Companies Reporting: Berkeley, DS Smith and Whitbread

Our regular look at the FTSE 350 and a selection of other companies reporting from 19 – 23 June.

• Berkeley looks set to weather a challenging housing market
• DS Smith looks to deliver another year of double-digit profit growth
• Did Whitbread‘s early momentum carry through rest of the first quarter?

LON:BKG Berkeley Group Holdings, Full Year Results, Wednesday 21 June

Aarin Chiekrie, equity analyst: “Berkeley’s full-year results should shed light on how the housing giant is dealing with a challenging market. We’ve already heard that sales in the five months to the end of February were down around 25% from the prior five months. But thanks to resilient pricing across the group’s London-focused operations, full-year pre-tax profits are still expected to rise from £552m to around £600m next week.

However, more recent data from Halifax has shown the first annual decline in average UK house prices since 2012, which could put pressure on Berkely’s top line going forward. That means controlling costs and maintaining margins will be a key priority from here. There have been early signs of build cost inflation moderating, so investors will be eager to hear if that trend has continued into the new financial year.

Berkeley’s London focus and higher-end product mean it offers something different from other large builders.  And careful management of works-in-progress has fuelled expectations for net cash to come in at £375m – a near 40% jump on the £269m seen in the prior year. That should provide a big enough cushion to help smooth out future bumps in the road, but any significant miss on this front could bring shareholder returns into question.”

LON:SMDS DS Smith, Full Year Results, Thursday 22 June

Matt Britzman, equity analyst: “Markets have already been given a hint of what to expect from DS Smith’s full-year results next week. Underlying EBITA (earnings before interest, tax, and amortization) is expected in the £850-£860m range, which would represent a big jump on the £616m generated the prior year.

Resilience in tough conditions has continued to hold it in good stead. Despite falling sales volumes, it remains on track for a second consecutive year of impressive double-digit profit growth.

The demand picture into the new financial year will be key. Management’s previously implied that they expect volumes to move higher, but that’s yet to materialise. There should be some commentary on order books next week, which will help paint a better picture for investors.

Take a step back from short-term noise and longer-term growth drivers look encouraging. The shift from plastic packaging isn’t going away anytime soon and as a key supplier of cardboard boxes to e-commerce groups, DS Smith is poised to benefit.”

• Companies Reporting: Bellway, LVMH, ASML, Whitbread, Netflix
• Three Quick Facts: Berkeley, Superseed Capital, Invinity Energy Systems
• Companies Reporting: Watches of Switzerland, Barratt Developments, Currys

LON:WTB Whitbread, Q1 Trading Statement, Thursday 22 June

Derren Nathan, head of equity research: “Premier Inn’s owner started the first quarter well. In the first seven weeks, UK sales were up 17% compared to last year, with hotels continuing to outperform the wider market. And in Germany, accommodation sales were up 140% reflecting the smaller size of the German business. Next week’s trading statement will provide some steer as to whether momentum continued for the rest of the quarter and beyond.

There are some signs across the wider market that UK hotels will benefit from a boost in staycations over the summer, but it’s too early to call. Investors will be keeping an eye out for any changes to Whitbread’s UK cost inflation guidance which currently stands at 7% to 8% for the full year. The Group is expanding its footprint and expects to add between 2,500 and 3,500 rooms across the UK and Germany this year, so will be good to see how things are progressing on that front too.”

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