Full-year results from J Sainsbury PLC (LON:SBRY) (LON:SBRY) will be closely-eyed on Wednesday for any further evidence of deteriorating conditions in the grocery sector after market leader Tesco PLC (LON:TSCO) raised margin worries with its annual results earlier this month.
In a trading update released on March 16, Sainsbury’s move to diverse from grocery with the acquisition of high street catalogue retailer Argos looked to be paying off as its total like-for-like sales grew by 0.3%.
READ: Supermarket sweep: Updates from Sainsbury's, Morrison's to be closely-eyed
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But in the nine weeks to 11 March 2017, a 4.3% increase in Argos like-for-like sales simply masked a 0.5% decline in Sainsbury’s struggling core supermarket business, excluding fuel sales.
For the full year, analysts at Deutsche Bank expect Sainsbury to report headline pre-tax profits of £592mln, up marginally from the £587mln reported a year earlier, as core retail margins – excluding Argos – decline by 30 basis points to 3.0%.
Tie-up news sought from Ocado
Internet grocery group Ocado PLC (LON:OCDO) will hold its annual general meeting which should attract interest following weekend press reports suggesting the group is closer to an online food service tie-up with high street giant Marks & Spencer Group PLC (LON:PLC).
With no reaction given to the reports by either party, shareholders could question Ocado about the possibility as well as possibilities for a long awaited international partnership, and will hope the firm reports a trading update at the same time.
Back in March, Ocado revealed that its gross retail sales grow by 13.1% in its first quarter, unchanged on the same stage in the previous year, as average order volumes rose but order amount fell reflecting pricing pressures as competitors such as internet giant Amazon.com Inc (NASDAQ:AMZN).
Updates from tobacco group and bookmaker also eyed
Away from the grocery sector, first half results from JPS cigarettes to Golden Virginia tobacco group Imperial Brands PLC (LON:IMB) are expected to be weak at constant exchange rates, as flagged in a trading update at the end of March,
Barclays Capital expects 2017 to be a year of two distinct halves for Imperial, with the first-half will likely to see organic revenue, profitability and earnings held back by upfront investments, while the second half “should see stronger growth supported by cost savings delivery and higher returns from investments. “
READ: Imperial Brands says “on track" to meet first-half earnings expectations
In a preview, BarCap’s analysts said: “We expect organic EBIT of -8.0% and headline EBIT at £1,619m. H1 margins are forecast down -130bps. “
They added: “With these factors in mind we forecast H1 Tobacco volumes -5.1%, organic revenue down -5.0% and reported revenue +9.0% to £3,706m; the latter supported by a 14% FX tailwind.”
And a first-quarter trading statement from merged, FTSE 100-listed bookmaker Paddy Power Betfair PLC (LON:PPB) is unlikely to surprise, with the group having provided with full-year results results on March 7.
In a preview, BarCap’s analysts said: “We expect a strong Q1 y/y EBITDA growth print as the Q1 comp is easier (Retail Q1 16 GWMs were soft at 10.7%).
“We don't expect the company to provide FY17 EBITDA guidance as the company usually provides this at the H1 results.”
Significant events expected on Wednesday May 3:
Finals: J Sainsbury plc (LON:SBRY), Inspiration Healthcare Group (LON:IHC), Osirium Technologies PLC (LON:OSI)
Interims: Imperial Brands PLC (LON:IMB); Indivior PLC (LON:INDV); Livanova PLC(LON:LIVN); Sage Group PLC (LON:SGE); Focusrite plc (LON:TUNE)
Trading updates: Paddy Power Betfair plc (LON:PPB); JD Wetherspoon PLC (LON:JDW); International Personal Finance PLC (LON:IPF); Intu Properties (LON:INTU); esure Group PLC (LON:ESUR); Carillion PLC (LON:CLLN); Direct Line Insurance Group PLC (LON:DLG)
AGMs/EGMs: Ocado Group PLC (LON:OCDO); Standard Chartered PLC (LON:STAN); Virgin Money Holdings UK PLC (LON:VM.); Renewables Infrastructure Group Ltd (LON:TRIG); Secure Trust Bank PLC (STB); Lancashire Holdings Ltd (LON:LRE)