Companies Reporting: Fevertree Drinks, Vistry, JD Wetherspoon

Our regular look at the FTSE 350 and a selection of other companies reporting from 20 – 24 March 2023.

• Fevertree Drinks aims to sparkle again
• Can Vistry weather the storm?
• Will the froth come off for JD Wetherspoon?

Fevertree Drinks, Full Year Results, Wednesday 22 March

Aarin Chiekrie, equity analyst, Hargreaves Lansdown: “Fevertree Drinks LON:FEVR last trading update was a mixed bag. Revenues fell in the group’s core UK market, which accounts for around 34% of sales. The group blamed train strikes in the run up to Christmas for reducing bar and restaurant sales, which ultimately put a lid on UK revenue. But in the US, it was a different story. Across the pond, revenues bubbled up by double-digits compared to last year. Investors will be eager to see if this growth was sustained when the company reports full-year results next week.

Inflationary cost pressures were a thorn in the group’s side last year. Energy prices are a big input cost in making glass bottles, and when 80% of your sales are bottled in glass, any fluctuation in energy prices is bound to have a material impact on your costs. The group’s already said it expects another year of double-digit cost inflation, which has the potential to really squeeze margins and hurt profits. Next week’s results should provide more insight into how the group will manage this important risk moving forward.”

Vistry, Full Year Results, Wednesday 22 March

Aarin Chiekrie, equity analyst, Hargreaves Lansdown: “It’s been a bumper start to the year so far for Vistry LON:VTY and its investors, with the shares up more than 18% year to date. This might reflect some of the pessimism around housebuilders being unwound as conditions have been slightly better than previously forecast. However, there’s still a lot of challenges ahead and this recent rally is not a guide to the future.

In January’s trading statement, group revenues rose 6% to £3.8bn, helped by higher completions and average selling prices. Careful cost management helped combat build cost inflation of 8-10% as underlying operating profit grew 4% to £1bn last year. But the outlook for 2023 isn’t so rosy. Vistry’s sales volumes showed real signs of weakness, with early figures coming in well below 2022 levels. Next week’s results should give investors a better idea of how the group’s preparing for these challenges.”

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J D Wetherspoon, Half Year Results, Friday 24 March

Derren Nathan, head of equity research, Hargreaves Lansdown: “J D Wetherspoon LON:JDW had a solid first quarter, but that was against an Omicron-impacted festive season in the prior year. Whilst customers battle with the ongoing cost-of-living crisis, the comparatives are getting harder. The hospitality industry is also suffering from sharp rises in costs for labour, food, energy and maintenance. Investors will look to see if trading deteriorated in the second quarter and whether the group retains its cautious optimism for the rest of the year. Wetherspoon has some scope to raise prices but needs to balance that against alienating its customers.

The group’s also shrinking its pub estate with a view to keeping the best performers and reducing competition between outlets. Investors will be looking out for progress on this front. Disposals will also reduce pressure on the balance sheet. Meanwhile, supply is coming out of the market as smaller pub companies fight for survival. Wetherspoon could come out of this in a stronger position, but the short term remains challenging.”

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