” was cited as the reason that like-for-like sales only inched 0.2% higher in the period, and the company warned that the unremarkable performance so far could mean this year’s profits are lower than previous years.

In October, Whitbread said it was pressing ahead with plans to grow its number of rooms by 15% by the end of next year, but the market will be looking to see if the recent slowdown has changed that.

More of the same from Experian

Elsewhere, the end of last year proved to be a busy one for FTSE 100-listed credit score provider Experian PLC (LON:EXPN), which has gradually rebuilt its share price following October’s global equities sell-off.

Revenue rose 7% in the first half of its financial year, enough for the FTSE 100 group to lift its profit guidance slightly and hike its interim dividend.

Those results only came out a couple of months ago, but a lot has happened since then. The company most recently struck a £200mln deal to buy Compuscan – a leading credit bureau and information services business in Africa.

The African expansion move came just days after the UK competition watchdog raised concerns over Experian’s proposed £275mln takeover of US credit score rival ClearScore, a final decision for which is due shortly.

Experian’s latest trading update on Thursday should still reassure. In a preview, UBS analysts said: “We expect organic growth to continue at +8%, and for Experian to reiterate guidance for accelerating operating leverage.”

They added: “After raising growth guidance at H1 results, we have seen no deterioration in underlying credit market data while we believe Experian's new product portfolio continues to drive above-market growth.”

Comparatives not too hard for Sage

Blue chip accounting software group Sage is also due to provide a first-quarter update on Thursday, which will give the firm a chance to introduce its new CFO, Jonathan Howell, to investors.

In a preview, UBS said it reckons Sages faces “relatively easy comparatives” from last year.

“Recurring revenues exited 2018 with 7.2% growth in Q4 and was 7.0% in Q1 last year, so the comparative is not too hard, although [software-related services] was decent at +4% in Q1 last year,” the Swiss bank’s analysts said.

The update comes days after Sage said it has agreed to sell its US-based payroll outsourcing business Sage Payroll Solutions to iSolved HCM, LLC for around £78mln.

Significant events expected on Thursday:

Trading updates: Associated British Foods plc (LON:ABF), Whitbread plc (LON:WTB), Experian PLC (LON::EXPN), Sage Group PLC (LON:SGE), N Brown Group PLC (LON:BWNG), GVC Holdings PLC (LON:GVC),  Premier Foods PLC (LON:PFD), Game Digital PLC (AGM) (LON:GMD), DP Eurasia NV (LON:DPEU), SSP Group PLC (LON:SSP), Workspace Group plc (LON:WKP), Ibstock Plc (LON:IBST)

Finals: Chemring PLC (LON:CHG)

Interims: Ilka PLC (LON:IKA)

Ex-dividends to clip 2.9 points off FTSE 100 index: Ashtead Group PLC (LON:AHT), Compass Group PLC (LON:CPG), SSE plc (LON:SSE)

Economic data: EICS house price survey; US weekly jobless claims; US housing starts; US Philly Fed manufacturing index


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