People could be upgrading their television sets to watch the FIFA World Cup, which recently kicked off in Russia, so investors will be hoping that the tournament might bring some badly needed relief for under-pressure electricals retailer Dixons Carphone Plc (LON:DC.).
The FTSE 250-listed stores group will release full-year results on Thursday having already warned in May that profit in the current year will fall by 21%.
READ: Dixons Carphone shares plunge as it warns current year profit to drop by 21%, to close shops
Dixon’s new chief executive Alex Baldock also revealed then that he plans to cut costs and close 92 of the company’s Carphone Warehouse stores to help improve gross margins.
However, the retailer’s issues were compounded recently after it revealed on 13 June that millions of its customers had had their card and personal details hacked.
The firm said it had launched an investigation after hackers accessed the credit and debit card details of 5.9mln Currys PC World and Dixons Travel customers along with the personal details of a further 1.2mln.
Analysts at Deutsche Bank said the full-year results may be a “non-event from a numerical perspective”, with the focus instead on whether Baldock makes any further comments on his cost-saving plans but they don't expect a more detailed update until December.
George Salmon, equity analyst at Hargreaves Lansdown, commented that Dixons' margins were “heading south”, which could be difficult to turn around while under pressure from online retailers like Amazon.com (NASDAQ:AMZN).
Fashion focus looks diverse
Elsewhere on the high street, fashion retailers Footasylum PLC (LON:FOOT) and Bonmarche Holdings PLC (LON:BON) will both report final results on Tuesday, but their situations look to be different.
Footasylum, which sells own and third-party brand trainers, hoodies and athleisurewear, said back in January revenues in the three months to the end of December 2017 jumped by more than a third to £89.8mln, up from £67.3mln, with trading in line with expectations.
City broker Liberum Capital kicked off its research coverage for Footasylum – which floated in November 2017 - with an effusive ‘buy’ recommendation.
Meanwhile, Bonmarche suffered an 11.1% decline in like-for-like sales for the three months to March, as the UK value womenswear retailer was hit hard by the ‘Beast from the East”.
Although online sales rose 31%, chief executive Helen Connolly described the backdrop as challenging and said more self-help measures were planned for this year.
Underlying growth good at Ashtead
Among the blue chips, international equipment hire firm Ashtead Group PLC’s (LON:AHT) final results on Tuesday should make better reading.
In a trading update in April, the FTSE 100-listed company said it was continuing to perform well, with full-year results expected to be in-line with expectations.
Analysts at UBS are expecting the group to report further strong underlying trading in the fourth quarter, with a forecast of 20.5% volume growth, and a weak pound potentially driving upgrades to consensus estimates.
The bank also predicts Ashtead reporting revenues of £3.6bn, with pre-tax profits seen at around £931mln.
Graham Spooner, investment research analyst at The Share Centre, said investors will be focused on any comments regarding prospects for Ashtead’s end-markets for the rest of the current year and the next.
He added that any update on Ashtead’s plans for equipment expansion, having already said it is investing heavily, would also be of interest to shareholders.
Better US growth to drive Ferguson
Plumbing supplies firm Ferguson Plc (LON:FERG) is scheduled to issue a third-quarter trading news on Wednesday, with UBS having raised its full-year estimates and price target in a recent preview to reflect a 6% appreciation in the dollar since its last update in March.
The Swiss bank expects the FTSE 100-listed firm - which changed its name from Wolseley last year to reflect the bigger prominence of its US operations – to report third-quarter organic growth of +7%, driven by organic growth in the US of +9%.
As a result, UBS said, it expects sales of US$5.023bn, underlying earnings (EBITA) of US$337mln, and margins of 6.7%.
The bank sees Ferguson’s performance in Canada and Central Europe to remain robust, with organic growth of +4%, and the UK to be weak, with organic growth of -3%.
UBS raised its full-year 2018 US organic growth rate to +8.5% from +8%, reflecting strong recent trading from peers which drives a higher expectation for the third quarter.
House price growth worry for Berkeley Group
Headlines this week claiming that London saw the lowest rate of house price growth, about 1% in April, will likely have raised eyebrows among Berkeley Group Holdings PLC (LON:BKG) shareholders ahead of upcoming fourth quarter results.
Nonetheless, The Share Centre - which rates the builder as a ‘hold’ - has highlighted that Berkeley’s share price has continued to perform well despite the worries over the UK housing market, especially in the South East where house prices have stalled.
“While the forward order book at the last update was stable, management have taken the stance that they should not seek to increase production at a great pace as they view the current macro-economic climate to not be supportive,” the online broker said in a preview note.
“The consensus view is for revenues to be up very modestly while reported profit growth should be in the low double digits.
“Investors should still expect good dividend payouts over the short to medium term.”
Bank of England seen steady
There seems to be little doubt that the Bank of England will keep interest rates unchanged at 0.50% on Thursday following the June Monetary Policy Committee (MPC) meeting.
However, there is a great deal of doubt as to what the Bank will do after the June MPC meeting, with markets pretty split down the middle as to whether the Bank of England will lift interest rates to 0.75% at the August MPC meeting.
Howard Archer, chief economic advisor to the EY ITEM Club, said: “It looks most likely that there will once again be a 7-2 vote in favour of unchanged monetary policy.
“The minutes of the May MPC meeting indicated that the committee believe that a gradual, limited tightening of monetary policy is warranted over the next two to three years given the perceived growth and inflation outlook.
“They also made clear that the MPC want to see how the economic data develops over the coming months to make sure that the first quarter slowdown in GDP growth was temporary, and to learn more about how the economy is evolving.”
Significant announcements expected:
Monday June 18:
Finals: Thalassa Holdings PLC (LON:THAL)
Economic data: US housing market index
Tuesday June 19:
Trading updates: Ferguson Plc (Q3) (LON:FERG)
Finals: Ashtead Group PLC (Q4) (LON:AHT), Accsys Technologies PLC (LON:AXS), Bonmarche Holdings PLC (LON:BON), Castleton Technology PLC (LON:CTP), Footasylum PLC (LON:FOOT), Gresham House Strategic PLC (LON:GHS), Telecom Plus (LON:TEP)
Interims: Benchmark Holdings PLC (LON:BMK)
Economic data: US housing starts
Wednesday June 20:
Finals: Berkeley Group PLC (LON:BKG), Best of the Best plc (LON:BOTB), Severfield PLC (LON:SFR)
Economic data: CBI industrial trends survey; US existing home sales
Thursday June 21:
Bank of England interest rate decision
Finals: Dixons Carphone Plc (LON:DC.)
Interims: Chemring Group PLC (LON:CHG)
Trading update: Saga PLC (LON:SAGA)
Ex-dividends: To clip 2.6 points off FTSE 100 - Compass Group PLC (LON:CPG), Experian PLC (LON:EXPN), Land Securities PLC (LON:LAND), United Utilities PLC (LON:UU.)
Economic data: UK public sector finances; US weekly jobless claims; US Philly Fed index; US house price index
Friday June 22:
Finals: Prime People PLC (LON:PRP)
Economic data: US flash composite PMI, Baker-Hughes rig count