FTSE 350 Look Ahead: DS Smith, Berkeley, John Wood

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FTSE 350 Look Ahead: DS Smith, Berkeley, John Wood
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Look ahead to FTSE 350 & other companies reporting from 21 to 25 June

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Q1 2021 hedge fund letters, conferences and more

  • We’ll be looking for insight into how DS Smith plc (LON:SMDS) will balance rising commodity prices
  • Berkeley Group Holdings PLC (LON:BKG) looks to shrug off a new set of headwinds
  • John Wood Group PLC (LON:WG) will tell us whether expected improvements materialised

DS Smith, Full Year Results, Tuesday 22 June

Laura Hoy, Equity Analyst

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“The past year’s e-commerce boom has been a boon for packaging giant DS Smith, and that should be evident when it releases full year results. However, while demand for corrugated cardboard boxes is expected to rise 7% year-on-year, the materials required to manufacture them are becoming more expensive. Coupled with stunted demand from the hospitality sector, underlying cash profits are expected to come in roughly 15% lower. Considering the headwinds, a figure in line with that estimate would be good going. What’s more important now is understanding how DS Smith will deal with the rising costs. The group had planned to pass the price hikes onto its customers, and we’re keen to know whether that’s dented demand. The group has also been working to insulate itself from commodity price swings by outsourcing paper manufacturing. While it’s too late to count on that as a safety net now, progress on that front is imperative to setting the group up for less volatility in the future.”

Berkeley Group, Full Year Results, Wednesday 23 June

Nicholas Hyett, Equity Analyst

“With the pandemic and remote working driving wealthy city dwellers out into the country, the main question facing Berkeley this year was how well demand for its London centric homes (including flats) was holding up. So far the group has performed remarkably well, and is on track to deliver a similar level of profit to last year with forward sales also looking healthy. We don’t expect that to have changed now the economy is gradually unlocking.

More recently a rapid increase in the cost of construction materials and shortage of skilled labour has created another hurdle to potentially trip the group.  That’s a headwind facing the whole industry, but Berkeley may actually be better insulated than many. Its relatively high price point and specialism in complex sites mean materials account for a smaller proportion of the overall cost base, and an increase will have a relatively more modest impact on margins. Still it’s one to watch out for.”

John Wood, Q2 Trading Statement, Thursday 4 June

William Ryder, Equity Analyst

“In its AGM statement in May, the consulting and engineering firm told us trading was “slower than anticipated”. A robust performance in the Consulting division was unable to offset weakness in Projects as large engineering, procurement and construction (EPC) contracts roll off the books, and Covid-19 and a volatile oil price conspired against the Operations division.  Nonetheless, management is maintaining guidance thanks to “improving momentum”, and even expects stronger margins this year. Consulting activity is expected to increase and Operations to be buoyed by conventional energy demand and growth from “process & chemicals”. Operational resilience is being supported by strong order book momentum, which was up 9% to $7.1bn last we heard.  We’ll find out next week whether management’s confidence was well placed. Commentary on the order book and any changes to guidance will be top of the agenda.”

FTSE 100, FTSE 250 and selected other companies scheduled to report next week

21-Jun

No FTSE 350 Reporters

22-Jun

Centamin Q2 Production Results
DS Smith* Full Year Results

23-Jun

Berkeley Group* Full Year Results

24-Jun

John Wood Group Q2 Trading Statement

25-Jun

No FTSE 350 Reporters

*Events on which we will be writing research.


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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)www.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
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