God only knows whether we can look forward to further big M&A news on Thursday, but, we can predict with high confidence that there will be retailer headlines.
Trading updates from Tesco PLC (LON:TSCO) and Marks & Spencer Plc (LON:MKS) may be a bit pedestrian compared to Premier Oil PLC’s (LON:PMO) unexpected triple acquisition in the North Sea, or Anglo American plc’s (LON:AAL) swoop for Yorkshire mine-builder Sirius Minerals PLC (LON:SXX), which are definite New Year highlights.
Nonetheless, insights from supermarket sales over the Christmas period will likely prove decisive for investor and economic sentiments in the City.
So far this week WM Morrison Supermarkets PLC (LON:MRW) disappointed with sales and market share in decline, then on Wednesday J Sainsbury PLC (LON:SBRY) similarly said that its sales were on the slide – though elsewhere, Greggs (the baker) said annual underlying profit will be “slightly” higher than expectations thanks to a variety of factors, including its opinion splitting vegan products.
As the UK’s largest supermarket retailer Tesco is, arguably, the main event in the sector so naturally investors will be paying close attention on Thursday morning.
Tesco is currently benefitting from a share price surge following a restructuring headed by its soon-to-be-former chief executive Dave Lewis, who is due to step down in summer 2020.
Aside from the Christmas trading figures, investors will also be on the lookout for any news on the potential sale of the firm’s Asian business which could net it up to £6bn and raise the possibility of a special dividend for shareholders.
M&S hopes for a fresh start to 2020
Also joining the list of Christmas updates on Thursday will be food and clothing retailer Marks and Spencer Group PLC (LON:MKS), which will be hoping for a fresh start in the new year after a rocky 2019 that saw it relegated from the FTSE 100 for the first time in its history.
Shares in the firm are down 13% for the year, however, the stock is 30% higher than its Autumn lows thanks to signs of growth in the food business, a trend that investors will hope has continued in the key festive period.
But problems are still persisting in M&S's clothing and home division, with the company now predicting gross margins declines of between 0.25%-0.75% compared to the previous forecast of between 0.25% growth to a 0.25% decline.
Analysts at Peel Hunt are hoping that the solid Christmas performance from fellow retailer Next PLC (LON:NXT) may indicate that the high street had a more bearable Christmas, which could provide a little relief for M&S's non-food businesses.
The broker has also said like-for-like food sales "could surprise on the upside" but the shares still retained little interest as M&S continued its turnaround efforts.
Trading announcements:
Tesco PLC (LON:TSCO), Marks and Spencer Group PLC (LON:MKS), International Consolidated Airlines Group SA (LON:IAG), Card Factory PLC (LON:CARD), Dunelm Group plc (LON:DNLM), Mitchells & Butlers PLC (LON:MAB), Nichols PLC (LON:NICL)
Economic data: US weekly jobless claims
FTSE 100 ex-dividends to knock 0.04 points off the index: AVEVA Group PLC (LON:AVV)