THE health of the high street will remain under the spotlight this week with updates from WH Smith and bookmaker William Hill.
A strong line-up of best-selling books may have provided a boost for high street retailer WH Smith over the Christmas season. The group saw sales slide 6% last Christmas after a weak selection of celebrity biographies dented trade.
But retail experts said it stood to benefit from a more promising line-up at the end of 2012, with top sellers including Jamie Oliver’s 15-Minute Meals, Is It Just Me? by Miranda Hart and JK Rowling’s The Casual Vacancy.
WH Smith’s personalised greeting card retailer Funky Pigeon may also have fared well over the period.
The market will be hoping that Wednesday’s update will show further signs of profit margin improvement, which is helping offset the impact of falling sales.
In October, WH Smith reported a 10% hike in profits to £102m, compared with the £135m loss it made in 2004. It therefore came as a disappointment to investors when chief executive Kate Swann announced last October that she was leaving in June, to be replaced by Steve Clarke, who is managing director of the high street division.
Bookmaker William Hill’s updates on trading having been in the spotlight in recent weeks over two deals expected to be transformational for the group.
It announced a recommended £485m offer for Paradise Poker firm Sportingbet last month, in a move with bid partner European gaming company GVC, which will significantly extend its international footprint.
Analysts at Panmure Gordon said: “Within 12 months, William Hill should have a global footprint encompassing operations in the UK, Australia, Spain, Italy and the US. We see a significant upside in all of these markets, with positive regulatory change and technological enhancement underpinning market share gains.”
Operating profits rose 26% in the third quarter, with online earnings surging by 42%.
Rival Gala Coral recently reported a 22% hike in over-the-counter takings throughout October and November thanks to favourable results.
Morgan Stanley is predicting William Hill to report underlying earnings growth of 17% for the final three months of its year.
Thursday’s update from low-cost airline easyJet comes after the group recently reported a better-than-expected 4.9% leap in the number of passengers flown last month. The carrier notched up 4.3 million passengers in December and said its load factor – or average amount of seats filled on its planes – rose to 87.9% from 85.6% a year earlier.
Airline experts are expecting a strong first quarter for easyJet on the back of recent encouraging traffic figures.
The group saw profits soar 28% to a record £317m in the year to September 30 as higher sales offset a further £182m surge in fuel costs.
It also saw revenues per seat rise by 7.5% to £58.51 with currency movements stripped out, helped by the success of its “Europe by easyJet” adverts – its first television ad campaign featuring images from award-winning photographer Elaine Constantine and music by indie band The Wombats.
Knorr-to-PG Tips giant Unilever is expected to confirm that its strategy to target emerging markets has helped offset weaker consumer demand in Europe when it posts annual results on Wednesday.
The group has been turning to fast-growing economies such as China and India to drive sales as demand in Europe falters.
Analysts are expecting Unilever, which also has brands including Flora, Marmite and Hellmann’s, to increase operating profits to £7.05bn in 2012 from £6.43bn a year earlier thanks to a predicted 6.5% hike in underlying sales.
