Companies reporting w/c 4 January

We give our thoughts on what to expect from companies announcing results week commencing 4 January 2021.

Tuesday

Wm Morrison Supermarkets Plc: Q4 2020 Sales and Revenue Release – Trading Statement

The market is always keen to see how retailers performed in the run-up to the festive period. With most families stuck at home, expectations will be high for a significant rise in online shopping. The Group’s share price remains down by around 10% over the past year as a result of continued competition in the sector, especially from Aldi and Lidl, in addition to increased Covid-19-related costs. There has, however, been a recent rise in the Group’s market share to around 10.3%.

Next Plc: Q4 2020 Sales and Revenue Release – Trading Update

Updates from major high street retailers like Next will attract significant interest from investors, with the pandemic and the collapse of many large chains including Arcadia and Debenhams having shone a particular spotlight on the sector. That said, Next is not in the same position as them and, in fact, is widely regarded as one of the best-managed retailers in the UK. In October, the Company impressed the market with better-than-expected third quarter sales, although it forecast a drop in the final three months of the year. The market will be focused on that, as well as how online sales are performing and any change in the forecast for full-year pre-tax profits. Next previously indicated that it was expecting to make £365m this year; this is a big drop from the £750m it made last year, but better than many expected only a few months ago.

Friday

Barratt Developments Plc: Q2 2021 Sales and Revenue Release – Trading Update

Shares in many of the big housebuilders have performed strongly in the final quarter of 2020, and received a further boost from the announcement of a UK-EU trade deal recently. The sector has been helped by the fact that a lot of construction work has been able to continue through the pandemic, and house prices have remained resilient. In October, Barratts reported a good start to its new financial year with good forward sales, but investors are concerned that demand for houses across the sector may be impacted by the fact that unemployment levels are expected to rise and the government’s stamp duty holiday is due to end in March.

Marks & Spencer: Q3 Update

The main focus for the market in Marks & Spencer’s third quarter update will be the sales achieved through online orders in the run up to Christmas. The Company has increased its online capacity this year and began its grocery delivery service, owned jointly with Ocado, in September. Given the great success witnessed during the pandemic by similar services from other retailers, there will be high expectations for M&S in this area. More challenging for the Company is that clothing and homeware sales remain under pressure, and food sales may well have been impacted by the lockdown restrictions in recent weeks.

All information given including prices, yields and our opinion is correct at the time of publication. Our opinions on investments can change at any time and for our latest view please go to www.share.com. To understand how our Investment research team arrive at their views please read our Investment Research Policy.