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Sainsbury's to take top spot in company news diary on Wednesday

A trading update from the blue-chip supermarket will be delivered in the shadow of the collapse of its planned merger with Asda

Sainsbury's baskets
Analysts are expecting first-quarter sales to have fallen slightly from tough comparatives last year

After the Competition and Markets Authority scuppered plans for a £7bn merger with Wal-Mart Inc (NYSE:WMT) owned Asda earlier this year, the performance of Sainsbury’s core grocery business will be in focus in Wednesday’s trading update.

Boss Mike Coupe had pinned his hopes on the merger to drive growth and improve margins, but he will now have to come up with ways to do this organically.

That’s not an easy task in the current retail climate, with discounters Aldi and Lidl relentlessly chipping away at the Big Four’s market share.

Unfortunately for Sainsbury’s shareholders, analysts expect first-quarter sales to have fallen slightly, given the tough comparatives this time last year.

“With Q1 last year boosted by the football World Cup and a Royal Wedding, Sainsbury is up against a tough comparison – and that’s before we think about how the miserable weather has dampened sales,” said Hargreaves Lansdown equity analyst George Salmon.

Purplebricks looking to prevent more subsidence

Online estate agency Purplebricks Group PLC (LON:PURP) will be hoping to give investors at least something positive in its final results on Wednesday after a torrid year that saw the AIM-listed firm give the boot to its founder and chief executive Michael Bruce as well as UK CEO Lee Wainwright and US CEO Eric Eckardt.

It now falls to its interim boss, ex-Moneysupermarket.com managing director Vic Darvey, to try and shore up the firm and prevent any more subsidence in the shares, which have dropped by 70% over the past 12 months.

Investors will also be awaiting an update on the status of the group’s US business, which has been placed under strategic review, as well as the company’s ongoing exit from the Australian market.

In a trading update in May, Purplebricks said its revenues for the year ended 30 April would be between £130-140mln with a cash balance of around £60mln. With a potential restructuring ahead investors will be hoping the firm has enough firepower to back its plans.

Eyes on UK services PMI

The PMI data for the UK’s manufacturing and construction sectors released on Monday and Tuesday respectively have made for grim reading, with the ongoing Brexit impasse continuing to drag on economic performance.

Therefore, the PMI figures for the UK’s dominant services sector will be awaited with trepidation, although economists at RBC Capital aren’t expecting any of the data to change the outlook for second-quarter economic growth, which is currently expected to continue slowing.

Significant announcements expected for Wednesday July 3:

Trading update: J Sainsbury PLC (LON:SBRY), Electrocomponents PLC (LON:ECM), Topps Tiles PLC (LON:TPT)

Finals: Purplebricks PLC (LON:PURP)

Economic data: UK services PMI; US ISM non-manufacturing; US services PMI

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