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Companies Reporting: AG Barr, ASOS, Carnival

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Our regular look at the FTSE 350 and a selection of other companies reporting from 25 – 29 September.

  • AG Barr’s margins set to remain under pressure
  • ASOS set to prioritise profitability over growth
  • Will high oil prices dampen Carnival’s parade? 

AG Barr – Retail, Half Year Results, Tuesday 26 September

Aarin Chiekrie, equity analyst, Hargreaves Lansdown: “Long-standing CEO, Roger White, announced his retirement back in August, after more than 20 years at the helm. A change at the top is always a leap into the unknown so it will be interesting to see if next week’s results provide any updates in the search for his successor.

It was reported that the IRN-BRU maker’s half-year revenue would climb up to around £210m. That would represent growth of around 10% on a like-for-like basis, as consumers look to have stomached recent price hikes well. Profits are set to grow at a slower rate though, with heavy investment in production facilities continuing. This will hurt margins in the short term but should help to sweeten margins over the medium term as increased efficiencies boost profitability.

A healthy net cash position was underpinning AG Barr’s LON:BAG investment phase. It will be interesting to see just how quickly the group’s burning through cash, with any significant drop likely taking further acquisitions off the table in the near term.”

ASOS– Retail, Trading Statement, Tuesday 26 September

Aarin Chiekrie, equity analyst, Hargreaves Lansdown:
“ASOS has had a rough ride lately. With net debt and cash flows both rising earlier this year, it had to resort to raising around £80m of new funds by issuing new equity shares. This isn’t usually a good sign, as it waters down existing shareholders’ stake in the company. However, the cash injection has provided some wiggle room to execute the ongoing transformation, so we’ll be looking out for early signs that it’s bearing fruit in next week’s trading update.

With revenue declining at double-digit rates in the third quarter, profitability rather than growth is now the order of the day at ASOS LON:ASC. Resources are being reallocated away from the US, where extensive investment has so far yielded weak results. Costs are getting stripped back too, with the group on track to hit its cost-saving target of £300m last we heard. These actions should stem the financial bleeding to some degree, so keeping a close eye for more guidance on where full-year profits are expected to land.”

Carnival, Full Year Results, Friday 29 September

Derren Nathan, head of equity research, Hargreaves Lansdown: Carnival [LON:CCL] entered the peak cruising season with strong levels of bookings and every sign that momentum was continuing on the right course. It will be interesting to see if that resilience is holding up and to what extent a two-day closure of the website earlier this month has impacted future sailings. On the cost side, inflation has been proving more difficult to manage than first thought so investors will be keen to hear how the group’s going to navigate this moving forward. Carnival’s expecting to spend around $1.9bn on refuelling its gas-guzzling ocean liners this year, so the recent spike in the oil price will likely be in the spotlight.

Debt levels are still higher than we’d like to see in the wake of COVID-19, and forecasts suggest that net debt has crept back over $30bn in the quarter just gone. With that in mind, it’s not expected that dividends will be back on the captain’s table any time soon.”

This article has been 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.

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

25-Sep
No FTSE 350 Reporters
26-Sep
AG Barr Half Year Results
ASOS Trading Statement
Close Brothers Group Full Year Results
PZ Cussons Full Year Results
Smiths Group Full Year Results
27-Sep
No FTSE 350 Reporters
28-Sep
Bluefield Solar Income Fund Full Year Results
Ceres Power Holdings Half Year Results
29-Sep
Carnival Q3 Results

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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