Companies Reporting: Imperial Brands and Tesco

Our regular look at the FTSE 350 and a selection of other companies reporting from 10-14 April.

• Will faster profit growth still be in sight for Imperial Brands?
• Tesco will shed light on how customers are reacting to inflation

Imperial Brands, Trading Statement, Thursday 13 April

Derren Nathan, head of equity research, Hargreaves Lansdown: “Imperial Brands LON:IMB managed to eek out low single-digit sales growth and underlying operating profits last year despite a fairly hefty fall in tobacco volumes. It’s expecting profit growth to accelerate this year but for the first half to be flat. That’s due to increased investment in new products and the impact of Imperial’s exit from the Russian market. If next week’s half-year trading update comes up short, it will make those full-year targets more challenging.

We’ll be paying particular attention to the group’s ability to put through further price rises, with competitors reporting signs that smokers were abandoning their favourite brands for cheaper alternatives. We’ve already seen Imperial launch the second half of a £1bn share buyback programme this month. We hope this has been matched by continued strong cash generation.”

Tesco, Full Year Results, Thursday 13 April

Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown: “Next week, we’ll hear how the UK’s biggest retailer Tesco LON:TSCO is getting on. Grocery inflation is well documented and is running at a huge 17.5%. That means customers are seriously feeling the pinch when it comes to their food shopping and Tesco’s scale means it’s in the eye of that storm. Remaining competitive in this environment makes inflating margins difficult. Last we heard, Tesco expects to report underlying retail profit of £2.4 – £2.5bn for the full year, and we’ll find out if that’s been the case.

Another figure to watch out for is market share. As the market leader, the group has market share of over 27% but, because of tough conditions, supermarkets like Aldi are enticing new customers. We don’t expect the league tables to be upended. But it will be important to assess if Tesco’s share has been nibbled away at, which would suggest consumer pressure is higher than previously thought.’’

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