skip to Main Content

Companies Reporting: Persimmon, Marks & Spencer, Disney


Our regular look at the FTSE 350 and a selection of other companies reporting from 6-10 November.

  • Investors will be hoping for a sweet outlook from Associated British Food’s sugar business
  • Insurance profitability and policyholder levels in the spotlight for Direct Line
  • Persimmon margins are likely under the cosh
  • Streaming losses will be in the spotlight at Disney
  • Will momentum continue at Marks & Spencer?
  • National Grid results are unlikely to set  pulses racing
  • The cost-of-living crisis exacerbates problems for WH Smith

Associated British Foods, Full Year Results, Tuesday 7 November

Aarin Chiekrie, equity analyst, Hargreaves Lansdown: “The key Primark business has benefitted from a changing retail landscape over the past few years, especially with the demise of Debenhams and Topshop. That’s driving expectations of 9% like-for-like sales growth at Primark, up to around £9.0bn for the full year. Price hikes are also playing their part, and new store openings are performing well too. Margins here are catching the tailwinds of falling costs – with energy, freight, and fabric prices all now much lower than their peak levels. In next week’s results, Associated British Foods expects to see underlying operating profits come in moderately ahead of the previous year.

The sugar businesses will be in focus too. Unhelpful weather last year severely dented production volumes and ultimately caused a drag on profits. Since then, sugar volumes and prices have picked back up, so investors are keen to hear how much progress has been made to date, and what the group’s outlook is for the new financial year.”

Direct Line, Q3 Trading Statement, Tuesday 7 November

Matt Britzman, equity analyst, Hargreaves Lansdown: “Investors will be approaching Direct Line’s third-quarter trading update with a sense of cautious optimism. Something they haven’t had the luxury of heading into results over the past couple of years. It’s been tough going; claims numbers have been running high, while cost inflation’s meant underwriting profitability has been under serious pressure. But, following some positive updates back at the half-year mark, it looks like things are trending in the right direction.

There’s a couple of things to look out for. First is progress on returning insurance back into the land of profitability. New policies are being written at levels that look healthy. It’ll take time to feed through but there could be early signs, or at least ongoing commentary, to suggest that trend remains. The second will be policy numbers. A dip should be expected as price hikes get pushed through and consumers shop around – the magnitude of any move will be important.”

Persimmon, Trading Statement, Tuesday 7 November

Steve Clayton, head of equity funds, Hargreaves Lansdown: “Following Vistry’s news that market conditions were beginning to necessitate write-downs against some of their land holdings, Persimmon’s views on this matter will be eagerly sought by investors. Volumes are likely to remain under pressure and, with mortgage approvals weakening, the overall picture is likely to be muted. But Persimmon possess substantial net cash and few Land Creditors so should be able to be selective buyers of land if the market does weaken further. In the near term though, margins are likely to be under the cosh, though Vistry did offer some hope that cost pressures were now easing.

Many see it as unlikely, however, that Persimmon will say anything that proves more important to the stock price than what the Bank of England does next.”

Disney, Q4 Results, Wednesday 8 November

Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown: “All eyes will be on the streaming business for Disney. Operating losses have been in the spotlight for this area of the business, and investors would like to see strong momentum here – especially given CEO Bob Iger was brought out of retirement to stem the profit leaks. But within that, analysts hope that cost-cutting hasn’t gone too far, doing so risks limiting the appeal of content offerings which is a risky move in the current competitive environment.

Last quarter, Disney+ subscriber numbers disappointed. This could largely be put down to the loss of popular cricket rights in India, but investors will be hunting for clues that things have stabilised.

Of course, keen eyes will be monitoring performance at the group’s theme parks. There’s optimism that ticket and merchandise sales have continued climbing, but the outlook statement will be important to understand if economic uncertainty’s having any impact on next quarter’s expectations.”

Marks & Spencer, Half Year Results, Wednesday 8 November

Susannah Streeter, head of money and markets, Hargreaves Lansdown: “Investors will want to know if momentum is continuing at Marks and Spencer after a succession of wins illustrating that its turnaround strategy is paying off. It grew market share in both its food and clothing and home businesses, its two largest divisions in the first quarter. The focus of the M&S brand, on both quality and price, has been a clear advantage and its stock selection has received the thumbs up from shoppers.

Shrinking its estate, and closing larger stores in town centres, is a strategy bearing fruit, with smaller shops in retail parks offering easy to use click and collect services. The cost-of-living environment is still highly challenging though, which is set to stay. The recent warm weather in September has been causing havoc with spending patterns, so the shift to the new season fashions may have been delayed, which risks showing up in weaker clothing sales, as winter woollies hang around on shelves for longer.

Demand for M&S food has remained strong and is arguably more protected from the rising inflation we’re seeing at the moment. At a more premium end of the market, M&S’ core customers aren’t as sensitive to price. M&S has potential to gain from an increasing trend of people treating themselves while dining in, rather than spending in restaurants.”

National Grid, Half Year Results, Thursday 9 November

Steve Clayton, head of equity funds, Hargreaves Lansdown: “These results are unlikely to set the pulse racing. Broker J.P. Morgan has issued a note to clients stating they expect them to be a “non-event”, with guidance left unchanged for the full year. Looking to the longer term, Grid should be able to talk about plenty of opportunities. The UK’s transmission network needs to evolve to fit a future where generation is more decentralised and fast shifting through the day as renewables output ebbs and flows with the winds and the clouds. That creates the longer-term growth story for Grid; rebuilding the network and earning returns on the incremental investment required.

In the short term, operating profits are expected to be lower year on year, but the company is expected to continue with its dividend policy of matching UK CPIH inflation, suggesting a 9% hike in the half year payout.”

WH Smith, Full Year Results, Thursday 9 November

Susannah Streeter, head of money and markets, Hargreaves Lansdown: “The cost-of-living crisis has exacerbated problems for WH Smith in its high street stores and this trend is set to come through loud and clear in these results. The retailer’s mid-price points in such a competitive landscape are not cutting it at a time when shoppers are so keenly rooting out value ranges. Even Wilko, with its lower cost stationary ranges, collapsed, so WH Smith will have to work a lot harder on driving down prices to entice in custom.

Sales at its travel hubs, across rail stations and airports where is has much more of a captive market are still superbuoyant though, offsetting weakness in the more traditional shopping locations. Travelers are prepared to pay for extra little treats, splash out on paperbacks or buy forgotten bits of electronic kit to make their trips that bit more enjoyable. WH Smith is moving in the right direction by opening new stores in the US and across the travel network and investors are likely to react positively to signs of a faster pivot here.”

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

No FTSE 350 Reporters
3I Infrastructure Half Year Results
Associated British Foods Full Year Results
Beazley Q3 Results
Direct Line Q3 Trading Statement
IWG Q3 Trading Statement
Persimmon Trading Statement
RS Group Half Year Results
Watches of Switzerland Half Year Results
ITV Q3 Trading Statement
Hiscox Q3 Trading Statement
J D Wetherspoon Q1 Trading Statement
Marks & Spencer Half Year Results
Disney Q4 Results
3i Group Half Year Results
Apax Global Alpha Q3 Results
AstraZeneca Q3 Results
Auto Trader Half Year Results
B&M Half Year Results
Domino’s Pizza Q3 Trading Statement
Endeavour Mining Q3 Results
Flutter Entertainment Q3 Trading Statement
IMI Interim Management Statement
Indivior Q3 Results
John Wood Group Q3 Trading Statement
Lancashire Holdings Q3 Trading Statement
National Grid Half Year Results
Tate & Lyle Half Year Results
Taylor Wimpey Trading Statement
TBC Bank Q3 Results
Urban Logistics REIT Half Year Results
Wizz Air Half Year Results
WH Smith Full Year Results
No FTSE 350 Reporters

Like this article? Sign up to our free newsletter.

This article does not constitute investment advice. Do your own research or consult a professional advisor.

The Armchair Trader's 'How to' Guides

In-depth Reports

Detailed reviews of selected companies and investment trusts.

Thanks to our Partners

Our partners are established, regulated businesses and we are grateful for their support.

FP Markets
Back To Top