Thursday preview: M&S reports trading update

Marks & Spencer will on Thursday update the market on its trading, two months after revealing drastic measures to turn around the struggling general merchandise division.

At the retailer’s full year results in May, new chief executive Steve Rowe announced the company would cut prices on its clothing across 30% of its range. He warned that current profits would be hit by the plan.

His remarks came as M&S reported a 3.5% increase in full-year profits to £684.1m in the year to 26 March. Sales rose 0.8% to £10.4bn, as an increase in food sales offset another disappointing year in general merchandise (GM).

“With cost guidance of +3.5%, we lowered our full year 2017 pre-tax profit estimate to £627m,” said Numis.

“Looking ahead to the first quarter, we expect Food like-for-like (LFL) sales to remain flat, while we see scope for the GM LFL run-rate to come in below that anticipated for the full year – first quarter has the toughest comparatives, there were unfavourable weather trends in April and June, and BHS had clearance activity; against this, material investments in price are clearly starting to come through, which should begin to boost volumes.”

Numis added that it believes the long-standing issues in GM will “prove difficult to solve” but the shares appear to be offering value following Britain’s vote to leave the European Union, trading on around 10x calendar year 2017 earnings.

Thursday 07 July

INTERIM DIVIDEND PAYMENT DATE
Cardiff Property, Income & Growth VCT

INTERIM EX-DIVIDEND DATE
Character Group, Dewhurst, Dunedin Smaller Companies Inv Trust, One Media IP Group, Safestore Holdings, Sherborne Investors (Guernsey) 'B' Limited, Zytronic

QUARTERLY EX-DIVIDEND DATE
Fair Oaks Income Fund Limited , GLI Alternative Finance , Investors Capital Trust 'A' Shares, Schroder Income Growth Fund, SQN Asset Finance Income Fund Limited C SHS NPV

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Industrial Production (GER) (07:00)

FINALS
NCC Group, ReNeuron Group

IMSS
Dunelm Group

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Establishment Inv Trust, Stock Spirits Group

AGMS
3i Infrastructure, Adgorithms Limited (DI), Atalaya Mining, C&C Group, China Africa Resources, Great Portland Estates, Maven Income & Growth VCT, Octopus AIM VCT, TwentyFour Select Monthly Income Fund Limited

TRADING ANNOUNCEMENTS
Associated British Foods, Dunelm Group, Great Portland Estates, Marks & Spencer Group, Premier Oil, Robert Walters

UK ECONOMIC ANNOUNCEMENTS
Halifax House Price Index (08:30)
Industrial Production (09:30)
Manufacturing Production (09:30)

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Arrow Global Group, Cineworld Group, Huntsworth, JPMorgan Euro Small Co. Trust, Mears Group, Tarsus Group, Young & Co's Brewery 'A' Shares

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Amati VCT , Atkins (WS), Bisichi Mining, Burberry Group, Calculus VCT 'C' Shares, Crawshaw Group, Dairy Crest Group, E2V Technologies, Entertainment One Limited, Establishment Inv Trust, Homeserve, IG Design Group, Impellam Group, Mission Marketing Group, Monks Inv Trust, Next, Palace Capital , Pennon Group, Speedy Hire, Sprue Aegis, TalkTalk Telecom Group , Telecom Plus, ULS Technology , Vedanta Resources, VP, Wincanton, Workspace Group