Tuesday preview: Tesco, AB Foods, Burberry

19th Apr 2010 17:33

There is no shortage of opinions on how well retailing leviathan Tesco did in the year to end-February 2010, but most observers agree that Tuesday's results are going to hit new records in terms of sales and profits.Market consensus is for pre-tax profit of £3.21bn on sales of £58.5bn, up from profit of £2.95bn on sales of £54.33bn the year before."UK is forecast to report a 13.2% increase in trading profit to £2,695m, with operating margin progressing by 40bps [basis points] to 6.6%," according to Charles Stanley. "Like for like sales are forecast to be up by 3.0%, with growth slowing through the year as food price inflation has declined," the broker added. At the halfway point like for like sales were up 3.7% year on year.Charles Stanley's like for like (LFL) sales growth forecast is more cautious than a few of its broking peers, with some expecting LFL sales growth to be as high as 3.3%. The results will include Tesco Bank as a wholly owned entity for the first time after the company bought out Royal Bank of Scotland's 50% stake. Charles Stanley is forecasting the bank will contribute £245m to profits. Associated British Foods is bringing out interim results and, as per usual, the food group's somewhat anomalous Primark clothing chain is likely to be the star of the show.The market is expecting pre-tax profits of around £317m, with a strong contribution from the often overlooked sugar division."The UK sugar crop rose from 1.19mt last year to 1.3mt, and profits growth also reflects high factory efficiencies, lower energy costs and the strong euro," broker Panmure Gordon states.Sticking with the world of retail, Burberry's fourth quarter update should see sales hit £310m, Nomura Securities predicts, with like for like (organic) year on year growth turning negative (-3.5%), compared to organic growth of 12% in the preceding quarter."In Retail, we estimate sales of £173m (+9.7% organic, +0.9% reported); this compares with 3Q [third quarter] organic +16% and implies comparable store sales growth of +3% (vs 3Q +10%)," Nomura predicts. UK consumer price inflation is tipped to crawl higher to 3.1% in March having slipped back to 3.0% in February from the 14-month high of 3.5% in January.Core consumer price inflation is expected to hold steady at 2.8%.Underlying retail price inflation could advance to 4.4% in March from 4.2% in February, according to Dr. Howard Archer of forecasting agency IHS Global Insight. This is expected to be partly the consequence of higher housing cost components, Dr. Archer suggests.INTERIMSAssociated British FoodsINTERIM DIVIDEND PAYMENT DATEBritish Sky Broadcasting Group, Interior ServicesINTERNATIONAL ECONOMIC ANNOUNCEMENTSBalance of Payments(EU) (09:00)Balance of Trade (EU) (10:00)Current Account (EU) (09:00)Economic Sentiment Indicator (EU) (10:00)Interest Rate Decision (CA) (13:00)Producer Price Index(GER) (07:00)RBA Interest Rate Minutes (AUS) (00:00)ZEW Survey (GER) (10:00)Tertiary Industry Index (JPN)Machine Tool Orders (JPN)Convenience Store Sales (JPN)FINALSCadogan Petroleum, First Artist Corporation, ING Global Real Estate Securities, TescoANNUAL REPORTGlanbia, Portmeirion, Steppe CementIMSSBiocompatibles, Flying Brands, Raymarine, Reed ElsevierAGMSManagement Consulting Group, Modern Water, Slimma, Terrace HillTRADING ANNOUNCEMENTSASOS, Burberry Group, Creston, GB Group, Record, SABMillerUK ECONOMIC ANNOUNCEMENTSConsumer Price Index (09:30)Retail Price Index (09:30)