Newspaper article The Journal (Newcastle, England)

Tesco Juggernaut Ready to Deliver Huge Profits Again

Newspaper article The Journal (Newcastle, England)

Tesco Juggernaut Ready to Deliver Huge Profits Again

Article excerpt

Byline: By David Winning

Supermarket chain Tesco will lead blue chip stocks reporting results this week with companies in the technology and banking sectors also due to update investors on trading.

Tesco has produced a series of stellar trading updates in recent months and analysts are hopeful that its full year results tomorrow will again beat expectations.

The group reported like-for-like sales growth of 7.5pc in the seven weeks to January 3 and recent market data has suggested that its dominant grip on the food retail industry has tightened. Full year profits of pounds 1.67bn are expected, up from pounds 1.4bn a year ago.

Investors will also want an update on how Tesco has been using pounds 750m raised in a placing of new shares - as well as its outlook in the wake of the Morrisons takeover of Safeway and consolidation in the convenience store sector.

Drinks giant Allied Domecq is set to shake off the impact of the weak US dollar and post a rise in pre-tax profits to pounds 270m for the six months to the end of February, compared with pounds 256m a year ago.

The announcement of its half year results on Thursday should contain news on how its major brands are performing. In January, it reported that Makers Mark, Stolichnaya vodka and Sauza tequila were all showing good organic growth in the United States.

There has been a solid recovery in Spain after the destocking of inventories by wholesalers there last year, but conditions remain tough in France and Germany. Investors will also want to know whether sales have improved in Korea and Mexico, which are important markets for the group.

A poor Christmas trading performance at retailer WH Smith is likely to be reflected in its interim results announcement on Thursday, with pre-tax profits expected to fall to pounds 65m from pounds 91m a year ago.

But the attention of investors will be trained on the results of the operating and financial reviews instigated by chief executive Kate Swann, which could include the number of jobs to be lost at the retailer's head office in Swindon.

However, questions about WH Smith's long term competitive stance are unlikely to be answered. …

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