The week ahead: FTSE 100 firms rush to report

A dozen blue-chips will update the market over the next few days, but will they be good enough to justify the recent rebound? Lee Wild talks through what to expect.

Monday 5 November

AGM/EGM

Ncondezi Energy, NB Private Equity Partners, Europa Metals, Verseon Corporation

Tuesday 6 November

Trading Statements

Smith (DS), Purplebricks, Weir Group, William Hill, Synthomer, Georgia Capital, Morrison (Wm) Supermarkets, Direct Line Insurance, Vesuvius, First Derivatives, Castleton Technology, Verona Pharma, Imperial Brands, Associated British Foods 

AGM/EGM

Craneware, Pacific Horizon Investment Trust, AIQ Limited, Supermarket Income Reit

Wednesday 7 November

At 303p, Marks & Spencer shares are up over 15% from the 262p post-EU referendum low in April and, after a period of chronic underperformance, have outperformed high street rival Next and online fashion retailers ASOS and Superdry since it published full-year results in May.

The shares have broken out of the downtrend from May 2017, although investors may require more proof that a turnaround, overseen by chairman Archie Norman and chief exec Steve Rowe, is on track before chasing the stock higher. 

Source: TradingView (*)    Past performance is not a guide to future performance

We haven't heard much from Marks since the annual figures – there were no first-quarter results – when it flagged a 62% plunge in statutory pre-tax profit due to some hefty write-downs, but a better-than-feared 5% decline in adjusted profit. 

And ahead of these half-year results, it's worth reminding ourselves of Rowe's optimism five months ago. He said:

"At our half year results in November I outlined the need for accelerated change at M&S. The first phase of our transformation plan, restoring the basics, is now well under way and the actions taken have increased the velocity of change running through our business. These changes come with short term costs which are reflected in today's results.

"There are a number of structural issues to address and we are taking steps towards fixing these. The new organisation will largely be in place by July and the team is now tackling transforming our culture to make M&S a faster, lower cost, more commercial, more digital business. This is vital as we start to leverage the strength of the M&S brand and values across a family of businesses to deliver sustainable, profitable growth in three to five years."

There are a number of big promises in there, and the market will be watching like a hawk for any slip-ups.

• Why M&S and Debenhams have a 'big hill to climb'
• 10 shares to generate £10,000 income in 2018

Don't expect much in terms of growth this time. This is all about getting the basics right, developing the digital offering and simplifying the business. Without firm foundations, this turnaround won't happen. 

Here are some of the key things to look for, according to analysts at UBS:

•    Clothing & Home (C&H) sales down 2.5%, or 1% like-for-like
•    Food sales down 0.5%, or 3% like-for-like
•    Food gross margin down 50 basis points
•    Interim dividend static at 6.8p
•    Timing of 100-plus planned store closures

"H2 may not be as bad as H1 with a stronger C&H gross margin, but there are probably downside risks to our flat profit before tax estimate in FY20 [£540 million versus £580.9 million in 2018] as we have small positive LFL in both divisions," writes UBS analyst Andrew Hughes. "The C&H gross margin could come under pressure given sterling's recent decline, while in Food the strategy is not yet fully formed. As seen elsewhere, the costs of channel shift seem never-ending, and M&S has plenty to fix in its digital offer."

Trading Statements

ITV, G4S, Persimmon, Apax Global Alpha, Sophos, Dairy Crest, Marks & Spencer

AGM/EGM

Redrow, Infrastructure India

Thursday 8 November

Trading statements

Inchcape, esure, Derwent London, Hikma Pharmaceuticals, Howden Joinery, IMI, Coca-Cola HBC, Sainsbury (J), TransGlobe Energy Corporation, National Grid, Tate & Lyle, Halfords, Auto Trader, AstraZeneca, Burberry, Inmarsat, JZ Capital Partners, Tracsis, Gattaca

AGM/EGM

Doric Nimrod Air One, Doric Nimrod Air Three

Friday 9 November

Trading statements

Informa, Morgan Advanced Materials

*Horizontal lines on charts represent levels of previous technical support and resistance. Red lines represent uptrends