Companies Reporting: Ashtead Group, Halfords, Tesco

Our regular look at the FTSE 350 and a selection of other companies reporting from 12 – 16June.

• Ashtead looks to brush aside tightening lending in the US
• Can Halfords return to profit growth this year?
• Tesco sheds light on a grocery sector seeing record levels of price inflation

Ashtead Group, Q4 results, Tuesday 13 June

Matt Britzman, equity analyst: “Ashtead Group LON:AHT, which rents out construction and industrial equipment, is expected to put out a strong set of fourth-quarter results next week. Analysts are looking for top-line growth of a touch under 22% for the full year.

It’s been a bit of a choppy year for the shares, as fears around tightening lending in the US, with the troubles facing regional banks, weighed on sentiment. Available funding for construction projects is key and recent news from the Fed loan survey has been more positive, pointing to easing lending conditions. But demand for construction loans is also a factor, and that looks to be deteriorating.

More broadly though, there are a range of government initiatives helping on the demand side – particularly in the US. The US rental growth is expected to continue in the “mid-teens” next year, it will be good to see more fleshed-out guidance on this next week.”

Halfords, full year results, Thursday 15 June

Derren Nathan, head of equity research: “Halfords’ LON:HFD management has set it on a journey to become a services-led business, with some 50% of sales already coming from its Autocentres business. But it’s not been proving to be an entirely smooth road. A profit warning in January saw the outlook for full-year pre-tax profits, to be reported in next week’s results, come down to £50-60m compared with prior guidance that it would be at the lower end of the £65-75m range. The driving force behind the slowdown has been a challenging labour market, with Halfords struggling to recruit enough skilled technicians to meet demand.

The company’s recent update focussed on the medium-term outlook over which the Board expects to grow pre-tax profits towards £100m. Forecasts don’t suggest any progress towards this target in the current financial year. So, investors will be zoning in on the shorter-term outlook, particularly for wages and other cost inflation, as well as checking how demand is holding up.”

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Tesco, Q1 trading statement, Friday 16 June

Matt Britzman, equity analyst: “Next week’s trading statement by Tesco LON:TSCO should shed further light on how consumers are dealing with mounting cost pressures. Industry data points to a sliver of hope that UK grocery inflation may be showing signs of easing, but it remains near record highs at 17.2% for the four weeks to 14 May. The owners of big brands have put through huge price hikes this year, so it’ll be interesting to hear how that’s impacting shopping patterns – a shift toward own-brand products is already underway.

Tesco’s focus on prices, with key promotions like Low Everyday Prices and Aldi Price Match, have helped it retain market share over the past few years. That comes at a cost, and the accelerated cost-saving programme is expected to move at some pace to help offset higher marketing spend and cost inflation. An update on the latter is hoped for next week.”

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