Newspaper article The Journal (Newcastle, England)

WH Smith Investors Have to Wait for Swann Impact

Newspaper article The Journal (Newcastle, England)

WH Smith Investors Have to Wait for Swann Impact

Article excerpt

Byline: By Graeme Evans

Retailers will continue to dominate the corporate arena this week when companies ranging from Debenhams to Body Shop issue trading updates.

Retailer WH Smith is due to report a fall in full-year profits on Friday, although investors will have to wait a little longer to find out what new chief executive Kate Swann has in store to turn the group around.

Sales have been hit by tough competition, particularly the sale of cheaper CDs by supermarkets, as analysts forecast annual profits of around pounds 103m, down on last time when the figure of pounds 122 m represented an 8pc fall.

The company recently pulled out of the US by selling two businesses for pounds 49m, but future investor confidence is likely to hinge on the strategy of Ms Swann, the former boss of Argos who takes the helm at WH Smith next month.

Body Shop International's last update to the market offered disappointment on the sales front.

So Wednesday's half-year results announcement will be crucial in supporting hopes of a turnaround at the group.

While less discounting and tough trading conditions left like-for-like sales 8pc lower in the three months to May 31, Body Shop should still lift profits following an efficiency drive by its chief executive.

Peter Saunders took the helm in February 2002 following three profits warnings in 18 months, later lifting annual profits in April by 76pc to pounds 20.4 m.

Analysts expect profits this year to be around pounds 27m.

Prudential announced its first dividend cut since 1914 in July so sentiment among investors is unlikely to be particularly warm when the company reports new business figures for the third quarter on Thursday.

The latest data is expected to be solid rather than spectacular as the operating outlook for the Pru continues to be tough. In particular, analysts are concerned about adverse currency movements and lower margins.

Figures for the six months to June 30 showed the difficulties faced by the insurer in the current climate with operating profits down 27pc to pounds 397m and total insurance and investment sales stuck at pounds 15. …

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