Our regular look at the FTSE 350 and a selection of other companies reporting from 08 – 12 May 2023.
- Can Direct Line get back on track?
- Streaming in the spotlight at Walt Disney
- Recent rights issue puts more pressure on TUI performance
- ASOS battles a raft of short-term challenges
- Wetherspoons in good stead for Coronation celebrations
Direct Line Group, Q1 Trading Statement, Tuesday 9 May
Matt Britzman, equity analyst, Hargreaves Lansdown: “2022 was a difficult year for Direct Line LON:DLG, and investors will be hoping for some glimpse that there’s been a let up in either the number of claims or claims inflation over the first quarter of 2023. Tough conditions pushed the Group’s combined operating ratio over 100% last year, essentially signalling loss-making territory for insurance businesses.
Unfortunately, there’s no easy route back, and pricing actions are already in play to try and help restore margins. Direct Lines brand should help on that front, and there has already been more aggressive price action than taken by some of its peers. In the hyper competitive world of insurance, the issue with that approach is that brand power only goes so far, and there will likely be a drop in volumes as customers shop around.”
Walt Disney, Q2 Results, Wednesday 10 May
Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown: “All eyes will be on the streaming division next week. Disney+ is nursing heavy losses and investors are looking for a clear path into profit-making territory. A key component of this will be subscriber growth, which is the main metric that will move the dial in terms of Disney’s NYSE:DIS valuation next week. The group has seen a 13% uplift since the start of the year and that makes it more sensitive to knocks.
Theme parks can’t be forgotten where Disney’s concerned. The reopening of borders should provide a welcome boost to the Asian business, and we’re cautiously optimistic that parks elsewhere will have put in a resilient showing despite a tough economic backdrop for consumers.”
TUI, Q2 Results, Wednesday 10 May
Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown: “Summer holiday booking season is getting underway. Investors will be watching commentary on forward bookings for the holiday giant very closely next week. It was last reported that TUI [LON:TUI] was successfully increasing its prices, which was helping to offset soaring costs, but we’d like to see to what extent this has continued. Trips abroad are important to consumers, but there’s a limit to how far wallets can be pushed at the moment.
TUI’s balance sheet is very stretched, which is why it recently came cap in hand to investors to the tune of €1.8bn. A disappointing summer season could see knocks to the group’s valuation. The dilutive rights issue means investors will be wanting to see progress rather than stagnation, more so than usual. “
Asos, Half Year Results, Wednesday 10 May
Susannah Streeter, head of money and markets, Hargreaves Lansdown: “ASOS LON:ASC has been battling a raft of short-term challenges and, with cost-of-living headwinds continuing to squeeze budgets, it may struggle to turn a significant corner in these results. However, conditions are improving with delivery challenges being overcome now that Royal Mail has reached agreement in principle with unions.
ASOS has also been taking steps to trim costs by cutting excess stock levels, winding down storage facilities and reducing headcount. And investors will be keen to see whether these savings are on track to help the group return to profitability in the second half of the year.
Poor weather dented sales on the high street in March, but online sales were more resilient which could bode well for the group’s performance, with shoppers overall a bit keener to spend than expected back in the Autumn. The breadth of its value ranges should also be an advantage when consumers want to splash a bit of cash but are still being careful. Investors will also want to see if new marketing strategies to drive growth in underperforming markets like the US are showing signs of paying off.”
- Companies Reporting: TUI, CVS Group, JD Sports
- Companies Reporting: Watches of Switzerland, Barratt Developments, Currys
- Companies Reporting: Aviva, Dowlais, TUI
JD Wetherspoon, Trading Statement, Wednesday 10 May
Susannah Streeter, head of money and markets, Hargreaves Lansdown: ’Wetherspoons LON:JDW has also been trying to pivot to a younger and more family orientated demographic which should also hold it in good stead during the Coronation celebrations, and the venues could be a popular place to gather to continue the multi-generational party. Investors will want to see though how the last few months have treated the pub group.
Despite the ongoing price pressures facing consumers, Wetherspoon’s pubs have been trading above pre-pandemic levels. So far there’s no sign of this improvement tailing off and the company’s value proposition should help continue the encouraging trend.”
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
| 08-May | |
| No FTSE 350 Reporters | |
| 09-May | |
| Direct Line Group | Q1 Trading Statement |
| Victrex | Half Year Results |
| 10-May | |
| ASOS | Half Year Results |
| Compass Group | Half Year Results |
| Harbour Energy | AGM Trading Statement |
| JD Wetherspoon | Trading Statement |
| Melrose | Trading Statement |
| Spirax-Sarco Engineering | Trading Statement |
| TUI | Q2 Results |
| Walt Disney Co | Q2 Results |
| 3I Infrastructure | Full Year Results |
| 11-May | |
| Airtel Africa | Full Year Results |
| Balfour Beatty | AGM Trading Statement |
| Deutsche Telekom | Q1 Results |
| Grainger | Half Year Results |
| ITV | Trading Statement |
| John Wood Group | Trading Statement |
| Rolls-Royce | AGM Trading Statement |
| TBC Bank Group | Q1 Results |
| Vivendum | Q1 Trading Statement |
| 3i Group | Full Year Results |
| 12-May | |
| Beazley | Q1 Trading Statement |
