Our regular look at the FTSE 350 and a selection of other companies reporting from 31 July-4 August.
- A strong start to the year means expectations are high for Greggs
- Inflationary pressures push Diageo’s prices up
- Will slowing US consumer spending put a hole in PayPal’s wallet?
- Flu season is around the corner for Haleon
- Scale of revenue declines and demand commentary will be front of mind at Apple
- Will Tritax Big Box’s rising build costs affect the bottom line?
Greggs, Half Year Results, Tuesday 1 August
Matt Britzman, equity analyst, Hargreaves Lansdown: ’’Greggs LON:GRG started the year strong with double-digit growth in like-for-like sales as sausage rolls continue to hit the spot for consumers whose disposable incomes are under increasing pressure. Next week’s half-year results should show a similar story, albeit growth is expected to slow as we move through the year and comparable periods become tougher. Still, markets are looking for 15% revenue growth over the year, so we’ll get an idea next week as to whether that looks achievable or not.
Cost inflation is, as ever, something to watch. 9-10% inflation over the year is what management’s expecting, by no means an easy level to overcome and something worth keeping an eye out for any movement on. It’s being managed well so far, as the group focuses on locking in a range of costs, from electricity to packaging.
Adding to the company’s value proposition, new deals on hot food have been a driving factor of growth – as have extended opening hours and a growing estate. Things are progressing well, and that’s reflected in the valuation which doesn’t leave much room for error.’’
Diageo, Full Year Results, Tuesday 1 August
Steve Clayton, head of equity funds, Hargreaves Lansdown: “These results will be the first results for CEO Debra Crew, who recently stepped up to the role on the passing of Sir Ivan Menezes. Like other consumer goods companies, Diageo LON:DGE has been playing the price/volume game as it seeks to preserve and grow its markets in the face of inflationary pressures. Expect to see revenues growing in low double digits with a low single digit volume decline as the group pushes prices up to offset its own cost increases.
De-stocking, especially in the core US market, is a major swing factor for volumes and analysts will also be looking for reassurance that the group’s premium brands are maintaining their positions. Currencies look to have become a headwind for the year ahead, so watch out for any quantification of the hurdle the group faces here.”
Paypal, Q2 Results, Wednesday 2 August
Derren Nathan, head of equity analysis, Hargreaves Lansdown: “PayPal’s NASDAQ:PYPL latest guidance points to second-quarter revenue growth of between 7.5% to 8%, ignoring the effects of currency movements. PayPal expects underlying earnings per share (EPS) to land between $1.15 and $1.17, reflecting growth of 24% to 26%.
But, with US consumer spending in something of a slump, all eyes will be on the full-year outlook when results are released next week. Underlying EPS in 2023 is expected to grow around 20% to $4.95 but, so far, no outlook for revenues or payment volume has been provided.
PayPal has also given little detail on its plans to improve transaction margins in its unbranded business so, with volumes potentially under pressure, investors are hoping to hear that things are moving in the right direction. They’re also keen to see how the share repurchases program is progressing, with $4bn worth of repurchases expected for the full year. “
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Haleon, Half Year Results, Wednesday 2 August
Steve Clayton, head of equity funds, Hargreaves Lansdown: “All eyes will be on the pace of sales here, which the group have already said are set to slow down into H2, after a particularly strong start to the year. Margin management will be under the microscope, with some disappointed that the early strength in revenues did not feed through to any margin boost. Comparisons will be getting tougher for Haleon LON:HLN, which benefited from a bad flu year in 2023. Investors may be encouraged by signs that 2023 flu is shaping up to be another tough one – if early signs from Australia are any guide.
The only certainty is that, sooner or later, the company will have to contend with a mild flu season. Given that cases are progressing through the courts, analysts do not expect the company to say anything about the ongoing litigation surrounding Zantac.”
Apple, Q3 Results, Thursday 3 August
Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown: “Analysts are expecting Apple’s NASDAQ:AAPL revenue to drop 1.7% to $81.6bn in the third quarter, compared to the previous period. Last quarter Apple beat expectations, but still marked a decline overall, as things like iPads, Macs and Wearables (think Apple Watch), fell. This is perhaps unsurprising given the substantial economic uncertainty swirling. It will be important to monitor the outlook statement for how well demand is expected to hold up, especially for the most important product, iPhones, which have had a more resilient showing lately.
Apple could also give an update on how the production shifts away from China are faring. Analysts aren’t expecting the status quo to have been upended, but further details on how alternative production changes are being handled would be well received.
Finally, there will be a focus on costs. Operating profits shrank 5.5% in the second quarter, partly because of a mushrooming research and development budget. Staying ahead of the curve in tech does take hefty spending, but investors want reassurance the scales aren’t tipping too far.”
Tritax Big Box, Half Year Results, Thursday 3 August
Steve Clayton, head of equity funds, Hargreaves Lansdown: “Attention will be on the valuation of the portfolio, which has been hard hit so far by the yield shift impacting commercial property markets generally in the last year. Operationally, we expect Tritax LON:BBOX to still be facing buoyant occupier demand in a market that remains relatively undersupplied with prime assets. Expected returns from the development portfolio could be at risk given the shifting valuation basis but, with the group largely developing only on a pre-let, the risk should be limited.
More interesting should be commentary on rentals, where rising build costs and strong tenant demand should drive asking rents upward.”
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
| 31-Jul | |
| Heineken | Half Year Results |
| Pearson | Half Year Results |
| Senior | Half Year Results |
| Spectris | Half Year Results |
| 01-Aug | |
| BP | Half Year Results |
| Caterpillar | Q2 Results |
| Coats Group | Half Year Results |
| Diageo | Full Year Results |
| Domino’s Pizza Group | Half Year Results |
| Fresnillo | Half Year Results |
| Greggs | Half Year Results |
| HSBC | Half Year Results |
| Keller Group | Half Year Results |
| Man Group | Half Year Results |
| Pfizer | Q2 Results |
| Travis Perkins | Half Year Results |
| Virgin Money UK | Q3 Trading Statement |
| Weir Group | Half Year Results |
| 02-Aug | |
| BAE Systems | Half Year Results |
| ConvaTec Group | Half Year Results |
| Endeavour Mining | Q2 Results |
| Ferrexpo | Half Year Results |
| Haleon | Half Year Results |
| Ibstock | Half Year Results |
| IP Group | Half Year Results |
| PayPal | Q2 Results |
| Smurfit Kappa Group | Half Year Results |
| Spirent Communications | Half Year Results |
| Taylor Wimpey | Half Year Results |
| 03-Aug | |
| Amazon | Q2 Results |
| Anheuser-Busch Inbev | Q2 Results |
| Apple | Q3 Results |
| Capital & Counties Properties | Half Year Results |
| Helios Towers | Half Year Results |
| Hikma Pharmaceuticals | Half Year Results |
| London Stock Exchange Group | Half Year Results |
| Mondi | Half Year Results |
| Morgan Sindall Group | Half Year Results |
| Next | Q2 Trading Statement |
| Pantheon International | Full Year Results |
| Rolls-Royce | Half Year Results |
| Serco Group | Half Year Results |
| Smith & Nephew | Half Year Results |
| Syncona | Half Year Results |
| Tritax Big Box REIT | Half Year Results |
| Wizz Air | Q1 Results |
| 04-Aug | |
| Capita | Half Year Results |
| Pets at Home Group | Q1 Trading Statement |
| Renewables Infrastructure Group | Half Year Results |
| WPP | Half Year Results |
