Blue-chip heavy into hump day as Burberry and Antofagasta report

Updates will be coming thick and fast from both the FTSE 100 and FTSE 250 on Wednesday

Burberry clothing
Luxury clothing retailer Burberry could be heading for a slowdown in Q3

The blue-chips will be out in force again on Wednesday with luxury clothing giant Burberry set to report alongside mining heavyweight Antofagasta.

There will also be action from the FTSE 250 as WH Smith and Computacenter deliver trading updates.

For economic data, there will be the latest trade in goods data from the UK as well as industrial trends data from the CBI.

Across the Atlantic, there will be a few morsels in the form of the US house price index and the latest Richmond Fed manufacturing index.

Burberry sales growth expected to slow in third-quarter

If it isn’t Brexit, it is US/China trade war issues that have dominated market sentiment recently, and luxury goods firm Burberry Group PLC (LON:BRBY) is very exposed to sales in Asia and the US.

The blue-chip firm has been repositioning its brand to go more upmarket and the debut collection from new chief creative Riccardo Tisci in September was well received.

However, the full range of the new collection won’t be in stores until autumn so it will take some time see how well it feeds through to sales.

The fashion label posts its third-quarter results on Wednesday and analysts at Deutsche Bank expect sales of £724mln, compared to £719mln a year ago.

In the second quarter, like-for-like retail sales grew 3% and Deutsche Bank expects “the trends to consolidate at around 2% for the rest of the year, with Europe underperforming Asia and the Americas”.

Deutsche Bank said weaker expected retail like-for-like growth in the second half of the financial year is “unsurprising” given the disruption from the company’s brand repositioning, which is expected to last for another two to three quarters.

Gold, copper production bounce-back for Antofagasta

A pair of blue-chip miners will also provide production updates in the coming week.

Chile-focused Antofagasta PLC (LON:ANTO) has seen its shares struggle of late, tracking the downward trend of the copper price.

The widely-used metal has seen its price fall in recent months as demand dropped off – particularly from China, the world’s largest consumer of raw materials.

The FTSE 100-listed group has seen copper and production slump this year, largely as a result of lower grades.

But things have been improving of late - October’s update saw a 15% quarter-on-quarter rise in gold production, while copper production rose 43%.

Investors will want to see this trend continue, as well as confirmation that total capital expenditure came in at less than US$1bn last year.

Travel likely to lift WH Smith once again

Seeing the recent high street trends, travel will probably dominate the trading update from books to newspapers chain WH Smith PLC (LON:SMWH) again on Wednesday.

Analysts at UBS are forecasting for like-for-like sales growth of 1% for the 20 week period, with a 3% rise in WH Smith’s travel business - which operates stores in airports and railways stations - to offset a decline of 2% for the high street arm.

UBS noted that the travel segment may have dipped, however,  due to some disruption in UK airports, while high street sales will likely be impacted by weak November footfall.

The retailer’s gross margins are expected to grow by 40 basis points, while no changes to its outlook are predicted.

UBS also said there could be an update on InMotion, the US-based airport accessories retailer that WH Smith acquired for US$198mln in October as part of a push to boost its international travel business.

In its original announcement the firm said the acquisition would be earnings per share accretive in the first full financial year after completion, so any deviation will be eyed.

Computacenter looking to press reset after Q3 decline

Computacenter PLC (LON:CCC) will likely be aiming to provide some sort of reset in its pre-close trading update on Wednesday after its revenues dropped in the third quarter.

In October, the company blamed the 3% drop on “a significantly more challenging comparison", adding that the fourth quarter was expected to see “improved growth” but not to the levels seen in the first half.

Analysts at UBS said for the fourth quarter they are looking for Computacenter to report organic growth of around 10% to £1.4bn, above consensus forecasts of £1.3bn.

The Swiss bank added that while comparatives for the third quarter had been particularly challenging for the firm, they would ease off in the fourth quarter.

Investors will also be keeping an eye on any changes to the FTSE 250-listed firm’s full-year outlook after it was reaffirmed in October after an upgrade in July.

Significant announcements expected:

Wednesday January 23:

Trading updates: Burberry PLC (LON:BRBY), WH Smith PLC (LON:SMWH), Antofagasta PLC (LON:ANTO), Computacenter PLC (LON:CCC), CYBG PLC (LON:CYBG), Great Portland Estates PLC (LON:GPOR), Fresnillo PLC (LON:FRES), Petropavlovsk PLC (LON:POG), Brewin Dolphin PLC (LON:BRW)

Finals: McCarthy & Stone PLC (LON:MCS)

Interims: Harwood Wealth Management Group PLC (LON:HW.)

Economic data: UK trade in goods data; CBI quarterly industrial trends survey; US house price index; Richmond Fed manufacturing index

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