Look ahead to FTSE 350, other companies reporting & economic events from 18 – 22 September
- ASOS plc (LON:ASC) battles with a drift back to bricks and mortar stores
- Kingfisher plc (LON:KGF)’s B&Q sees a drop in DIY
- How will Ocado Group PLC (LON:OCDO) compete with cheaper alternatives?
- Forward bookings are front and centre for TUI AG (ETR:TUI1)
- An investigation in the vet sector riles CVS Group Plc (LON:CVSG)
- Acquisition pipeline in focus for Halma plc (LON:HLMA)
- Will NEXT plc (LON:NXT)’s full-price sales land in line with expectations?
ASOS, Trading Statement, Tuesday 19 September
Susannah Streeter, head of money and markets, Hargreaves Lansdown:
‘’It has been hard going for ASOS as the company has battled with the drift back to bricks and mortar stores and a razor-sharp fashion focus from rivals, however its turnaround strategy has been showing some signs of promise. The company has been prioritising profitability over growth, and investors will be keen to see if its focus on higher margin items and cost-cutting across the business is continuing to bear fruit.
Although revenues fell back in the third quarter, and the number of active customers declined, the company made progress in removing unprofitable brands, scaling back discounting, and reducing excess stock levels. It’s also made changes to its Premier service and upped the minimum spend for customers for next day delivery. There will be keen eyes trained on whether further cost reduction plans are on track. However, longer term investment will need to be ringfenced to ensure that opportunities for growth, particularly in the US, are not squandered.’’
Kingfisher, Half Year Results, Tuesday 19 September
Susannah Streeter, head of money and markets, Hargreaves Lansdown:
“The poor summer weather is likely to have made it tougher going for B&Q owner, Kingfisher, with homeowners less likely to have embarked on garden makeovers in the rain. Although bigger ticket purchases had shown signs of holding up well in the Spring, with opportunities to dine outdoors few and far between, more customers may have put off buying new furniture, or barbecues.
As borrowing costs have shot up, causing fresh weakness in the housing sector, a fall in people moving home is also set to have weighed on DIY sales. B&Q is also facing some tough competition, particularly in the French market from Leroy Merlin, and rival promotional activity could also affect revenues going forward. With interest rates set to stay elevated in the UK until at least the second half of 2024, there are likely to be fewer big renovation projects getting underway with homeowners more cautious about taking on more debt.”
Ocado Group – Retail, Q3 Trading Statement, Tuesday 19 September
Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown:
“While Ocado is doing what it can, grocery inflation is rife, and customers are tightening their belts. Ocado isn’t a discount name, making it tough to compete in the current environment. The group’s still just about able to attract new customers, but people are buying less on average and the group’s undertaking price cuts. That’s a painful development for margins and, next week, they should give some further colour on how demand is shaping up.
As much as comparisons are tough compared to the pandemic years, there are some lingering questions over demand for Ocado’s higher-priced offering. New customer registrations and order values will be in the spotlight in a big way. The market can be jumpy when it comes to Ocado, so these are certainly things to monitor.”
TUI, Trading Statement, Tuesday 19 September
Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown:
“Travel giant, TUI, has seen impressive momentum so far this year. Third quarter revenue was up 19% thanks to a combination of higher customer volumes and higher prices. That suggests investors could be in for a strong final instalment for the full year. With that in mind, there will be a strong focus on free cash flow after it dropped across the first nine months of the year.
While underlying operating profit’s meant to be much better than last year, that doesn’t mean the coast is totally clear. As higher interest rates continue to dampen people’s borrowing power and increase their living costs, there will be a lot of attention on how bookings for the new financial year are shaping up. A sign of weakening or lack of detail here could see the market react negatively.”
CVS Group, Full Year Results, Thursday 21 September
Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown:
“It’s been a tough time for CVS Group, following news the CMA is opening an investigation into the vet sector. Next week, investors may get some further insight into how this is being treated and what it could mean. There’s a likelihood that any measures from the CMA will be relatively minor in reality, like making branding on clinics more obvious and providing clearer rationale on pricing.
Underlying performance is likely to be holding up well, with the resilient nature of pet-related spending, especially medical care, able to come through. The market will be sniffing around for anything to be worried about though, after the recent share price shocks, so the results need to show a clean bill of health for the group’s finances.”
Halma, Trading Statement, Thursday 21 September
Matt Britzman, equity analyst, Hargreaves Lansdown:
“Halma’s essentially a mash-up of around 45 businesses working to provide technology solutions in the safety, health, and environmental markets. Analysts aren’t expecting any major bumps from Halma’s first-quarter trading update next week, but there are a couple of areas to watch.
Supply chain issues meant margins in the safety division came under pressure last year. Investors will be hoping to hear news that conditions have eased and, if so, margins in the division should begin to recover as the year progresses. Given a premium valuation, markets won’t react too kindly to any change from that narrative.
Acquisitions are key to Halma’s model, so news on how the pipeline’s shaping up will be closely watched. Halma have secured three deals so far this year, totalling around £80m. Considering last year’s annual spend was around £400m, and that just about got the group to its target of 5% inorganic profit growth, there’s pressure to deliver some positive commentary on the deal pipeline for the remainder of the year.”
Next, Half Year Results, Thursday 21 September
Aarin Chiekrie, equity analyst, Hargreaves Lansdown:
“Fashion retailer, Next, has got into the habit of beating market expectations on the upside this year. In its most recent announcement, full-year pre-tax profit guidance got another small bump up to £845m as online sales climbed at double-digit rates. Investors aren’t expecting to see any more upgrades on this front in next week’s half-year results, but analysts will be keeping a close eye to make sure the full-price sales outlook remains on track. This is a key metric for Next, and arguably the main driving force behind overall performance.
Successfully keeping full-priced sales front and centre to avoid discounts is one of the reasons Next can boast some of the best margins in the sector. But it’s a tricky strategy to nail, especially alongside expanding its online presence and introducing third-party brands to its offering. This side of operations hasn’t been as efficient as many would like, so we’ll be hoping to see signs of improvement here.”
Among those currently scheduled to release results next week:
18-Sep
| Phoenix Group Holdings | Half Year Results |
| HgCapital Trust | Half Year Results |
19-Sep
| ASOS* | Trading Statement |
| Hargreaves Lansdown[NM1] | Full Year Results |
| Kingfisher | Half Year Results |
| Moonpig | Trading Statement |
| Ocado Group – Retail* | Q3 Trading Statement |
| SThree | Q3 Trading Statement |
| TUI* | Trading Statement |
20-Sep
| Dunelm Group | Q4 Results |
| M&G* | Half Year Results |
21-Sep
| C&C Group | Q2 Trading Statement |
| CVS Group* | Full Year Results |
| Halma* | Trading Statement |
| JD Sports Fashion | Half Year Results |
| Next* | Half Year Results |
| Octopus Renewables Infrastructure Trust | Half Year Results |
| SSP Group | Q4 Trading Statement |
22-Sep
| Ascential | Half Year Results |
| Investec | Trading Statement |
*Events on which HL will be updating investors
