Here’s our regular look at the FTSE 350 and a selection of other companies reporting from 6 to 10 December
- Investors will be keen to see how the Next Generation Products business is faring at BAT
- Berkeley will reveal if it is still building on a strong housing market
- We’ll assess whether DS Smith’s been able to balance inflationary pressures against price hikes
- Rolls Royce may have to revise targets in the face of new Covid-variants
- Prospects were looking up for caterer SSP, but the Omicron variant poses new risks
- Moonpig has come down to earth with a bump as growth slows and costs rise
British American Tobacco, Pre-Close Trading Update, Tuesday 7 December
Steve Clayton, Manager of the HL Select Funds “A year-end trading update from British American Tobacco LON:BATS is expected on 7 Dec. Investors will be keen to see how momentum in the Next Generation Products business is faring. Success here is key to ensuring a future beyond tobacco. The tobacco industry saw volumes hold up during the pandemic, as people stayed home and lit up. With the pandemic easing, the question is whether volumes will resume their previous pace of decline”
SSP, Full Year Results, Wednesday 8 December
Susannah Streeter, Senior Investment and Markets Analyst ‘’Prospects were looking rosy for caterer SSP LON:SSPG, until the Omicron variant disrupted its route back to health. It relies on travellers to pick up snacks from its Upper Crust kiosks, Ritazza cafes and other franchise outlets across the travel network. The lifting of many restrictions in the Autumn had led to an upswing in footfall, but now many holiday plans have been plunged into disarray again. This is likely to affect the company’s outlook for the coming months, but there is hope from airlines that there will still be a bounce back by the summer, but it seems that the long road to recovery still stretches far into the horizon. The slow return of commuters is set to continue for now, which should continue to bolster sales, with working from home orders not yet re-imposed, and hospitality outlets not under the same restrictions yet as shops.’’
Berkeley Group, Half Year Results, Wednesday 8 December
Steve Clayton, Manager of the HL Select Funds “Berkeley Group’s interim results should give a health check on the state of the capital’s property market, where Berkeley Group LON:BKGare strongly represented. Cost pressures will be under close scrutiny. So far the industry has been sheltered from their impact by rising asking prices for flats and houses. Berkeley’s London and Home Counties profile, puts it in the hot seat for feeling the costs, but with upmarket London home prices showing renewed signs of life, few are expecting any setbacks.”
DS Smith, Half Year Results, Thursday 9 December
Laura Hoy, Equity Analyst “The e-commerce boom has shown no signs of slowing and as such we expect box-maker DS Smith LON:SMDS to report strong demand through the first half. The biggest question is whether or not rising costs are cutting into profits. The group called out inflationary pressure in its most recent update, and this will be the first time we get a glimpse of how it’s impacted the business. Management said it would pass these costs on to customers, and we suspect this will mostly offset the burden. However, there could be somewhat of a lag which may temporarily dampen profits. We suspect this increasing pricing pressure will push DS Smith to pick up the pace on its goal to outsource some of its papermaking. At last check roughly 80% was made by DS Smith itself and management’s aiming to lower that to 60%. Net Debt will be another figure to watch, as it’s been on the rise over the past year following the Europac acquisition. At 2.2x cash profits, it’s beyond management’s target. This isn’t unmanageable, but the group is likely looking for ways to chip away at that figure and we’d like to see progress on that front.”
Rolls Royce, Trading Update, Thursday 9 December
Sophie Lund-Yates, Equity Analyst “Producing and servicing wide body (long haul) aircraft engines has not been a nice business to be in over the last 18 months. To that end, we aren’t expecting a complete about-turn in fortunes in next week’s trading statement. But we would like to see that things are on track – especially the aim to be cash flow positive in the second half. The other metric to watch where Rolls Royce [LON:RR] is concerned is Engine Flying Hours (EFH) – this is the amount of time its engines spend in the air. And it’s what the all-important servicing revenue is based on. When we last heard, they were expected to recover to just 55% of 2019 levels in 2021 and 80% of 2019 levels in 2022. We wonder if the news of new Covid-variants and further travel restrictions have forced management to downgrade these targets at this stage. To get itself through the pandemic, Rolls Royce underwent an enormous restructuring and cost saving programme. This includes 9,000 redundancies and business disposals. Any change of this magnitude comes with risk and we’d like to know how things are going.”Moonpig, Half Year Results, Thursday 9 December
Susannah Streeter, Senior Investment and Markets Analyst ‘’After Moonpig’s flying start at its IPO earlier this year the company has come back down to earth with a bump, as warnings of slower growth and the renewed competition from bricks and mortar stores disappointed investors. It planned to use a big chunk of its earnings to gobble up further market share, and there will be a keen eye on this update for any indication as to whether this big marketing spend is reaping rewards. The fresh social restrictions in the Netherlands and concerns about the spread of the variant taking hold in the UK, could see more reluctance to hit the shops, so there is expectation that Moonpig LON:MOON could benefit from a further shift to e-commerce. Moonpig has also rolled out augmented reality products to try and stay ahead of the herd, and this innovation might help it win over extra Christmas sales.’’
FTSE 100, FTSE 250 and selected other companies scheduled to report
| 06-Dec | |
| Victrex | Full Year Results |
| 07-Dec | |
| Ashtead | Half Year Results |
| Babcock International | Half Year Results |
| British American Tobacco | Pre-Close Trading Update |
| Ferguson | First Quarter Results |
| Paragon Banking | Full Year Results |
| 08-Dec | |
| Berkeley | Half Year Results |
| SSP | Full Year Results |
| TUI | Full Year Results |
| 09-Dec | |
| Balfour Beatty | Q3 Trading Update |
| DS Smith | Half Year Results |
| FirstGroup | Half Year Results |
| JPMorgan European Smaller Companies Trust | Half Year Results |
| Moonpig | Half Year Results |
| Rolls-Royce | Trading Update |
| 10-Dec | |
| No reports | |
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.
