Trading figures will give snapshot of high street

Nov 2 2009 by Iain Laing, The Journal

A HOST of high-street firms report figures this week, while half-year results from British Airways will provide the latest update from the embattled airline industry.

Retail bellwethers Marks & Spencer and Next will give a snapshot of high- street trading conditions on Wednesday as the sector gears up for the crucial Christmas period.

M&S will no doubt be trying to steer the focus away from its corporate governance and succession issues with half-year profit figures.

Shareholders have been faced with rollercoaster earnings at the retail chain. In the 12 months to March 28 profits were down 40% on the £1bn posted the previous year.

But recent trading performance was the best for two years in a sign that the group’s fortunes may be changing.

It reported a smaller-than-expected 0.5% decline in like-for-like sales for the 13 weeks to September 26 – a marked improvement on the 1.4% fall in the first quarter.

Analysts are expecting interim pre-tax profits to remain down on a year earlier, at £285m against £297.8m. However, the 4% fall would be far better than the declines seen at the full-year stage.

Fellow retail giant Next updates the market on sales performance in the 14 weeks to October 31 as it also enjoys a resurgent performance.

It upped its annual profits forecast for the third time in five months in September as it thanked better ranges and a welcome improvement in consumer confidence.

The group posted a 6.9% hike in interim pre-tax profits to £185.5m after a better-than-expected performance in the six months to July.

Primark parent Associated British Foods reports full-year figures tomorrow amid high expectations after it said growth at the fashion chain was set to boost second-half earnings. The group said like-for-like sales rose 7% over the financial year to September 12, driven by strong trading in the UK.

Primark, the discount fashion chain which became known for its super- cheap clothes long before the arrival of the credit crunch, has seen strong expansion in the UK and Spain in recent years.

Better weather and a host of new openings in the second half had helped the chain as it was already capitalising on a consumer search for value.

British Airways is expected to reveal a slide into the red when it gives half-year figures on Friday in the wake of its first ever April to June loss since privatisation in 1987.

Analyst consensus forecasts point to a pre-tax loss of £252m for the six months to September on revenues of £4.13bn. The figures compare with the firm’s pre-tax profits of £52m in the equivalent period last year, which themselves marked a sharp year-on- year fall amid rising fuel costs.

BA, which is also in the grips of an acrimonious battle with staff over strike action, slumped into the red by £148m in the first quarter of the year against profits of £37m a year earlier.

The airline said costs had come down by 6.6% in the first quarter, but warned there was much more to be done.