Companies Reporting: Ocado, Dunelm, Burberry, Sage

Our regular look at the FTSE 350 and a selection of other companies reporting from 15-19 January

• Experian should shed light on lending conditions in the US and UK
• Ocado’s Christmas sales will be under the microscope
• Expectations are high for Sage
• Will Christmas trading provide a welcome boost for Currys?
• Will Dunelm bounce back from a challenging 2023?
• Burberry could see further pressure amid global Luxury slowdown

Experian – Q3 Trading Statement, Tuesday 16 January

Matt Britzman, equity analyst, Hargreaves Lansdown “Experian put in a decent showing over the first half and next week’s third-quarter trading will shed light on whether that trend continued over the latter parts of the year. Investors will be watching closely for updates on lending criteria in the US. Tighter conditions have been a drag on demand but, with a soft landing potentially on the cards for the US, things could start to improve over 2024.

Outside of the core US market, Latin America has been the standout. Experian’s looking to capitalise on a region that’s undergoing major upgrades to its financial services sector. Growth’s been impressive, a trend that investors will be keen to see continue.”

Ocado Group – Q4 Trading Statement, Tuesday 16 January

Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown “Supermarkets enjoyed their best Christmas since 2019, according to new data. But this boom hasn’t been felt equally amongst the grocers. Ocado’s sales rose 5.5% in the four weeks to Christmas Eve, which is a lot slower than the rate of growth seen at some physical stores.

It will be important to monitor how much of Ocado’s growth is coming from volume over price. It’s clear that supermarkets have been heavy handed in their use of promotions and this has implications for margins. Ocado isn’t a cheap-and-cheerful brand, so the pressure may well have been more acute. The joint ownership with M&S will have helped tills ring, as consumers are more likely to treat themselves over the festive season – but the extent of this helping hand is yet to be seen.

As ever, Ocado’s core business case continues to be dominated by its Solutions business. A proven record of more deals being signed in this arena is what really has the ability to move the share price.”

• Companies Reporting: easyJet, Burberry, Netflix
• UK Stock Market News: Ibstock, Dunelm, Pearson
• UK Stock Market News: Experian, Currys, Fiinu

Sage – Q1 Trading Statement, Thursday 18 January

Steve Clayton, head of equity funds, Hargreaves Lansdown “Coming hot on the heels of rapturously received full year figures, the group may struggle to impress, for expectations are set high. Below the surface, though, we expect to see Sage continuing to grow its strong base of recurring revenues and building on Sage Intaact’s class-leading growth rates of recent quarters.

The group is well down its path toward becoming a Software as a Service platform business and further success should lead to ever stronger free cash generation by Sage, highlighting its position as the UK markets leading pure-play technology group.”

Currys – Q3 Trading Statement, Thursday 18 January

Aarin Chiekrie, equity analyst, Hargreaves Lansdown “Back in December, investors heard that Currys’ first-half revenue slipped 4% lower, to £4.2bn, with sales declining across all regions. Consumers have been struggling to justify as much discretionary spending on TVs, computers and gadgets amidst a cost-of-living crisis. Next week’s results covering the peak Christmas trading period will be key if investor confidence is to be restored.

To help offset the lower demand, Currys is shifting its focus towards more profitable sales at the expense of market share. Coupled with major cost-cutting efforts, the group’s largely been able to protect its margins so far, but cost-cutting isn’t a long-term solution. Neither is the sale of its Greek electronics retailer for £156mn of net cash. However, this does strengthen the balance sheet and buy the group some breathing room. Investors are expecting an update on management’s plans for the extra cash by the end of the financial year, with some form of dividend as a possible way to return cash to shareholders.”

Dunelm – Q3 Trading Statement, Thursday 18 January

Susannah Streeter, head of money and markets, Hargreaves Lansdown ‘’It’s been a challenging period for Dunelm as cost-of-living pressures saw shoppers rein in spending. The home furnishing retailer also had to grapple with higher costs in 2023 amid softening demand, and saw annual profits fall by 7.8%. But, in the Autumn, it flagged a brighter outlook as inflationary pressures eased, and investors will be keen to see evidence of this show up in the latest update.

However, it’s clear that the retail environment remains unpredictable. Even as inflation slows, and better mortgage deals land, the housing market is super-slow which may still act as a drag on sales. There will also be a keen eye trained for any signs of delays to new stock, given the disruption to shipments in the Red Sea with other retailers warning of potential rising costs as a result.”

Burberry – Q3 Trading Statement, Friday 19 January

Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown “Burberry disappointed the market at its first-half results in November. Slowing global demand for luxury goods, coupled with higher costs, led to disappointing developments for both profit and free cashflow.

Investors don’t expect trends to have reversed. Next week, there should be more clarity on whether full-year targets remain in place – the group had warned that further weakness could move the goalposts. Burberry isn’t the best-positioned name in the sector, as there are other larger and more diversified names to compete with. Investors believe that some further downside could be on the cards and will be paying particular attention to margins.

While the short-term potentially holds some bumps, investors would like to see how well recent ranges have been received. Burberry’s artistic turnaround has been impressive and, over the long-haul this is where growth can be unlocked.”

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