Companies Reporting: Sainsbury, BT, Marks and Spencer

Our regular look at the FTSE 350 and other companies reporting from 4 November – 8 November.

• • BT eyes the end game for fibre broadband roll-out, but road ahead looks tricky
  • Can Marks & Spencer stem the losses on its Ocado joint venture?
  • J Sainsbury hoping volume-led sales growth continues

Marks & Spencer, Half Year Results, Wednesday 6 November

Aarin Chiekrie, equity analyst, Hargreaves Lansdown “Marks & Spencer LON:MKS has done a great job at breathing new life into the business over the past couple of years. Its food and clothing propositions have been sharpened, helping the group steal market share away from its competitors. Operations have also been streamlined, improving both profitability and the balance sheet enough to restore dividend payments last year.

Analysts expect to see this upward trajectory continue when results are announced next week. With no full-year guidance given, it’ll be important to see at least some progress on all fronts. Markets have forecast first-half revenue to grow around 5% to £6.4bn, which looks achievable. An update on M&S’s joint venture with Ocado will be of interest after relations were said to be souring and losses widening, so some better news on this front would be viewed favourably.”

• Three Quick Facts: Persimmon, Marks & Spencer, JD Wetherspoon

BT Group, Half Year Results, Thursday 7 November

Matt Britzman, senior Equity analyst, Hargreaves Lansdown “BT LON:BT.A finds itself in a period where investors can see an end to the massive investment in fibre buildout, which should bring a material improvement in areas like cash flow, but the current market remains a challenge. Openreach is a key differentiator to peers, and broadband line losses will be a key area to watch in next week’s half-year results after the 196,000 decline in the first quarter. Consensus is looking for around 167,000 losses over the second quarter. Analysts will also have one eye on commentary to see if there are any early signs of an improving broadband market that could help to stem those declines moving forward.

From the consumer angle, inflation-linked price hikes have been a tailwind for the past couple of years. That’s now come to an end. Management has already warned that the first half could see weakness as newer customers, or those renewing, are placed on lower-priced contracts given inflation has eased. Weakness is expected, and guidance into the second half of the year will be key.”

• Is now the time to part company with BT shares?

J Sainsbury, Half Year Results, Thursday 7 November

Aarin Chiekrie, equity analyst, Hargreaves Lansdown “Sainsbury’s LON:SBRY put in a good showing in its first-quarter results, and investors were relieved to see a volume-driven uplift in the grocery business. But consumers haven’t been as hungry for clothing and general merchandise, which both posted declines in the period. And thanks to its ownership of Argos, its extra exposure on the general merchandise front has weighed on overall performance.

Looking to next week’s results, Sainsbury’s is likely to continue to claw small gains in market share. That’s thanks to its huge push to improve its products and value perception, which is helping to draw in more customers and drive volumes higher. Things like Nectar prices and Aldi price matches have so far worked at plugging the exit of customers too. But just how much of an impact this investment in low prices is having on profitability is something to be viewed with interest.”

• Three Quick Facts: BT, Sainsbury, Trainline

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