Thursday preview: Morrisons, Kesa, Redrow

9th Sep 2009 15:45

Supermarket chain Wm. Morrison may be number four in the UK in terms of turnover but it has been catching up fast since recovering from a bout of indigestion caused by the Safeway takeover.Thursday's interim results are expected to show pre-tax profits of around £360m - £366m, up from £309m a year earlier. The company has recently snapped up 38 stores from the Co-Op and a report on how these new stores are faring in the Morrison fold is expected. The company may also give an update on the next phase of its restructuring programme; Morrisons has been building new regional distribution centres and overhauling its IT systems this year.Stockbroker Nomura is predicting second quarter like for like (LFL) sales, excluding fuel and VAT, to show a 7.8% year on year improvement. It also predicts earnings before interest, tax and amortisation of £389m, 'implying a breach of the 5% margin barrier.'Charles Stanley is slightly more optimistic on the sales front, forecasting an 8% improvement in LFL sales. 'The strong sales performance will have been boosted by food price inflation, although this is expected to have declined through the period. Initiatives in range, pricing, store format and marketing will also have been important sales drivers,' the broker said.Comet store owner Kesa Electricals will give a first quarter trading update at its Annual General Meeting. The company announced full year losses back in June, though the dive einto the red was partly a result of one-off charges, and shareholders could do with a spot of good news. The recent trading update from Currys owner DSG International may offer some hope, Singer Capital Markets reckons.'Recent comments from DSG about stabilising market conditions, including White Goods which is a key area of strength at Comet, should be taken positively. In addition the recent GDP data from Central Europe including France should be a pre-cursor to stabilising sales trends there too,' Singer notes.The broker is expecting first quarter LFL sales to be down by around 10% or 11% from a year earlier, while LFL sales declines at French unit Darty are tipped to be in the region of six or seven per cent.In terms of speculation about the Bank of England's key lending rate the monthly meeting of the Bank's Monetary Policy Committee (MPC) has been a non-event for several months, but last month the MPC surprised the market with its decision to expand its quantitative easing (QE) programme by £50bn to £175bn. Some economists had been expecting no increase while others had forecast a £25bn boost.Economists received a further jolt when the minutes from the MPC meeting were released and it emerged that three members of the committee, including governor Mervyn King, wanted to boost the QE programme by even more, to £200bn.The possibility must exist, therefore, that tomorrow's announcement from the MPC will yield more surprises on the QE front, though it will take at least two members of the nine person committee to move over to the governor's camp for the MPC to decide to feed another £25bn into the programme.The MPC may well focus more on how long the QE programme will run for. Figures released on Thursday showed that activity in Britain's services industry grew for the fourth month in a row in August and at its fastest pace in almost two years, which is a sign that the recovery may take place quicker than the Bank of England feared. The recent upward revision to second quarter gross domestic product is another positive sign, and may persuade the three members of the MPC who petitioned for a bigger dose of QE last month that their more cautious colleagues may have called the economy more accurately.Steve Morgan, founder of housebuilding company Redrow has been back at the helm of the company for just two months, so Thursday's full-year results will give him the perfect platform to outline his proposals for reviving the fortunes of the company. As is often the way when a new management takes over, expect a lot of 'kitchen sink' items to be included in the accounts as the new team seeks to get all the bad news out of the way to establish a lower platform from which to build. INTERIMSHilton Food, Morrison (Wm.), Symphony Environmental TechnologiesFINALSAlumasc Group, Galliford Try, Genus, Leaf Clean Energy, Limelight VCT, RedrowAGMSAngle, Carpetright, IPSO Ventures, Kesa Electricals, Limelight VCT, Matrix Income & Growth 2 VCT, Matrix Income & Growth 2 VCT 'C' Shares, Polar Capital Holdings, Provexis, Puma Brandenburg, The Capital Pub CompanyTRADING STATEMENTSHome RetailUK ECONOMIC ANNOUNCEMENTSBoE Interest Rate Decision (12:00)NIESR GDP estimate (00:01)INTERNATIONAL ECONOMIC ANNOUNCEMENTSTrade Balance (USA) (13:30)Weekly Jobless Claims (USA) (13:30)Industrial Production (FRA) (07:45)Manufacturing Output (FRA) (07:45)Non-farm Payrolls (FRA) (07:45)Machine Orders (JPN)CGIP (JPN)FINAL DIVIDEND PAYMENT DATECarclo