Tuesday preview: Soggy showing expected from Marks

9th Jul 2012 15:56

It is a case of the old and the new when two retailers give trading updates on Tuesday.The old is Marks & Spencer (M&S), a stalwart of the UK High Street for as long as anyone can remember. The company will give a first quarter (April - June) trading update at its annual general meeting, and performance is expected to be soggy, as befits one of the wettest three month periods Britain has seen since records began.UBS thinks general merchandise like-for-like (LFL) sales could be down by as much as 7% from a year earlier. Performance in the food division may be a bit cheerier on the back of demand over the long Diamond Jubilee week-end.The new retailer on the block is ASOS, except it is not "on the block" at all - it is purely an Internet retailer. Like M&S, it will be reporting on the April to June period, and Panmure Gordon is tipping retail sales growth year-on-year of 30.9%, with UK sales up 8.0% and international sales up 48.0%, but notes that the consensus is for UK sales to be up 6.7% and international sales up 43.3%."Whilst the UK is up against a fairly stiff comp [comparative figures] (+15.1%), we note industry data which show UK online clothing sales growth of 1.0% in April rising to 8% in May. In addition, ASOS's re-pricing activity (begun in the second week of March) should provide a boost," Panmure Gordon said."The international revenue growth story has three parts: the US, where the company should be able to beat the exit rate (69%) seen in Q4, the EU, where trading is likely to continue to look challenging (although Germany seems to be opening up to online clothing more quickly than expected) and RoW [rest of world] where the comp is 353%. As the year progresses, the quarterly comps will become progressively easier," the broker notes.Building products distributor SIG is another company which, like M&S, will not have appreciated Britain's miserable run of weather, and the decline in the value of the euro will not have done it any favours either."Volatility is set to remain a feature of SIG due to the relatively diverse product and geographic base of the group?s operations," reckons Northland Capital Partners. "We expect the first half of 2012 to be a relatively weak period of sales recovery in continental markets but with little momentum. The leaner and fitter structure can at least offer a better operational gearing on any revenue growth. SIG's management is implementing a logical strategy of cash conservation (net debt down to £120m at end December 2011) and improved cost structures across all operations," the broker adds. QUARTERLY PAYMENT DATEXP Power Ltd. (DI)FINALSAccsys TechnologiesAGMS3i Infrastructure, Big Yellow Group, Intermediate Capital Group, Marks & Spencer Group, Young & Co's Brewery 'A' SharesTRADING ANNOUNCEMENTSASOS, Interserve, SIGUK ECONOMIC ANNOUNCEMENTSRICS Housing Market Survey (09:30)FINAL DIVIDEND PAYMENT DATEGreat Portland EstatesJH