Ahead of its results tomorrow, Marks and Spencer Group Plc (LON:MKS) has confirmed it will close 100 stores in the UK by 2022 as part of a major restructuring plan.
Of the total stores to be shut, 21 have already closed and 14 have been identified for closure.
The move marks an acceleration of a reorganisation that started in November 2016.
The announcement does not bode well for what has long been regarded as the bellwether of the UK high street.
In the final quarter of 2017, like-for-like (LFL) food sales in the UK declined 0.4% year-on-year, joining the Clothing & Home division in the ex-growth doghouse; the latter saw LFL sales decline 2.8% from a year earlier.
Credit Suisse has predicted a 4.5% decline in pre-tax profit to £539mln in fiscal year 2018/19, driven by weak like-for-like sales but with less pressure from foreign exchange headwinds. It estimates a 0.4% drop in like-for-like sales in clothing and a 0.5% increase in like-for-like sales in food over the whole year.
Severn heaven? Probably not
With core revenues being tightly regulated, there’s not much scope for results of the water companies to stray too far from expectations, so upcoming changes to regulation are likely to be the focus when Severn Trent issues its finals.
Ofwat’s price review is due to come in next year so the lobbying for a benign review will no doubt start.
Utilities are all about their dividend pay-outs, so investors will be hoping to see a strong grip on costs to keep the bottom line looking healthy.
Britvic to give its view on the early days of the sugar tax
FTSE 250-listed beverage maker Britvic Plc (LON:BVIC) releases first-half results with analysts at Numis Securities forecasting sales to rise by around 3.5% though they see earnings per share being flat.
The City broker also queried the potential impact of the recently introduced sugar tax in the UK:
“Whilst we think that it is too early for the full impact of the Sugar Tax, in the UK and Ireland, to be fully realised we will look for comments around the initial implementation and feedback from customers,” its analysts said in a note earlier this month.
They added: “Other key areas of focus are likely to be the performance of the new Robinson's range extension, an update on the progress of the US multi-pack Fruit Shoot penetration, the implications for H2 margins (if any) in light of recent moves in input costs, namely PET, aluminium and sugar and finally its view of the consolidation in the UK grocery retail market.”
On the macroeconomic front, traders will be preparing to pore over the minutes of the most recent meeting of the Federal Reserve’s policy makers.
“The statement at the time [May 2] arguably moved us incrementally in a more hawkish direction. It also included use of the word 'symmetry' in relation to the 2% inflation objective, so it'll be interesting to see if this is fleshed out at all. Indeed, our US economists saw the meeting statement as a first step towards altering the balance of risks language and expect to learn more from the minutes,” said Deutsche Bank.
Significant announcements expected
Finals: Marks & Spencer PLC (LON:MKS), Severn Trent PLC (LON:SVT), Dairy Crest Group PLC (LON:DCG), Babcock International PLC (LON:BAB), Great Portland Estates PLC (LON:GPOR), HICL Infrastructure Company Ltd (LON:HICL), Optibiotix Health PLC (LON:OPTI), Vedanta Resources PLC (LON:VED)
Interims: Britvic Plc (LON:BVIC), easyHotel PLC (LON:EZH), Hollywood Bowl Group PLC (LON:BOWL), Ixico PLC (LON:IXZI), Sanderson Group PLC (LON:SBD), Stride Gaming PLC (LON:STR), ZPG Plc (LON:ZPG)
Economic data: UK CPI, PPI, HPI inflation; US new home sales; US flash PMI composite index; US FOMC minutes