Ocado PLC (LON:OCDO) is due to deliver preliminary results on Tuesday, not long after a December update on its UK joint venture with M&S.
The results will confirm how the FTSE 100-listed online grocery retailer is turning into an international player from its history as a loss-making partner for the likes of Waitrose and WM Morrison Supermarkets PLC (LON:MRW).
The focus will be on the Solutions division, where retailers pay Ocado to use its robot-operated warehouses and delivery systems, deemed a key source of future growth.
In November it signed a deal with Japan’s Aeon, which bodes well for the distant future but upped operating costs for 2019 by £25mln.
The analyst consensus is for sales to increase to almost £1.8bn from £1.6bn the year before, while pre-tax loss is expected to increase to £143mln due to costs associated with the new ventures.
While the shares have been trading largely sideways for the past 10 months, they are well above their ten-year average, analysts at Hargreaves Lansdown noted.
“That is a mark of confidence from the market, but also means the pressure is on to execute plans without any glitches.”
TUI cruising towards larger losses
A first-quarter trading update from TUI AG (LON:TUI) on Tuesday comes hot on the heels of the travel group’s spin-off of its German cruises arm.
On the downside downing of the Boeing 737 Max will brings cost headwinds and there is not expected to be the same hedging positives enjoyed this time last year.
Analysts at UBS forecast a group an underlying loss (EBITA) of €107m versus a loss of €83mln at this time last year.
“We expect the underlying tour operator business to show mid-high single digit bookings growth and low single digit pricing increase for the 2020 summer season leading to higher profits,” the analysts said forecasting flat profit in hotels and slight growth in cruise profits
They suggested key objects of investor interest will be underlying booking and pricing trends in the tour operator business post Thomas Cook's bankruptcy, cash burn during the quarter, updates on the 737 Max and the company’s strategy in terms of aircraft leasing, plus comments about potential regulation changes on the tour operator side of the business in the post Thomas Cook world.
“We believe the tour operators may need to increase the restricted cash associated with advance payments received.”
'Irrelevant' data?
Later in the morning there will be a mass of data delivered by the Office for National Statistics as part of its quarterly report on gross domestic product.
Analysts at RBC Capital Markets described it as “very close” to “irrelevant” as it covers the period mostly before the general election.
"Our expectation is that it will show that GDP was flat in the last quarter of 2019, which would leave full year growth at 1.3%.
“However, the GDP data largely covers the period prior to December’s general election, when we know that uncertainty around both the election outcome and Brexit dragged on activity.
“The focus now is on how the pickup in survey data seen post-election translates into the harder data on actual economic activity.
“And for a first glimpse of that, we will have to wait until next month’s monthly GDP estimate for January.”
This was not a controversial call, with Pantheon Macroeconomics also saying it "shouldn't have a major impact on markets" and that more important post-election data will be released before the Bank of England's next monetary policy meeting on 26 March.
Tuesday 11 February
Finals: Idox Group PLC (LON:IDOX), Ocado PLC (LON:OCDO), PJSC Polyus (LON:PLZL)
Interims: Diurnal Group PLC (LON:DNL)
Trading updates: AA PLC (LON:AA.), S&U PLC (LON:SUS), TUI AG (LON:TUI),
AGMs: BMO Capital & Income Investment Trust (LON:BCI), Keystone Investment Trust (LON:KIT), TUI AG (LON:TUI)
Economic data: UK GDP, UK industrial production, UK BRC retail sales, US NFIB smaller businesses confidence survey, US JOLTS job openings