It’s all about food distributors and housebuilders on Wednesday.
Online grocer Ocado Group (LON:OCDO) reports its first half figures, which are expected to show a similar trend to its first quarter trading update in March when it reported a 13.1% increase in retail sales. However, the group faces the industry-wide pressures of rising food price inflation.
Numis expects a 5% rise in first half underlying earnings (EBITDA) to £38.4mln. The broker also said investors will be eager to hear any comments on the possible threat it faces from Amazon’s acquisition of Whole Foods and its recent trials of driverless deliveries.
“For our part, we see the outlook for Ocado UK Retail operation as encouraging, and continue to believe Ocado is developing the most advanced and economic end-to-end technology platform for third party retailers,” said Numis analyst Andrew Wade.
Booker Group's takeover by Tesco under the microscope as it reports trading update
Booker Group plc (LON:BOK) posts a trading update with the focus on any remarks regarding an investigation by competition regulators into Tesco’s planned £3.7bn takeover of the food wholesale operator. Last week Tesco asked the Competition & Markets Authority to speed up their probe into the supermarket’s proposed acquisition of Booker. If the watchdog gives the green light, the second phase of the process is expected to last about 24 weeks.
Booker reported a 0.5% rise in total sales for the 12 weeks to 24 March, as the group’s Budgens, Premier and Londis convenience-store brands performed well but tobacco sales were hurt by the tobacco display ban and new plain packaging restrictions.
Persimmon to report robust first half revenue
Housebuilder Persimmon plc (LON:PSN) is expected to report strong first half revenues in a pre-close statement, boosted by an improvement in volumes and an increase in average selling prices.
Deutsche Bank estimates a 5% rise in revenue with completions up 3% and selling prices up 2% on the previous year. No profits are likely to be released in the statement.
However, the bank noted the slowdown in the UK housing market as consumers are being squeezed by rising cost of living.
“Bearing in mind recent investor nerves on the health of the UK consumer, the tough comparables for Persimmon reservations (which becomes even more meaningful over the summer) may prove unhelpful to sentiment,” said Deutsche Bank.
“With a very strong cash position on the balance sheet and one of the longest land banks providing comfort on its dividend, we see the yield at Persimmon as one of the most conducive.”
In an April trading statement, Persimmon said its forward sales revenue, including legal completions taken to date, is currently £2.56bn, around 11% higher £2.31bn seen at the same stage in 2016.
McCarthy & Stone's second half under the microscope
Fellow housebuilder McCarthy & Stone PLC (LON:MCS) issues a trading statement, with analysts expecting the company to say the second half was bolstered by higher margin new sites.
In the first half the retirement housebuilder reported underlying operating profit of £24mln, down 20% year-on-year, as margins fell six percentage points to 10.1%.
Underlying pre-tax profit was £22.8mln, down 42%, reflecting a 13% decline in forward orders. UBS said this means the group will need to generate pre-tax profit of £78mln in the second half to meet consensus forecasts of £102mln.
“We expect commentary to focus on current trading conditions and how the second half will compensate for the 6% volume decline in first half, which has been the result of a lower forward order book brought into the year and lower number of sales releases.”
Announcements expected:
Trading updates: Booker Group PLC (LON:BOK), International Consolidated Airlines PLC (LON:IAG), McCarthy & Stone PLC (LON:MCS), Mattioli Woods plc (LON:MTW), Persimmon PLC (LON:PSN), SIG PLC (LON:SHI), Topps Tiles Plc (LON:TPT)
Interims: Ocado PLC (LON:OCDO)
Finals: Great Eastern Energy Corp Ltd (LON:GEEC)
Economic data: UK Markit/CIPS Services PMI