Companies Reporting: TUI, Barclays, Dunelm, Centrica

Our regular look at the FTSE 350 and a selection of other companies reporting from 13th – 17th February 2023

• TUI sees a take-off in bookings
• Barclays looks to move on from its run in with the US regulator
• Dunelm continues to offer good value to squeezed shoppers
• Centrica aims to continue its turnaround

TUI AG, Q1 Results, Tuesday 14 February

Susannah Streeter, head of money and markets, Hargreaves Lansdown: ‘’TUI [LON:TUI] isn’t yet basking on a sun lounger, but it’s benefiting from a take-off in bookings and, finally, pent-up demand has moved the travel giant out of the emergency exit row. Higher revenue meant underlying operating profit was €1 billion, compared to a loss of €97 million.

These are welcome rays of recovery, and the recent performance of European based airlines bodes well for the sun to keep shining for TUI. All segments of the business have returned to profits for the first time since the pandemic and investors will be keeping a close watch on that trend continuing, especially given the debt and state aid TUI took on during the pandemic.

Given the severe turbulence TUI experienced, it’s not going to be a completely smooth journey ahead. As holidaymakers sniff out the best deals, rivals will be crowding the marketplace with offers and its tricky to map demand as the household squeeze continues. Although the DIY booking approach may appeal to cash strapped consumers, which could provide a headwind, passengers stung by last summer’s airline cancellations might be willing to pay the price of ATOL protection which package holidays offer.’’

Barclays, Full Year Results, Wednesday 15 February

Matt Britzman, equity analyst, Hargreaves Lansdown: “Barclays’ LON:BARC last set of results, and those of all the major banks for that matter, caught headlines for the hundreds of millions set aside in readiness for an increase in loan defaults. $400m was the non-cash hit to profit that Barclays put through its accounts in the third quarter, investors will be hoping that number proves sufficient.

On the flip side, higher interest rates helped push net interest margins up to 2.78% which provided a boost to profit. But Barclays isn’t as exposed to interest rates as some of its peers though, due to its large corporate and investment banking arm. That’s been a benefit while rates were low, as revenue from fees, commission and trading has plugged a gap.

In the new world of higher rates, we’ll be watching closely to see how investment banking performance is holding up. The market environment for raising capital in public markets has shifted and combined with tough comparative periods, investment banking income has been falling. “

Dunelm Group, Half Year Results, Wednesday 15 February

Susannah Streeter, head of money and markets, Hargreaves Lansdown: ‘’Dunelm LON:DNLM has shown hardiness amid the cost-of-living headwinds. Its product range proved to be the right mix as customers navigated the cost-of-living crisis and the cold snap, with its winter warm range of goods proving appealing.

Rising input costs are still a challenge, with margins having come under more pressure. And despite its value offering in popular retail parks, it is not immune to the current challenging environment as shoppers tighten their belts.

Investors will want to know whether full year guidance remains intact and how Dunelm is navigating changing retail trends, as online sales have started to stagnate. It will need to keep a razor-sharp focus on catering for squeezed shoppers, while still offering good value, to stop a drift away to bargain out of town chains which offer homeware in with a grocery mix.”

• UK Stock Market News: Barclays, Unilever, Coca-Cola
• UK Stock Market News: Dunelm, Bellway, BP
• Companies Reporting: Barclays, BAT, Unilever, NatWest

Centrica, Full Year Results, Thursday 16 February

Aarin Chiekrie, equity analyst, Hargreaves Lansdown: “When Centrica’s LON:CNA full-year results are announced next week, underlying earnings per share (EPS) are expected to be above 30p, with closing net cash of more than £1bn.

Centrica owns British Gas, Britain’s biggest household supplier. The more detailed full year results should also give a clearer picture on British Gas’ retail division and profits. If customers struggled to pay their bills during the winter period amidst cost-of-living pressures, profitability in this area is likely to be impacted.

The groups in a much better place than it was just a few years ago, and that’s reflected in a healthier looking balance sheet. But there’s still a lot of progress to be made. Next week’s results will show whether Centrica is continuing to take steps in the right direction.”

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