Companies Reporting: Berkeley Group, DS Smith, Ibstock

Here’s our regular look at the FTSE 350 and a selection of other companies reporting from 7 to 11 March.

• We’ll see how housing demand is holding up for Berkeley Group
• We’ll be keeping an eye on volumes in the wake of rising prices at DS Smith
• Ibstock looks to lock in hefty revenue growth despite supply chain challenges

Ibstock, Full Year Results, Wednesday 9 March

Matt Britzman, Equity Analyst “Cost cutting exercises have allowed Ibstock to navigate the inflationary environment well so far. We’re expecting full year revenue up 29% to £409m with underlying cash profits modestly ahead of previous guidance for £93m. Supplying the bricks used for building houses, rather than selling the houses themselves, provides some shelter from a drop in housing demand. Nevertheless, we’ll be keen to hear any commentary on how demand from housebuilders is holding up.

The creation of new business segment Ibstock Futures was a focal point of the last trading update, and we’ve been promised more information in next week’s full-year results. So far, we know £50m is being used to launch the segments first project, building the UK’s first brick slip factory. We’ll be keen to hear more about any future projects in the pipeline.”

DS Smith, Q3 Trading Update, Thursday 10 March

Sophie Lund-Yates, Equity Analyst “DS Smith doesn’t directly operate in Russia, meaning the impact of the ongoing crisis should be mainly limited compared to peers who have more exposure to the region. However, the full effect of economic sanctions is hard to predict and we should get some commentary surrounding that in next week’s trading statement.

The main aspect we’ll be focussed on is increasing input costs. These have been on the rise for a while, and DS Smith has been able to offset this by increasing its own prices. There is a point at which higher prices could start to eat into volumes though and we’ll be looking to make sure the group hasn’t reached this tipping point.”

Berkeley Group, Trading Statement, Friday 11 March

Matt Britzman, Equity Analyst “Berkeley’s London focus, and higher-end product, means it offers something different to the other large builders. Many of its sites are technically challenging, and that’s afforded it enviable margins in the past. Average selling prices in London were down at the half year mark, but volumes were beyond pre-pandemic levels.

That gave management the confidence to raise guidance, with pre-tax profits expected to come in around £544m. We’ll have our eyes on profits and margins, but also any commentary or guidance on how cost inflation is set to impact 2022 trading. It’s been a headwind for the sector, and not one we expect to go away anytime soon. The other important piece of information will be news on forward sales, given interest rates are higher which increases the cost of mortgages. That should help gauge how demand for new houses is holding up in the current, evolving, climate.”

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

This article is brought to you in association with Hargreaves Lansdown. All opinions expressed in this article are from the analysts and do not necessarily represent the opinions of The Armchair Trader.

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