Our regular look at the FTSE 350 and a selection of other companies reporting from 29 August – 2 September 2022.
- Bunzl is hoping to see strong performance from higher inflation
- Order backlog and margins in focus at Kainos
Bunzl, Half Year Results, Tuesday 30 August
Charlie Williams, Equity Research Assistant, “The Covid-19 related boost in sales may be normalising for specialist distribution and service group, Bunzl, but their base business looks to be performing well. Revenue guidance has been upgraded from ‘moderate’ to ‘very good’ for the year and it’ll be interesting to see by how much cost inflation has been passed onto buyers through regular pricing reviews.
Bunzl’s own brand products can be sold and distributed for higher margins. As higher prices add pressure to consumer finances, operating margins should benefit as buyers opt for cheaper products.
Acquisitions take up a decent chunk of free cash flow for Bunzl, who typically buy small, low-risk companies with margins higher than the groups average. This strategy has worked for many years, but price inflation has meant the lion’s share of recent growth has been organic. Investors will be eagerly anticipating any news on the next round of acquisitions.
They have previously seen 29 years of dividend growth so investors will be keeping a close eye for the announcement next week.”
Kainos, Trading Statement, Thursday 1 September
Sophie Lund-Yates, Equity Analyst, “Kainos is first and foremost a technology company, providing IT, consulting and software solutions. One of the things we like about Kainos is it has a broad mix of different customers, from both the public and private sectors, across both healthcare and commercial customers. This model feeds into the group’s strong underlying demand – it had a £260m contracted backlog last year.
We don’t expect this to be interrupted in next week’s trading statement. A lot of the sorts of products on offer are things companies will still want to spend on, even with the economic outlook looking a bit gloomy.
One thing we will be watching for is any commentary on the margin outlook. Kainos has been sacrificing margins in the name of growth. This isn’t an unusual tactic for a fast-growing tech company, but we’d like some further information on this strategy.”
FTSE 100, FTSE 250 and selected other companies scheduled to report
| 29-Aug | |
| No FTSE 350 reporters | |
| 30-Aug | |
| Bunzl | Half Year Results |
| 31-Aug | |
| No FTSE 350 reporters | |
| 01-Sep | |
| Kainos | Trading Statement |
| 02-Sep | |
| Ashmore Group | Full Year Results |
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.
