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Home » UK Shares » Companies Reporting » Companies Reporting: BP, Unilever, Ocado, Disney, PepsiCo

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

  • We’ll see how BP’s planning to use the sector’s tailwinds as it continues to shift toward renewables
  • Following the rebuffed Unilever bid, we’ll be looking for another assessment of the consumer healthcare arm at GlaxoSmithKline
  • All eyes will be on subscriber numbers at Disney
  • We’ll see if hot sales cool off at Barratt Developments
  • Debt will be watched at PepsiCo
  • We expect to see further recovery in Coca Cola’s bar and restaurant sales
  • Investors will be hungry for news of a more appetising strategy at Unilever
  • The ONS December GDP figures will shed light on the effects of the cost of living squeeze on consumer confidence

BP, Q4 Results, Tuesday 8 February

Laura Hoy, Equity Analyst “Soaring oil prices should add some positivity to BP [LON:BP] results. Last we heard cash profits had made their way 12% beyond 2019 levels. But the high costs of running an oil operation together with a hefty share buyback plan has sapped incoming cash. That’s left the group with net debt of more than 4 times cash profits. We’d like to see management using the sector’s tailwind to make progress on paying down debt and stabilising the balance sheet.

The other big question mark is the group’s sustainable energy strategy, set to become a much larger demand on cashflow. This part of the business is reported together with gas, making it difficult to gauge the expected returns. However now that low carbon projects are a larger part of BP’s overall strategy, we’ll be looking for management to offer a bit more detail.”

Ocado Group, Full Year Results, Tuesday 8 February

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Sophie Lund-Yates, Equity Analyst “Despite what you may think, Ocado’s performance, and therefore the market’s opinion, rests on the group’s ability to sign up more retail partners. Retail chains pay for Ocado’s cutting edge warehouse and picking technology to boost their own online offerings. The pandemic has turbo charged the shift to online shopping, increasing demand for the kind of technology Ocado specialises in. That should make it easier for Ocado Group [LON:OCDO] to unearth potential partners and strike more deals. But we’d argue the number of new deals being struck is still modest, given the helpful market conditions.

This part of the business is covered under “Solutions”. At the half year the division’s losses widened to £56.6m as higher investment offset the revenue benefit of two fulfilment centres coming online for Kroger in the US. We would like to see that losses have narrowed, or are at least holding steady.

The part of the business that’s a bit more familiar – the Retail operation – is half owned by M&S these days. That makes it a bit less of a profit engine, but it will still be important to see how things are going. Exactly how much of the increased demand from the last 18 months is permanent is hard to predict.”

GlaxoSmithKline, Q4 Results, Wednesday 9 February

Laura Hoy, Equity Analyst “The number one thing on investors’ minds is GlaxoSmithKline’s demerger. Unilever’s unexpected bid for the soon-to-be spun-off consumer healthcare business has drawn attention to its potential. Investors will be hungry for more data to determine whether it will live up to expectations once it’s flying solo.  Management said this part of the business will see organic sales between 4-6%, over the medium-term. Timing will be another big consideration—GSK’s said the business will get the boot in mid-2022, if that timeline is still intact, it leaves only a few more months for another bidder to emerge.

But investors should keep in mind Consumer Healthcare is only part of the story. For the remainder of the GlaxoSmithKline [LON:GSK] business, we’ll be looking for growth in Vaccines and Specialty Medicine, an important future growth engine. GSK’s business is also carrying more debt than we’d like. We’ll be keeping an eye on whether this is continuing to stack up as most of it’ll be passed on alongside the consumer healthcare arm.”

Disney, Q1 Results, Wednesday 9 February

Susannah Streeter, Senior Investment and Markets Analyst ‘’Disney’s recent growth in subscriber numbers disappointed the market so all eyes will be on the most up to date figures to get a measure of how just how hard going it is to win new streaming customers. After Netflix’s poor performance here, a sign that Disney [NYSE:DIS] content is holding more appeal should be well received by investors. The challenge the streaming giants are facing is that growth in earlier quarters due to rolling lockdowns and social restrictions has poached future subscribers. Covid has also disrupted productions, adding to costs and Omicron may show up to be another unwelcome twist in the tale in this regard. However, there are reasons to expect Disney to be more resilient than Netflix given that the Disney eco-system offers in built diversification. Away from streaming and back in the land of Disney’s physical theme parks, the story should be brighter. Parks offer a playground for future younger fans, who are likely to want to put eyes on screen to watch their favourite characters when they return home, so signs that pent-up demand for holidays is translating into bookings should help Disney, if streaming numbers disappoint.’’

Barratt Developments, Half Year Results, Wednesday 9 February

Susannah Streeter, Senior Investment and Markets Analyst ‘’House builders are vulnerable to rising interest rates and that nervousness has been seeping through the sector, and Barratt Developments [LON:BDEV] has been far from immune.  Although the housing market is still proving buoyant, there is an expectation that hot sales will cool off in the months to come, if rates rise as expected and the cost of living squeeze intensifies. Investors clearly worry that house builders, who have been enjoying the cheap loan party and pent-up demand over the past year, could soon be facing a more difficult trajectory. Investors will be keeping a close watch on Barratt Developments order book and average selling prices, to see if rising input prices are still being readily absorbed by homebuyers for now. Partnerships with local councils looking to address the ongoing housing shortage should add resilience so any fresh details of deals or added business with housing associations or local authorities are likely to spark interest.’’

PepsiCo, Q4 Results, Thursday 10 February

Sophie Lund-Yates, Equity Analyst Pepsi [NASDAQ:PEP] annual sales are around twice that of its famous rival. Keeping hold of that accolade has a lot to do with how well it’s navigated COVID disruption, including offsetting cost and supply headwinds. We’ll be looking for a continuation of this trend next week. An ability to keep profits nudging forwards underpins Pepsi’s ability to pay a dividend. We have reason to be optimistic about its ability to continue its run of 49 years of consecutive dividend growth, but this is of course not guaranteed.  The final thing to watch is debt. This had crept up to over $34bn at the last count.”

Coca Cola, Q4 Results, Thursday 10 February

Sophie Lund-Yates, Equity Analyst “Perhaps the world’s most famous soft drink was enjoying the sweet spoils of recovery last quarter. Management upped guidance for full year organic revenue growth to between 13% and 14%. So, first on the agenda is making sure it’s hit that target. We have reason to be optimistic, as life has continued to get back to normal and bars and restaurants re-opened. Omicron fears will have taken some heat out of festive sales though, and we’ll find out the extent of that.

The other thing to keep in mind is cost inflation. This is a global headwind and there isn’t a huge amount Coca Cola [NYSE:KO] can do about it. But we wonder how effectively higher costs have been offset, and what impact this will have on profits. The group’s also ramped up marketing spending, so all in all the operating bill is likely to be a fat one.”

Unilever, Full Year Results, Thursday 10 February

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Susannah Streeter, Senior Investment and Markets Analyst ‘’Investors will be hungry for news of a more appetising strategy at Unilever [LON:ULVR] following the furore over the failed bid for GSK’s consumer arm. Instead of making fresh acquisitions to enlarge its cupboard of consumer staples, shareholders, led increasingly by activist investors, want to see more focus on streamlining and revitalising the existing business to boost profit margins. The company has already announced a fresh round of cost cutting, with a large tranche of management posts being swept away. Shares rose initially on news of the restructuring, but have lost ground, with some investors not satisfied that headcount reduction alone will be enough to ensure Unilever turns a corner.  Just how much of a headache rising input costs are for the company will also be in focus in these results. Customer loyalty is still a big asset for Unilever, and it’s been working to build a volume-led business, but with the cost of living squeeze intensifying there is a risk pricier products will struggle to shift.  So clearly more clarity is being demanded about the direction ahead, and the company will be under pressure to come up with a brand new approach.”

Relx, Full Year Results, Thursday 10 February

Steve Clayton, HL Select Fund Manager “Relx report full year results on Thursday 10 February and consensus sees the group reporting revenues of £7.34bn and pre-tax profits of £2.14bn, marking growth of 3% and 11% respectively compared to the 2020 results. The group should be able to talk positively about a return to more normal trading in its Exhibitions division as economies reopen. The more important news however will be their view of the outlook for revenue growth in the core Scientific, Technical and Medical division, along with any signs of an acceleration in demand for either the Legal or Risk & Business Analytics divisions. Relx [LON:REL] should be able to deliver strong operational gearing as revenues build, raising the potential for upgrades to earnings and dividend expectations.”

British American Tobacco, Full Year Results, Friday 11 February

Steve Clayton, HL Select Fund Manager British American Tobacco [LON:BATS] pay one of the largest dividends in the market. Last year’s payment put almost £5bn into investors’ pockets and analysts expect this year’s payment to jump by around 6%, adding another £300m to the annual total. With workplaces reopening around the world, analysts will be keen to see the impact on industry volumes and whether BATS are building on their market shares. But it is the performance in New Generation Products, like vapes and heated tobacco that are potentially less risky than cigarettes that is likely to impact sentiment the most. With the category currently loss making, progress towards the group’s target of break-even by 2025 will be a big swing factor in BATS overall growth rate and dividend paying capacity.”

GDP December figures, ONS, Friday 11 February

Susannah Streeter, Senior Investment and Markets Analyst ‘’The UK economy had bounced back to better than pre-pandemic levels in November, but that won’t have lasted. With the Omicron storm hitting hard in December, there’s likely to have been a sharp deterioration in fitness levels across an array of sectors. Other data from the ONS had indicated the new variant caused waves of turbulence for services in particular. Employee absence rates rose sharply at the end of December, with 3% of the workforce estimated to be on sick leave or not working because of Covid symptoms or quarantine, the highest figures since comparable estimates began in 2020 June. The government guidance to scrap party plans before Christmas badly affected the hospitality industry – with 44% of accommodation and food services firms reporting an increase in cancellations and an increasing number of firms struggling with cash flow. December’s GDP figures are also likely to show the effect of the exodus of shoppers from the high street as sickness rates and fears of infection intensified. The December snapshot is likely to look ugly but with Omicron expected to be a short sharp shock rather than a lingering malaise, and the jobs market still buoyant, there will be more focus on the ongoing effect of the cost of living squeeze on consumer confidence.’’

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

07-Feb
No FTSE 350 Reporters
08-Feb
BellwayTrading Statement
BP*Fourth Quarter Results
DCCThird Quarter Interim Management Statement
DiscoverIEThird Quarter Trading Statement
Micro FocusFull Year Results
Ocado*Full Year Results
SSEThird Quarter Trading Statement
TUIFirst Quarter Results
09-Feb
Barratt DevelopmentsHalf Year Results
DisneyFirst Quarter Results
DunelmHalf Year Results
GlaxoSmithKlineFourth Quarter Results
PZ CussonsHalf Year Results
Smurfit KappaFull Year Results
10-Feb
AshmoreHalf Year Results
AstraZenecaFull Year Results
BeazleyFull Year Results
Coca ColaFourth Quarter Results
PepsiCoFourth Quarter Results
RedrowHalf Year Results
RelxFull Year Results
SynconaThird Quarter Trading Statement
UnileverFull Year Results
11-Feb
British American TobaccoFull Year Results
Lancashire HoldingsFourth Quarter Results
Tate & LyleThird Quarter Trading Statement
VictrexFirst Quarter Interim Management Statement

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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This article is not investment advice. Investors should do their own research or consult a professional advisor.

Michael Morton

Michael Morton

Michael has worked within the Financial Industry for more than 20 years. Starting out as a financial analyst, he has extensive experience working with fund management groups and brokerages.

With an interest in Stocks and Shares, Funds, ETFs and Commodities, his investment focus is medium to long term gains, with the objective of financial security on retirement, and building wealth for his young children for their adult life. His broker of choice is Hargreaves Lansdown.

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