Our regular look at the FTSE 350 and a selection of other companies reporting from 25 – 29 March
- Kingfisher is still in repair mode
- Can Fevertree keep profit margin guidance on track?
- Ocado hopes to show further improvement in customer numbers
- Will Carnival’s forward bookings be strong enough to raise guidance?
Kingfisher, Full Year Results, Monday 25 March
Susannah Streeter, head of money and markets, Hargreaves Lansdown ‘’B&Q owner Kingfisher [LON:KGF] is still in repair mode, with its performance damaged by cost-of-living headwinds and a struggling housing market. It cut its full-year pre-tax profit forecast again to £560mn in November as it forecast that conditions would continue to be tough through the winter. It had been shining a light on increased e-commerce activity as a potential saviour for sales going forward, so investors will want to know if this digital momentum has held up.
With interest rates eyed on the horizon, UK house prices stabilising, and buyers and sellers gaining confidence, there’s hope that demand for home makeovers and renovations will rise. But, although around three quarters of earnings are driven by the UK, Kingfisher also needs to see improvements in other markets, like France, where the economic climate hasn’t been clement, and rivals like Leroy Merlin are proving tougher competitors.’’
Pennon Group, Trading Statement, Monday 25 March
Aarin Chiekrie, equity analyst, Hargreaves Lansdown “Pennon’s recent £89mn acquisition of Sutton and East Surrey Water (SES Water) came as a bit of a surprise to markets. The deal’s been financed by cash on hand, but because of SES Water’s high levels of debt, Pennon went out and raised £180mn of cash by issuing new equity shares. This will help to keep total debt levels within the group’s target range, while still providing room for its £2.8bn investment plans over the second half of this decade.
The £89mn price tag looks attractive and helps Pennon [LON:PNN] increase its foothold across Southern England by bringing more than 750,000 paying customers into the fold. But the deal’s still subject to approval by the UK Competition & Markets Authority (CMA). Next week’s trading update should give some insight into how the deal’s progressing, as well as a sneak peek into performance ahead of full-year results in May.”
- Three Quick Facts: Ocado, ASOS, AG Barr
- Three Quick Facts: Pennon, Kingfisher, Virgin Wines
- Companies Reporting: Ocado, Haleon, Taylor Wimpey
Fevertree Drinks, Full Year Results, Tuesday 26 March
Aarin Chiekrie, equity analyst, Hargreaves Lansdown “Fevertree’s [LON:FEVR] recent performance hasn’t given investors much to celebrate. Markets have already heard that full-year revenue came in below prior market expectations, rising by around 6% to £364.4mn, ignoring exchange rates. This was largely driven by a 24% uplift in US sales which more than offset a 1% decline in the UK. The company also flagged that trading across Europe remains challenging, which means the US will need to continue picking up the slack moving forward.
The group has also hinted that underlying cash profits (EBITDA) will come in at around £30mn when full-year results are announced next week. That’s right at the bottom end of its previously lowered £30-36mn guidance. On the bright side, locked-in energy prices and improving efficiencies are adding weight to group expectations that cash profit margins can nearly double to around 15% in 2024. Any tweaks to this guidance next week will be a key driver of market sentiment.”
Ocado, Q1 Trading Statement, Tuesday 26 March
Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown “Ocado Retail [LON:OCDO], half owned by Marks and Spencer [LON:MKS], has seen the wrong type of publicity recently, thanks to a public spat about payments between the two companies. But, for now, nothing has officially changed about the relationship. With that in mind, investors will be looking out for business as usual in next week’s retail trading update.
Last year, the division saw revenue rise 7%, as higher prices offset a reduction in the number of items being bought. With grocery inflation tempering, investors will be interested to see how performance has developed.
There will also be a keen eye on active customer numbers. These were up almost 6% last year and are an important barometer for future demand.”
Carnival, Q1 Results, Wednesday 27 March
Derren Nathan, head of equity research, Hargreaves Lansdown “Carnival’s [LON:CCL] first-quarter results will reveal whether the strong financial progress seen in 2023 has continued. Strong booking momentum seen in the final quarter last year means there’s not much expectation of any slippage. The three months to February are traditionally the cruise ship operator’s quietest period. So, most of the heavy lifting required to meet the full-year underlying cash profit (EBITDA) guidance of around $5.6bn is likely still to be done over the remainder of the year.
Consensus forecasts expect EBITDA to land at a little over $0.8bn in the first quarter, so management will need to see further evidence of solid forward bookings to raise expectations for 2024, especially against a backdrop of rising fuel prices. Given the seasonality, investors are unlikely to see much movement in the company’s net debt pile which totalled $28.2bn at year-end. And for now, it’s doubtful that a return to the dividend list will be on the horizon.”
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
| 25-Mar | |
| Kingfisher | Full Year Results |
| Pennon Group | Trading Statement |
| 26-Mar | |
| A G Barr | Full Year Results |
| Ascential | Full Year Results |
| Bellway | Half Year Results |
| Fevertree Drinks | Full Year Results |
| Flutter Entertainment | Full Year Results |
| John Wood Group | Full Year Results |
| Ocado | Q1 Trading Statement |
| Petershill Partners | Full Year Results |
| Smiths Group | Half Year Results |
| Softcat | Half Year Results |
| WAG Payment Solutions | Full Year Results |
| 27-Mar | |
| Carnival | Q1 Results |
| Endeavour Mining | Full Year Results |
| Ithaca Energy | Full Year Results |
| Playtech | Full Year Results |
| 28-Mar | |
| BBGI Global Infrastructure | Full Year Results |
| International Public Partnerships | Full Year Results |
| 29-Mar | |
| No FTSE 350 Reporters | |
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