With fresh headlines claiming Mike Ashley will imminently seal a deal to sell Newcastle United Football Club there’s obviously a lot going on for the English leisurewear magnate, nonetheless, all of Sports Direct International Plc’s (LON:SPD) other shareholders will be keenly awaiting Thursday’s interim results.
Sports Direct said back in September that its outlook remains “optimistic”, largely thanks to better-than-expected trading in its new generation flagships stores and investors will be hoping of more of the same when it reports half-year results on Thursday.
At that time, the Derbyshire-based group said it expected to achieve underlying earnings growth of between 5-15% this year, so keep an eye out for whether that guidance has changed or not.
Retailers have been complaining of a weakening UK consumer environment in recent months, especially the ones with a high street presence, so it’ll be interesting to see if the FSE 250 company has been suffering as well.
The treatment of workers is a topic that just won’t go away and that’s likely to be the case again after a recent report showed Sports Direct underpaid more than 4,000 staff, so look for commentary on that.
Sports Direct’s independent shareholders on Wednesday blocked a proposed £11mln payout to Mike Ashley’s brother, with investors holding more than 70% of voting stock rejecting the plan for a payout to John Ashley at a special general meeting.
Sports Direct received heavy criticism from shareholders and corporate governance experts last year after it emerged the sportswear retailer was paying a company owned by John Ashley to deliver its online orders outside the UK.
The arrangement with Barlin Delivery Ltd, which was unwound earlier this year, had not been disclosed in Sports Direct’s annual report.
French deal a focus for Ocado, but organic growth strong too
The end of November saw Ocado PLC’s (LON:OCDO) shares soar after it signed a deal to licence out the patented smart platform technology that powers its distribution centres to French supermarket giant Casino.
A similar agreement had been signed in June, but November’s announcement was what investors had really been waiting for with the Casino tie-up representing significant progress compared to June’s deal with a mere regional supplier.
Details are still thin on the ground, and Hargreaves Lansdown equity analyst Nicholas Hyett does not expect the online grocery group to lift the lid when it issues a fourth quarter trading update next Thursday.
However, he said: “What we do anticipate in the Q4 update is further strong organic growth from the existing business. This may be less relevant to what the group’s future looks like, but another quarter of strong growth could improve the prospects for more of those all-important deals.”
UK rate focus after Fed
After the Federal Reserve meeting outcome on Wednesday night, the Bank of England's latest policy announcement on Thursday is likely to be less eventful as it is expected to stand pat on interest rates in spite of Tuesday's above-forecast reading for UK inflation. Instead, the focus will be on whether the Bank provides any hints about future rate hikes in its policy statement.
The BoE raised rates for the first time in nearly a decade in November in an effort to curb rising inflation but said it expects "very gradual" further increases over the next three years. The European Central Bank will also release its last policy deecision of 2017 on Thursday.
Significant announcements expected Thursday December 14:
Trading updates: Bunzl PLC (LON:BNZL), Ocado Group PLC (Q4) (LON:OCDO), Petrofac PLC (LON:PFC), PZ Cussons PLC (LON:PZC)
Interims: Omega Diagnostics Group Plc (LON:ODX), ReNeuron Group Plc (LON:RENE), Sports Direct International PLC (LON:SPD), Tungsten Corporation PLC (LON:TUNG)
Finals: Jersey Electricity PLC (LON:JEL), Titon Holdings PLC (LON:TON)
Economic data: BoE, ECB rate decisions; RICS UK house prices; UK retail sales; US weekly jobless claims; US retail sales
Ex-dividends: To clip 0.7 points off FTSE 100 index - Associated British Foods plc (LON:ABF), 3i Group PLC (LON:III)