Our regular look at the FTSE 350 and a selection of other companies reporting from 19 – 23 September 2022.
- Haleon ready to report their first results as a stand-alone business
- Moonpig should shed light on how inflation is affecting trading
- Kingfisher will reveal if it still expects to hit its previous adjusted profit guidance
- Keywords Studios could give clues to longer term growth outlook and acquisition pipeline
- CVS Group leans on cost-saving initiatives to help offset pressures from inflation
Haleon, Half Year Results, Monday 19 September
Steve Clayton, Fund Manager, HL Select: “Haleon will be reporting their first results as a stand-alone business when they release interim numbers on Tuesday 20 Sept. The group was spun out of GlaxoSmithKline earlier this year and is one of the world’s leading producers of consumer healthcare products. Their brands cover markets from oral health (Sensodyne and Aquafresh), pain relief (Voltarol and Panadol), respiratory (Otrivin), digestive health (Nexium, ENO and Tums) through to vitamins and supplements (Centrum, Caltrate).
The group issued a trading update back in July, so there should be little of surprise in the numbers themselves. Analysts are more likely to be focusing on the legal issues surrounding Zantac, a heartburn treatment once marketed by Haleon’s former parent company. Multiple lawsuits have been filed in the USA, with potentially large damages at stake, although Haleon itself never marketed the product.”
Moonpig, Trading Statement, Tuesday 20 September
Sophie Lund-Yates, Equity Analyst: “Market sentiment towards online greeting card company Moonpig has been weak since the shares listed for the first time in February 2021. We don’t expect this to fully reverse next week. We’ll be specifically looking out for commentary in the outlook on how consumer behaviour is affecting trading. More lucrative add-ons like chocolates may not be making their way to the virtual checkouts as inflation runs rampant. It will also be interesting to hear the predicted impact of any further Royal Mail strikes.
Moonpig’s growth has looked artificially low more recently, as it lapped the pandemic when online card-sending was unsurprisingly very popular. The group’s past this now, and the market is expecting full year revenue to rise around 15.5% to £351m. Next week’s trading statement should shed some light on whether that’s a realistic target.”
Kingfisher, Half Year Results, Tuesday 20 September
Susannah Streeter, Senior Investment and Markets Analyst: ‘’The owner of B&Q and Screwfix had been hammering out a resilient performance despite supply chain problems, which have hit the sector with product availability improving on shelves. Investors will be watching keenly if Kingfisher still expects to hit previous adjusted profit guidance of £770 million for the full year. The more pressing concern right now is the cost-of-living crisis and what implications this will have on the craze for DIY.
Although the surge in sales during lockdowns has dropped off, first quarter sales were significantly ahead of the group’s performance pre-pandemic, up 16% on a three year basis. This shows that a sizeable chunk of customers that picked up a hammer for the first time were still coming back, thanks to their new-found skills and a shortage of labour in the building trade. But there are now tentative signs that the number of amateur builders, painters and carpenters hanging up their tool kits is growing.
Recent snapshots from the ONS have shown falls in sales at household goods stores, which includes furniture, lighting and DIY products. Volatile pricing of raw materials like timber may be partly to blame and soaring inflation is likely to discourage homeowners from undertaking new projects, The red-hot housing market is also seeing signs of turning a corner, with the race of space beginning to ease off so that’s expected to add to a softening of demand for products.
Many DIY projects aimed at carving out working environments at home are also likely to have been completed, as more employees settle into a hybrid rhythm of work. The latest results from Wickes appear also to have bolstered expectations of a continued slowdown in DIY, a worry which is behind Kingfisher’s share slide of 10% over the last six months.’’
Keywords Studios, Half Year Results, Wednesday 21 September
Derren Nathan, Equity Analyst: “Keywords’ position as a ‘one stop shop’ for services to video game developers continues to enjoy robust demand, and the group is expecting to report a 34% increase in half year revenues next week to €320m including 22% organic growth,
Encouragingly, despite the inflationary environment, Keywords isn’t expecting to see margin erosion at the underlying pre-tax profit level. That’s expected to be up over 35% to about €54m. Looking ahead though, Keywords guided last month that margins are moving to historic levels of around 15% as it invests in the business, transitions people and work from Russia, and as more costs (think premises and transport) return with the easing of COVID restrictions. It would be good to get a bit more detail on things that are tracking on this front next week.
Keywords isn’t immune from economic headwinds though and is expecting organic growth to moderate in the second half. We should get more clues as to how much next week.”
CVS Group, Full Year Results, Thursday 22 September
Matt Britzman, Equity Analyst: “CVS operates over 500 veterinary practices across the UK, Ireland and Netherlands. The pet boom during the pandemic, and continued humanisation trends have helped recent performance. Back in July, the group announced full year organic sales up 8% on a like-for-like basis. That doesn’t mean it’s been plain sailing though. Next week’s full year results will show whether cost saving programmes have been effective at offsetting inflation. The group’s expecting to deliver underlying cash profit (EBITDA) margin in line with the previous year.
Servicing growing demand has been a bugbear for the entire industry, with it becoming increasingly difficult to attract qualified vets to take up role openings. CVS ran at a 10.4% vacancy rate last year, up from 8.3% the year before. Commentary from management on how the group expects that trend to playout in the new financial year would be welcome.
A strong balance sheet supports acquisitions, which are a key growth driver for CVS. The group’s already made one acquisition this financial year, a vet practice in Peterborough. It’ll be interesting to hear further news next week on the pipeline, especially relating to overseas expansion.”
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
|Haleon||Half Year Results|
|City of London Investment Trust||Full Year Results|
|Kingfisher||Half Year Results|
|Moonpig Group||Trading Statement|
|Petershill Partners||Half Year Results|
|Keywords||Half Year Results|
|Supermarket Income REIT||Full Year Results|
|CVS Group||Full Year Results|
|JD Sport Fashion||Half Year Results|
|Playtech||Half Year Results|
|Polymetal International||Half Year Results|
|PZ Cussons||Full Year Results|
|European Opportunities Trust||Full Year Results|
|Smiths Group||Full Year Results|
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