Thursday preview: Wm Morrison dividend in focus

10th Sep 2014 15:43

Tomorrow is “Super Thursday” for retail followers in the City, with interim results from FTSE 100 heavyweights Next and Morrison, as well as but also a quarterly updates from FTSE 250 pair Ocado and Home Retail, together with updates from small caps Dunelm and Darty and the privately held John Lewis Partnership.Starting with supermarket group Morrison, which is expected by the market to unveil half-year pre-tax profits roughly halved to £174m in the challenging grocery sector. News is expected on the group's new online offering, convenience store roll-out and its cost savings programme.On Tuesday Citi upgraded Morrison to 'buy' and said: "Negative sentiment on the name is already priced in, we believe. Some early signs of recovery are evident - market share has held up well post price cuts. Recent data also shows price position improving."Citi said it expected like-for-like (LFL) sales to fall 6.3% and underlying profit before tax of £177m.Hargeaves Lansdown suggested that following Tesco's profit warning and proposed 75% dividend cut, Morrison’s own dividend payment has moved centre stage, with rumours that it will also halve its interim payment.Morrisons is closely linked to Ocado, which last spoke to the market at its interim results, when the group reported earnings before interest, tax, depreciation and amortisation (EBITDA) up 19% to £34.3m, a touch ahead of consensus, with its new Morrisons deal adding £20.3m to gross sales and contributed circa £8.5m to EBITDA.Broker Numis lowered our its full year EBITDA estimate from £75m to £71m to reflect the tougher trading environment, a more second half-weighted marketing spend, increased IT headcount and some investment in strategic initiatives.Since then, the grocery market has remained challenging, with Kantar reporting market growth of just +0.8% for the 12 weeks to mid-August, the worst outturn for 10 years, and Tesco announcing a profit warning on 29 August."As a result, we see scope for the early Q3 momentum, to have slowed in the difficult conditions, although we continue to expect the group to be growing marginally ahead of the online grocery market."Analysts are also looking for continued strength in customer-facing statisitcs and efficiency measures, news on the successful progress of the Morrisons implementation, the launch of kitchen store Izzle and the impact of the new marketing spending.Over at Home Retail, analysts expect a mixed few months after the group's solid first quarter when Argos LFL sales were up 4.9% and Homebase drove LFL sales 7.9% higher.The consensus points to a slowing in LFL growth at Argos to 3.4% in the second quarter and around a 1%-2% fall in LFL sales at its Homebase stores.Thursday 11 SeptemberFINALSAshmore Group, Dunelm Group, RicardoINTERIMSCambridge Cognition Holdings, Deltex Medical Group, Elektron Technology, Fairpoint Group, Futura Medical, Gable Holdings Inc., Morrison (Wm) Supermarkets, Netplay TV, Next, SeaEnergy, Verona PharmaIMSSOcado GroupTRADING ANNOUNCEMENTSHome Retail GroupINTERIM DIVIDEND PAYMENT DATEInforma, Rio TintoUK ECONOMIC ANNOUNCEMENTSRICS Housing Market Survey (09:30)INTERNATIONAL ECONOMIC ANNOUNCEMENTSConsumer Price Index (GER) (07:00)Continuing Claims (US) (13:30)ECB Report (EU) (09:00)Initial Jobless Claims (US) (13:30)Treasury Budget Statement (US) (19:00)GMSLonminSPECIAL DIVIDEND PAYMENT DATEFresnilloAGMSAccsys Technologies, Daejan Holdings, Darty, Enteq Upstream, Entertainment One Limited, Mobeus Income & Growth 2 Vct, New India Inv Trust, Ortac Resources Ltd. (DI), Schroder Real Estate Investment Trust Ltd, South African Property Opportunities plc