The Week Ahead

THE WEEK AHEAD

WITH only a handful of companies set to report this week, all eyes will instead be on crucial Christmas trading statements from a clutch of retailers.

First indications are that this year was better than last, with anecdotal evidence suggesting there was a slow start to the beginning of December, building up to a very busy final week.

A key indicator as to the health of the high street will be the monthly sales report from the British Retail Consortium, due out late on Monday, and following on from its survey last week which showed that shoppers enjoyed a bargain Christmas.

Other recent indicators include the Confederation of British Industry's survey which revealed that retail sales growth accelerated slightly in December, although the rate of growth was lower than expectations.

Together, the evidence will be examined keenly by the Bank of England's Monetary Policy Committee in the run-up to its key interest rate decision on Thursday.

Economists are expecting rates to be held at 6%, despite the US's surprise decision to slash the cost of borrowing in America by half a point.

On the high street, hard goods and clothing are expected to have performed adequately, with retailers managing to control stock positions a lot better this year.

The level of post-Christmas de-stocking will vary, with Next - which gives its update on Thursday - expected to be in a much better position than Marks & Spencer, which reports the week after, stockbroker Gerrard said.

Other indicators on clothing sales will be provided by discount retailer TJ Hughes and department store Selfridges on Tuesday, and by Laura Ashley on Friday.

Eyes will also be on Great Universal Stores, owner of Argos, which issues its update on Thursday, for evidence of trading in goods from clothing to electrical items.

Analysts are expecting the two best sub-sectors across the retailing sector to be mobile phones and luxury goods, and expectations are that Burberry, which GUS is in the process of partially spinning off, will continue its upward trend.

Argos, among its wide range of goods, also sells mobile phones, and analysts will be keen to find out how sales have rung up over Christmas.

A good indication of Christmas retailing will also come from Dixons, which posts its half-year figures on Wednesday.

The company issued a statement at the end of December in connection with the proposed sale of its majority-owned Freeserve to France's Wanadoo, saying results would be broadly in line with expectations. Pre-tax profits are forecast to come in at #91 million, against #83m last time.

Amanda Large, analyst at Gerrard is looking for about 3% like-for- like sales growth in the UK. Top-selling items over Christmas are likely to have been widescreen televisions and DVD players, she said.

Away from the high-street, digital TV set-top box maker Pace Micro is expected to offer up a snapshot of how things are faring in the volatile "new economy" when it reports half-year results on Monday.

This time last year the company saw profits lift by more than 50% as people, particularly in the UK, raced to snap up the boxes, a trend that continued through to its full-year figures.

Interim pre-tax profits are forecast to come in at around #16 million, compared with #12.7 million last time, with the City particularly looking for a progress report on how the group is faring in expanding outside its core UK market.

Copyright 2001
Provided by ProQuest Information and Learning Company. All rights Reserved.