The week’s batch of retail results kick off with updates from two mid-cap companies on Tuesday - car parts to bicycles stores chain Halfords Group plc(LON:HFD) and speciality tiles firm Topps Tiles Plc (LON:TPT)
Halfords’ full-year results will be the first set of numbers to be presented since new chief executive Graham Stapleton joined in January.
The recent unseasonal weather is unlikely to have done much for the retailer’s bikes business, although recent weakness there could be offset by higher sales in the car parts and repairs division.
Sales have been growing but at a time when the weaker pound is making its imported stock more expensive, pressuring margins and leading to sliding profits.
Investors will be hoping to see signs that that trend is reversing, particularly with the (albeit temporary) pick-up in sterling earlier in the year.
Halfords is guiding for a full-year pre-tax profit of £71.4mln, but analysts at Deutsche Bank reckon there is a chance for a small beat, forecasting £72.4mln. They also reckon a special dividend “is possible”.
Topps Tiles full-year guidance eyed
Topps Tiles will release its first-half results, though since the company has already told investors what to expect the focus will be on its outlook for the rest of the year.
In a trading update in April, the retailer said total revenues rose to £109.4mln in the 26 weeks to 22 May, up from £106.6mln for the same period a year earlier.
Like-for-like revenues rose 0.6% in the period, compared to a 1.9% decline in 2017, with a strong first quarter offsetting a weaker second quarter.
The company said second-quarter sales were hit by the so-called ‘Beast from the East’, which brought snowfall and icy temperatures across to the UK from Siberia.
Many customers decided to remain indoors during the cold weather while the snow also affected deliveries and the ability of some people to get into work.
Topps Tiles also blamed an earlier Easter and tough UK retail market for the weaker sales in the second quarter.
"After a strong start to the year, market conditions have become more challenging over the second quarter," said chief executive Matthew Williams.
In a bid to boost sales, the group has been making improvements to its stores, website and product range. Market participants will be looking to see if these efforts to turnaround the business have started to yield results as well as any full year guidance provided.
Good reading at Bloomsbury Publishing
Among the small caps, books firm Bloomsbury Publishing PLC (LON:BMY) also gave a sneak preview of the next instalment in the series to a certain extent a couple of months ago.
It alerted the market then that it expected revenues to be ‘slightly ahead’ of expectations and profits to be ‘well ahead’ of expectations for the year ended 28 February 2018.
The Harry Potter series publisher also said its net cash balance is now expected to be around £25mln, ‘significantly ahead of expectations.”
The focus in the full-year results, therefore, is likely to be on current trading and its plans for IB Tauris, the acquisition of which was announced at the beginning of the month.
It is depressing to think that we are already having to start thinking about Christmas but from Bloomsbury’s perspective, the Yule-time line-up is crucial.
Prior to that comes the academic year, which with Bloomsbury having ploughed a lot of its Harry Potter windfall profits into that area is also a key season for the publisher.
Significant events on Tuesday May 22:
Interims: Topps Tiles Plc (LON:TPT), Greencore Group PLC (LON:GNC), Nostrum Oil & Gas PLC (Q1) (LON:NOGN), Oxford Biodynamics PLC (LON:OBD), Renew Group PLC (LON:RNWH), Shaftesbury PLC (LON:SHB), UDG Healthcare PLC (LON:UDG), Watkin Jones PLC (LON:WJG)
Finals: Halfords PLC (LON:HFD), Bloomsbury Publishing PLC (LON:BMY), Big Yellow Group PLC (LON:BYG), Entertainment One Limited (LON:ETO) First Derivatives PLC (LON:FDP), Homeserve PLC (LON:HSV), Intermediate Capital Group PLC (LON:ICP), Scapa Group plc (LON:SCPA), 1Spatial PLC (SPA), Schroder Real Estate Investment Trusts Limited (LON:SREI)
Economic data: UK public sector finances; Richmond Fed manufacturing index