Companies Reporting: Moneysupermarket, Barratt Developments

Our regular look at the FTSE 350 and a selection of other companies reporting from 16 – 20 October.

• How will interest rates impact demand at Moneysupermarket?
• Barratt Developments will be looking to build on last year’s performance
• Demand for accommodation ticks along nicely at Whitbread
• Nestle looks to keep a grip on volumes as it pushes prices higher
• Expectations are high for Relx

Moneysupermarket, Q3 Trading Statement, Tuesday 17 October

Steve Clayton, head of equity funds, Hargreaves Lansdown: “Investors will be hoping to see continuing strength in their insurance vertical, offsetting an expected slower pace in Money. It is probably too soon to expect them to be able to talk about energy switching, given competing fixed price tariffs are proving slow to emerge.

The tragic events in the Middle East could push the prospect of a return to an active energy switching market further out. More broadly though, investors will be interested to see how the increase in interest rates is impacting customer demand for the sort of lending products that Moneysupermarket acts as introducer for. Will clients become more inclined to switch providers in search of the better deal, or simply reduce their demand in response to the greater cost?”

Barratt Development, Q1 Trading Statement, Wednesday 18 October

Aarin Chiekrie, equity analyst, Hargreaves Lansdown: “Next week’s trading statement will give an early peek into Barratt Developments’ first-quarter performance. Expect to see sales rates down by double-digits year-on-year, with pricing remaining relatively robust. Build cost inflation’s also expected to cool from 9-10% to around 5% this year, and investors are keen to hear if this has begun to materialise yet. Any early progress on this front would provide a welcome relief to margins.

For the full year, Barratt expects completions to be in the 13,250-14,250 range, weighted slightly towards the second half. That implies a decline of around 17-23% from last year, highlighting the fact that buyers are less willing to step onto the property ladder in the current high mortgage rate environment. But a mammoth net cash position of £1.1bn at the last count gives Barratt plenty of cushion against a near-term market slowdown.”

Whitbread, Half Year Results, Wednesday 18 October

Susannah Streeter, lead equity analyst, Hargreaves Lansdown: “Whitbread has expressed confidence for the year ahead and, with a strong first quarter under the belt, optimism about the half year is relatively buoyant. In the first three months, the Premier Inn owner saw sales growth surge by 15%, helped by the average costs of rooms being pushed up. For now, customers are happy to swallow the price increases, and demand for accommodation is ticking along nicely.

However, concerns are lingering that cost-of-living pressures could start weighing more heavily on appetites to spend and that’s been affecting the share price. So, investors will be keeping a keen eye on future guidance, particularly for the food offering which has shown signs of weakness. However, demand is expected to stay relatively strong, which should be helped by a shift in focus to business travellers, as firms under pressure to keep budgets down may choose the value Premier Inn is reputed to offer, rather than higher-end chains.

That said, the resilience of the consumer when it comes to desires for mini-breaks and longer trips away is showing signs of continuing. The latest credit card data form Barclaycard showed sales in the travel sector surged by 13.2% year on year in September, as spending on experiences like holidays is ringfenced. If Whitbread can reproduce Premier Inn’s success in Germany, this is potentially a bigger growth opportunity so any signs of progress in it has a much smaller footprint here and is yet to turn a profit. About 60% of rooms in Germany are run by private hotels – there’s opportunity for an experienced hotelier like Premier Inn to establish a foothold. Analysts admire the ambitious roll-out plan, and the break-even point doesn’t seem too far out now, but it could be a while before Germany makes meaningful profits.”

Nestle, Q3 Results, Thursday 19 October

Matt Britzman, equity analyst, Hargreaves Lansdown: “Price vs volumes, that’s the game Nestle’s playing right now as it tries to combat higher input costs. To its credit, the strong suite of brands and exposure to resilient markets like pet care, health and coffee have held it in good stead. Consensus is looking for 8.1% organic growth over the first 9 months in next week’s third-quarter results, with higher prices offsetting a tiny decline in volumes.

Management remains committed to the idea that price hikes are pass-through, with higher volumes and better margin products the way to drive shareholder value.

Commentary on the outlook for the rest of the year will be key. Volume comparisons should hopefully get easier from the fourth quarter on, and investors expect some benefits to feed through from the increased advertising spend and streamlined product range toward the end of the year, although of course there are no guarantees.”

Relx, Q3 Trading Statement, Thursday 19 October

Steve Clayton, head of equity funds, Hargreaves Lansdown: “The company have been sending out confident messages in recent quarters about anticipating that above average growth rates will be maintained. So, expectations will be high, which rarely helps on the day. But Relx are also one of the information vendors best placed to use AI to enhance their product offering, especially in their legal division. Investors will be keen to hear how this is playing out and also how AI could change the way their academic and scientific businesses interact with customers.”

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