Thursday preview: Unilever and Sports Direct results in focus

Half year results are due from Unilever and full year numbers from Sports Direct, while the Office for National Statistics will confirm official retail growth for last month.

At the start of this month Unilever shares hit a seven-month high, despite the company warning that it will probably have to drop out of the FTSE 100 once it moves its headquarters and scraps its dual Anglo-Dutch corporate structure.

But this followed a confident first-quarter statement in April and was mostly due to the beginning of a €6bn share buyback programme in May, meaning the shares are trading well above the £40-a-share bid offer received from Kraft-Heinz two years ago.

However Unilever warned at a recent conference that organic revenue growth in the first half of the year will be below the bottom end of its 3-5% medium-term guidance range, partly due to the €150m or 1% impact from a Brazil trucker strike.

For the first half, analysts are looking for a headline sales figure of €26.5bn, down nearly 5% year-on-year, thanks to currency movements and disposals. In the second quarter the consensus forecast is for 2.2% underlying sales growth, a deceleration from the 3.4% seen in the first.

Deutsche Bank said investor focus will be on management’s commentary around organic top-line growth in the second half with a particular focus on the price/ volume composition.

DB forecasts second quarter sales down 4.9%, as organic top-line growth of +1.9% and a positive contribution from acquisitions (+1.8%) should be more than offset by a negative contribution from currencies.

UBS forecast 2.6% organic sales growth in Q2 virtually all from volume growth and prices around flat. "We believe Unilever might be able to recover some of the lost sales during the quarter, leaving room for upside. We also highlight the positive impact of good weather on Unilever's ice cream and personal care businesses."

Retailer Sports Direct will put out final results, with investors having had no update on trading since interims in December. The group owns a 29.7% stake in struggling department store group Debenhams, so investors will be hoping for an update on the strategic investment portfolio from boss Mike Ashley.

"This will be a very important set of numbers for Sports Direct," said Hargreaves Lansdown, seeing the half-year update as showing "some early signs of success" on Ashley’s strategy to elevate the company's offering as underlying profits grew despite a sluggish UK performance.

"However, recent conditions on the UK high street have been dire, to put it mildly. The success of the England football team and a bout of nice weather will have done the group a favour, but the plan to become the 'Selfridges of Sport' still needs to deliver results."

Defence contractor Babcock International will provide a trading update ahead of its AGM, following a typically quiet period and May's full year results that showed PBT up 4% to £512.5m.

The outlook for the current year is for low mid-single organic revenue growth with broadly stable margins and net debt at 1.4 times EBITDA at year-end.

"The AGM update is typically brief, disclosing revenue visibility for the current and following year (82% and 55% at the point last year), the size of the order book & pipeline (£18bn and £13bn respectively at the FY18 finals) and year-end leverage expectations," said broker Peel Hunt.

MACROECONOMIC NEWS

Official retail sales data is due from the Office for National Statistics, following the strong rebound in April and May after the weak first quarter when spending was hit by snow.

On the back of the 1.8% month-on-month rise in April and 1.3% in May, the market expects a smaller monthly gain for June.

Total retail sales are seen growing 0.4% on the month, leaving year-on-year growth at 3.9%. Excluding fuel, retail sales are forecast to grow 0.3%, with the annual rate of growth slowing to 3.7% from 4.4% in May.

"Normally, after such a strong couple of months, we would expect a fall back," said HSBC. "However, all the indications are that June was another strong month, against a backdrop of a heatwave and a FIFA World Cup in which the England team enjoyed an unfamiliar run of success. If, as we expect, there is another rise, the 3m/3m growth rate could be the strongest since 2002."

Thursday July 19

INTERNATIONAL ECONOMIC ANNOUNCEMENTS

Continuing Claims (US) (13:30)

Initial Jobless Claims (US) (13:30)

Philadelphia Fed Index (US) (13:30)

UK ECONOMIC ANNOUNCEMENTS

Retail Sales (09:30)

FINALS

Sports Direct International, Versarien

INTERIMS

Breedon Group , Moneysupermarket.com Group, Nichols, Unilever

DRILLING REPORT

Anglo American

SPECIAL EX-DIVIDEND DATE

EIH Plc, Establishment Inv Trust, Martin Currie Asia Unconstrained Trust , Puma VCT 9

AGMS

Action Hotels, AO World, Babcock International Group, Big Yellow Group, Braveheart Investment Group, Caledonia Investments, Edinburgh Inv Trust, Electrocomponents, Golden Rock Global, Halma, HarbourVest Global Private Equity Limited A Shs, Mothercare, Personal Assets Trust, Prime People, Royal Mail, Speedy Hire

TRADING ANNOUNCEMENTS

Anglo American, AO World, Babcock International Group, Big Yellow Group, DotDigital Group, Euromoney Institutional Investor, Evraz, Hilton Food Group, Mothercare, SSE

FINAL DIVIDEND PAYMENT DATE

DCC, Templeton Emerging Markets Inv Trust

FINAL EX-DIVIDEND DATE

Aquila Services Group, Cranswick, Downing Four VCT DP2011 Gen A Shs, Downing Four VCT DP2011 Str A Shs, Downing Four VCT DSO 'D' Shs, Establishment Inv Trust, GB Group, Heath (Samuel) & Sons, Immunodiagnostic Systems Holdings, Martin Currie Asia Unconstrained Trust , Scapa Group, U And I Group, Vedanta Resources, Walker Greenbank

INTERIM EX-DIVIDEND DATE

Bank of Georgia Group, Globalworth Real Estate Investments Limited, Heavitree Brewery, Heavitree Brewery 'A' Shares, Polar Capital Global Financials Trust, Shoe Zone, Unicorn AIM VCT

QUARTERLY EX-DIVIDEND DATE

Ediston Property Investment Company, Greencoat Renewables, TwentyFour Select Monthly Income Fund Limited