Companies Reporting: Vodafone, TUI, easyJet, Currys

Our regular look at the FTSE 350 and a selection of other companies reporting from 13 – 17 May.

• With Vodafone in the midst of a turnaround, can it deliver continued progress?
• Currys banking on a recovery in the Nordics
• Will TUI exit the LSE with a flourish?
• Are easyJet set for a soaring summer?
• United Utilities hoping higher revenues can offset rising costs

Vodafone, Full Year Results, Tuesday 14 May

Matt Britzman, equity analyst, Hargreaves Lansdown “Vodafone’s LON:VOD recent third-quarter results provided some optimism for investors to cling to, but wider issues remain. With the sales of both the Spanish and Italian businesses, Vodafone needs to reset expectations. Management has already warned investors that the dividend will be halved for the coming year, given the smaller operation. Next week’s full-year results and guidance for the coming year should shed light on what the leaner organisation will be able to deliver.

The key German market is a perfect example of the challenges at hand. After more than €20bn of investment, growing service revenue and customer numbers is proving a challenge. The market will be keen to hear any updates on current regulatory changes that mean Vodafone needs to recontract over 8.5mn customers (c. €800mn in revenue).

The portfolio reshuffle and its increased focus on better-performing assets look like positive evolutions. But, with growth hard to come by, markets will need to see sustained progress before getting too excited.”

• Companies Reporting: Ashtead, Currys, TUI
• Three Quick Facts: easyJet, Pets at Home, Mitchells & Butler
• Companies Reporting: easyJet, Halfords, Pets at Home

Currys, Full Year Trading Statement, Tuesday 14 May

Guy Lawson-Johns, equity analyst, Hargreaves Lansdown “Takeover speculation grabbed headlines back in March, but Currys’ LON:CURY shares took a dip on hearing that both interested parties were backing out of talks.

Currys’ performance has been underwhelming in recent times. Consumers are simply struggling to justify discretionary spending on TVs, computers and gadgets. On the plus side, record credit adoption in the UK & Ireland has boosted service revenue. Meanwhile, the prospect of falling inflation and UK interest rate cuts gives some hope that these headwinds could subside.

Key to convincing the market that takeover offers had undervalued business will be a continued recovery in the Nordics. Investors will be keen to hear how performance is shaping up in its second largest territory and what Currys is expecting to deliver in the coming year.”

TUI, Half Year Results, Wednesday 15 May

Derren Nathan, head of equity research, Hargreaves Lansdown “Following the February AGM vote, TUI’s [LON:TUI] days on the London Stock Exchange are numbered, with the main listing to continue in Frankfurt. The final set of results as a London-listed entity will benefit from record first-quarter revenues of €4.3bn, and a maiden first-quarter underlying operating profit, albeit a small one. There’s reason to be hopeful that things have moved in the right direction for the rest of the half.

At the last count, Winter bookings were up 8%, with 4% higher average prices in key markets. Focus will now turn to the all-important summer season, which early indications showed was following a similar trend. But, with just 32% sold at the time of the first-quarter results, investors will be hoping for a much higher number and not at the expense of lower prices.”

easyJet, Half Year Results, Thursday 16 May

Derren Nathan, head of equity research, Hargreaves Lansdown “easyJet’s LON:EZJ latest trading update suggested demand was pushing up seat yields more than expected. Revenue per seat (RPS) was up a healthy 8% in the second quarter. The first half is typically the weaker one for easyJet and doesn’t include the peak trading period. The first-half headline pre-tax loss is expected to land between £340mn-£360mn. A bright point of note is easyJet holidays, where guidance is for pre-tax profit to approximately double to £31mn.

So far, momentum for the more profitable half of the year has been positive. Third quarter RPS is expected to be slightly up, despite the unfavourable timing of the Easter peak. Fourthquarter RPS looked to be well ahead at the last count, with 30% of the increased capacity already sold. A further jump in forward bookings would likely be well-received by the market.”

United Utilities, Full Year Results, Thursday 16 May

Aarin Chiekrie, equity analyst, Hargreaves Lansdown “Back in November, the market heard that United Utilities’ LON:UU. Outcome Delivery Incentives (ODIs) are expected to come in at around £40mn this year, which is roughly £25mn lower than prior group expectations due to exceptionally wet weather. ODI’s are bonuses for delivering above and beyond committed levels of service to customers.

Despite the lower ODI’s, there were no material changes to full-year guidance, so when the group reports results next week, revenue is expected to rise by around £150mn from last year’s base of £1.8bn. This should more than offset an expected £60mn increase in underlying operating costs.

Investors will also be keen to get an update on the cash levels and general balance sheet health. The group has ambitious £13.7bn plans to expand and upgrade its assets between 2025-2030, which will require issuing new debt and pushing debt levels towards the top end of its target range.”

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