Effect of interest rates on retailers to be seen
THE impact of higher mortgage rates will be seen this week as investors are due to hear from a number of retailers, including B&Q owner Kingfisher.
Kingfisher is expected to post a modest increase in underlying profits on Thursday, but analysts will focus on the tone of the firm’s outlook amid fears of a growing squeeze on consumer spending.
Sales have already suffered after the summer washout saw shoppers shun traditionally strong sellers such as outdoor and garden products, sending B&Q’s like-for-like sales down 2.3% in the 10 weeks to July 14.
But analysts are expecting a solid set of results from supermarket chain Morrisons on Thursday despite recent signs of a sales slowdown.
The UK’s fourth largest supermarket group said wet weather and tough comparisons with last year’s World Cup had eased like-for-like sales growth to 3% in the 23 weeks to July 15. But the City is hoping for healthy interim figures after chairman Sir Ken Morrison added the group was making “good progress” towards ambitious cost and margins targets.
Pre-tax profits of £211m are predicted for the six months to the end of July - representing a 57% increase over last year.
Other companies reporting this week include: Tomorrow: Finals: Genus; Interims: Babcock & Brown, Bloomsbury; Wednesday: Finals: Dunelm, Ultimate Leisure, Interims: Moneysupermarket.com, ArmorGroup, Whatman, Woolworths; Thursday: Interims: Acertec, Cineworld, Premier Oil; Friday: Centaur Media, Wilmington.
