Primark to prove there is life for retailers offline
Bakkavor and Morrisons among those joining the fashion chain’s owner in offering financial updates
Today’s trading statement is likely to confirm that shoppers have “enthusiastically reconnected” with Primark, the jewel in Associated British Foods’ crown, writes Jefferies.
Analyst James Grzinic said encouraging trading trends were likely to have continued through recent months, setting the scene nicely for its full-year results. “There is life offline after Covid-19,” he wrote – adding that rivals’ woes should further cement the discount fashion group’s market position. Furthermore, a “weakening consumer outlook” is likely to help Primark – with financially pressured shoppers more likely to seek out discount options.
Dechra Pharmaceuticals Trading statement Associated British Foods
Halifax house price index (UK); Labor Day holiday (US); trade balance (China)
Specialist food maker Bakkavor’s interim results are likely to be “muted” due to the effects of Covid-19, warns Goodbody’s Jason Molins. But investors shouldn’t be “overly pessimistic” on the group’s prospects, he says: most bad news is already baked into its price, the fall in which “looks overdone”. Keep an eye out for increased costs and pressure from retailers to reduce prices.
Also set to report tomorrow is builders’ merchant Travis Perkins. Although the group’s short-term trading is likely to be boosted by a post-lockdown activity rebound and strong DIY demand, a “weak macro and employment picture into 2021” is a cause for concern, says Royal Bank of Canada’s Andrew Brooke.
Despite those worries, Travis Perkins looks “well placed”, with the digital advantages subsidiaries Wickes and Toolstation have over competitors likely to allow for further market share gains.
Ashtead, Bakkavor, Cairn Energy, Fevertree Drinks, JD Sports Fashion, Meggitt, Signature Aviation, Travis Perkins, Vistry
Full-year DWF, McBride
DS Smith, Halfords
BRC retail sales monitor (UK); Q2 GDP final reading (Japan, eurozone); small business optimism (US)
IT specialist Computacenter already heavily teed up Wednesday’s first-half results, saying in a trading statement last week that it had seen strong trading momentum continue through July and August – adding that its
full-year performance would likely be “materially above” previous expectations.
Naturally, risks remain, and the FTSE 250 company’s victory lap might yet be overshadowed by investors keeping a close eye on its pipeline of upcoming work.
Interim results Computacenter, S4 Capital, Sanne Group, Tullow Oil
Economics Inflation (China)
“Judged without context”, some parts of Morrisons’ first-half results on Thursday may appear “rather weak”, says Barclays’ James Anstead.
The group is likely to have “something of a hill to climb” to reach full-year profit expectations, but it is clear the supermarket’s financials will look “much better” in the second half of the year.
One big question is over the group’s special dividend, he added: a pause now might set the FTSE 100 company up for a “sizeable” payout in the second half.
Energean, Forterra, Morrisons, Saga Full-year
Royal Institution of Chartered Surveyors housing survey (UK); European Central Bank monetary policy decision (eurozone); industrial production (France, Italy); jobless claims (US)
July GDP, trade balance (UK); inflation (Germany, Spain, US)
Associated British Foods, the owner of retailer Primark, will update the market today Interim results Trading statement