Here’s our regular look at the FTSE 350 and a selection of other companies reporting from 4 – 8 July 2022.
- Currys looks to deliver on downgraded profit guidance
- Entain will show if it can balance in-person and online demand.
- Sainsbury’s should shed more light on how consumer finances are shaping up
- Persimmon will prove whether their positive estimations for full year completions are on track.
Currys – Full Year Results, Thursday 7 July
Matt Britzman, Equity Analyst, “Back in January, the UK tech market was facing uncertain demand and supply chain disruption, which led management to cut full-year guidance. The group expects underlying profit before tax to come in around £155m next week. Broader conditions have deteriorated since January though, so that number looks to be under a lot of pressure.
Consumer confidence being at the lowest point for years doesn’t bode well for a business selling large, high value items such as TVs and washing machines. In store sales had been returning, which attract higher margins. It’ll be interesting to see if that trend continues or whether the tight margins are feeling even more pressure from a higher proportion of online sales.
Challenges aside, there are some positive trends to look out for. Market share has been growing despite a softer overall market and the group’s expecting to finish the year with at least £100m in net cash on the balance sheet.”
Entain, Q2 Trading Statement, Thursday 7 July
Laura Hoy, Equity Analyst, “The big question when Entain reports will be over how demand is shaking out in the post-pandemic world. It has been reported that in-person gaming is coming back to pre-pandemic levels. Some of this came at the expense of higher-margin online gaming, and it will be revealed if this trend has continued. If so, we could see margins start to come under pressure, as the cost to run bricks-and-mortar shops weighs on margins.
Debt is something else to keep an eye on, with a spate of acquisitions likely pushing it beyond the 2.4 times cash profits reported at the full year. This could be made all the more uncomfortable if profitability takes a hit.
Entain should hopefully deliver another set of solid results, but with the macroeconomic picture continuously worsening it’s possible the group may not live up to the market’s lofty expectations.”
J Sainsbury, Q1 Trading Statement, Thursday 7 July
Matt Britzman, Equity Analyst, “J Sainsbury’s first quarter results should shed more light on how consumer finances are faring in the wake of growing living costs. Tesco has reported that shopping behaviours are starting to shift, so it’ll be interesting to see if J Sainsbury is seeing similar trends. The group’s been pushing hard to disrupt the value space and now is the time to see if that shift means customers remain loyal despite shrinking wallets.
Any commentary on cost inflation will carry weight. It will be revealed whether the current strategy of raising prices after competitors is still viable. And, more importantly, what impact it’s likely to have on margins, should costs run higher than expected.
There will also be an eye on how general merchandise is performing. Supply chain disruption and a general decline in certain markets have kept a lid on sales recently. J Sainsbury finds itself more exposed than some peers given its ownership of Argos and the huge integration program that’s in progress.”
Persimmon, Trading Statement, Thursday 7 July
Susannah Streeter, Senior investment and markets analyst, ‘’Demand for houses has remained super-strong this year but investors will be highly sensitive to any indication that buyers are becoming more cautious given the ramping up in interest rates. Despite its robust performance, shares have fallen by 34% since the start of the year, as worries about a housing slowdown persist. For now, the wind is blowing in a more agreeable direction for Persimmon in terms of its operational performance and at the last estimate full year completions were set to rise between 4-7%, so there will be keen interest in whether that target is still on track.
Cost pressures from inflation and supply chain issues remain, but Persimmon has an advantage here given that the company owns a range of manufacturing facilities that help alleviate this more challenging environment. So far, its industry-leading margins have stayed intact and there will be a keen eye trained on whether that important metric can be maintained.’’
FTSE 100, FTSE 250 and selected other companies scheduled to report
|No Scheduled FTSE 350 Reporters|
|No Scheduled FTSE 350 Reporters|
|Redde Northgate||Full Year Results|
|Baltic Classifieds Group||Full Year Results|
|Currys*||Full Year Results|
|Entain*||Q2 Trading Statement|
|Ferrexpo||Q2 Production Statement|
|J Sainsbury*||Q1Trading Statement|
|John Wood Group||Q2 Trading Statement|
|Victrex||Q3 Management Statement|
|Watches of Switzerland Group||Full Year Results|
|Vistry Group*||Trading Statement|
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.