FTSE 350 Look Ahead: Compass, Johnson Matthey, United Utilities

0
FTSE 350 Look Ahead: Compass, Johnson Matthey, United Utilities
PIX1861 / Pixabay
  • Compass Group plc (LON:CPG) looks to capitalise on the easing of restrictions

Get The Full Ray Dalio Series in PDF

Get the entire 10-part series on Ray Dalio in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues

Q3 2021 hedge fund letters, conferences and more

  • Johnson Matthey PLC (LON:JMAT) looks to reassure the market after its surprise Battery Materials announcement earlier this month
  • We’ll see whether elevated demand was enough to offset inflationary pressure at United Utilities Group PLC (LON:UU)

Compass Group, Full Year Results, Tuesday 23 November

Matthew Britzman , Equity Analyst

Mohnish Pabrai On Value Investing, Missed Opportunities and Autobiographies

Mohnish PabraiIn August, Mohnish Pabrai took part in Brown University's Value Investing Speaker Series, answering a series of questions from students. Q3 2021 hedge fund letters, conferences and more One of the topics he covered was the issue of finding cheap equities, a process the value investor has plenty of experience with. Cheap Stocks In the Read More

“Considering catering companies were acutely hit by lockdowns, Compass’ recovery efforts can’t be knocked. Margins have been improving over the course of the year, as it tightened the screws on costs. The group’s targeting a return to margins above 7% before volumes fully recover. That won’t happen overnight, but it will be important to see if it’s heading in the right direction. Compass is targeting underlying operating margins of 4.4% for the full year. The group’s debt position is on our radar. Last we heard, net debt was equivalent to 3 times cash profits, considerably above the target of 1-1.5 times. That said, Compass has made progress reducing the absolute debt level and if profits pick up the ratio will naturally come down. Compass’ valuation is above its longer-term average. The market has high expectations for the group’s continued recovery. Any unexpected bumps in the road, or a less-than-perfect outlook statement could cause some short-term volatility.”

Johnson Matthey, Half Year Results, Wednesday 24 November

Nicholas Hyett, Equity Analyst

“Having recently announced it’s abandoning its Battery Materials business, Johnson Matthey really needs to deliver some good news next week. Not least because there could be significant impairments associated with the move, which negatively affect profit.

The numbers themselves are unlikely to provide what the group is looking for, having already said half year results are set to be “in-line with market expectations”. And full year is even weaker, at “the lower end of market expectations” as the pandemic disrupts automotive manufacturing – the group’s key end market.

Instead, it’s commentary around future investment opportunities that will be closely watched. The group hinted at growth areas like “hydrogen technologies” and “decarbonisation of chemicals” in its trading statement earlier this month. The group has history in both, but relying on them to take the strain of falling combustion engine vehicle sales is a big ask. We were disappointed at the lack of detail about opportunities and financial cost in the group’s initial announcements and hope for more detail next week.”

United Utilities, Half Year Results, Wednesday 24 November

Laura Hoy, Equity Analyst

“Post-pandemic life should be a good thing for United Utilities. Businesses reopening should boost consumption, but some of the added household demand should also stick around as working from home continues. At the half year results we’ll get some idea of how the two are balancing out and whether the group can expect elevated overall demand from here on out.  Management forecast a 4% revenue increase, despite lower prices due to regulatory caps. Those regulatory price caps keep the group from passing inflationary pressures to customers until next year. At the half year we’ll get a sense of how much these factors impacted profits—at last check the group was still expecting operating profit growth, with cost-saving initiatives offsetting the inflationary issues. Finally, debt will be one to watch as the group continues to make necessary infrastructure investments. As long as profit growth is also on the up this isn’t overly concerning, but it’s something to keep an eye on, particularly if inflationary pressure was stronger than anticipated.”

FTSE 100, FTSE 250 And Selected Other Companies Scheduled To Report Next Week

22-Nov

Big Yellow Group Half Year Results
Diploma Full Year Results

23-Nov

AO World Half Year Results
Caledonia Investments Half Year Results
Compass Group* Full Year Results
Cranswick Half Year Results
CRH Q3 Trading Update
Pets at Home Group* Half Year Results
Reach Trading Update
Severn Trent* Half Year Results
Telecom Plus Half Year Results

24-Nov

Brewin Dolphin Holdings Full Year Results
Britvic Full Year Results
HICL Infrastructure Half Year Results
Intertek Group* Trading Update
Johnson Matthey* Half Year Results
Rotork Trading Update
United Utilities Group* Half Year Results
Virgin Money UK Full Year Results

25-Nov

Hill & Smith Trading Update

26-Nov

No Reporters

*Events on which we will be updating investors.


About Hargreaves Lansdown

Over 1.67 million clients trust us with £138.0 billion (as at 30 September 2021), making us the UK’s number one platform for private investors. More than 98% of client activity is done through our digital channels and over 600,000 access our mobile app each month.

Updated on

Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver
Previous article John Malone: Equity Markets Are In A ‘Land Rush’ Similar To ’90s Bubble
Next article Meal Kits Business, Bound For “Tasty” Growth According To Estimates

No posts to display