Companies Reporting: Watches of Switzerland, Barratt Developments, Currys

Our regular look at the FTSE 350 and other companies reporting from from 2 – 6 September 2024.

• Watches of Switzerland has been sideswiped by aspirational shoppers.
• Can Direct Line keep the momentum up?
• Barratt Developments sees niggles of worry surrounding the housing market.
• Currys has a hard slog ahead.
• No surprises expected from Partnership giant Vistry.
• Has early trading kept Berkeley’s profit targets on track?

Watches of Switzerland, Q1 Trading Statement, Tuesday 3 September

Susannah Streeter, head of money and markets, Hargreaves Lansdown “Investors will be looking for further reassurance that Watches of Switzerland LON:WOSG is turning a corner after a torrid time for the high-end jeweller. Like Burberry, it has been sideswiped by aspirational shoppers calling time on luxury purchases amid economic headwinds. It’s also been hit by concerns that Rolex could set up its own network of shops, selling direct to consumers, following its deal to buy jeweller Bucherer AG.

However, sales progress in the US and signs of more stabilisation in the UK have helped stave off a further share decline. With interest rate cuts eyed on the horizon, there will be hope that consumers may be more confident about their personal finances and will splash out on a luxury treat, but ongoing worries about the economy could yet cause more wariness.”

• UK Stock Market News: Watches of Switzerland, Vinanz, Clarkson
• Three Quick Facts: Ashtead, Watches of Switzerland, Ryanair

Direct Line, Half Year Results, Wednesday 4 September

Matt Britzman, senior equity analyst, Hargreaves Lansdown “July’s capital markets day had one core job, to convince investors that medium-term targets were achievable. The renewed focus on core areas, like Motor and Home, and introducing the Direct Line LON:DLG brand to price comparison sites, seem to have done the trick. Recent results have painted a better picture than we’ve had for some time, but there’s a long way to go before this turnaround is complete.

Aggressive price hikes should feed into next week’s half-year results, and investors will be hoping to see ongoing improvement in insurance profitability. One thing to keep a close eye on is how that’s impacted customer numbers. There’s a fine line between protecting profits and pushing too many price-conscious customers out the door.”

Barratt Developments, Full Year Results, Wednesday 4 September

Susannah Streeter, head of money and markets, Hargreaves Lansdown “While Barratt Development’s LON:BDEV foundations look solid, with underlying pre-tax profits for the year just gone looking set to exceed the group’s previous expectations, there are niggles of worry about the trajectory for the housing market. Reservation rates and buyer sentiment appear to be improving, and there is fresh hope that the issues tying housebuilders’ hands can be unwound with reform of the current planning rules looking key to an uplift in activity.

However, the latest downbeat assessment of the UK’s finances by the new government sent a wobble through housebuilding stocks amid concerns that it could prompt fresh wariness among buyers. Already fewer homes being sold, and at reduced prices, have meant less cash coming in the door. And incentives used to boost sales have also weighed on margins. A further easing of mortgage rates will be needed if activity is to pick up significantly.”

Currys, Trading Statement, Thursday 5 September

Susannah Streeter, head of money and markets, Hargreaves Lansdown “With shop prices falling in August, prompted by a reticence among consumers to buy electronics, it looks like it’s still going to be a hard slog for Currys LON:CURY ahead. Investors will want to know whether, in this difficult climate, the company will be on track for a 10% rise in full-year profit. There have been some brighter spots, such as a strong recovery in the Nordic region and the group’s services channels, offering a higher margin than goods sales, helping to relieve pressure. But with pessimism growing about the prospects for the UK economy, shoppers might be that bit more wary about splashing out on bigger ticket items. The group has been trying to mitigate this reticence by focusing on growing more profitable sales and its cost-cutting programme has been successful, but consumer electronics is set to continue to be a challenging place with spending power still under pressure.”

Vistry, Half Year Results, Thursday 5 September

Aarin Chiekrie, equity analyst, Hargreaves Lansdown “Vistry’s LON:VTY transformation into a Partnerships giant, which specialises in providing affordable housing, has helped it put in a resilient showing of late. In a tough market, sales rates have improved over the first half of the year, and total completions were up 8%, to 7,750 new homes.

Analysts don’t expect much in the way of surprises when results are announced next week. First-half underlying operating profit is expected to rise around 10% to £227mn, helped by increased sales volumes and lower building material costs. The group’s also planning to return £1bn to shareholders over the next three years through a combination of dividends and share buybacks. But last investors heard, the group was sporting a net debt position, so markets are keen to hear more on its plans to boost balance sheet health.”

• Is Vistry’s share price rally justified?

Berkeley Group, Trading Statement, Friday 6 September

Aarin Chiekrie, equity analyst, Hargreaves Lansdown “Berkeley’s LON:BKG last set of results was slightly better than markets were expecting. Back in June, Berkeley reported that full-year revenue fell 3.4% to £2.5bn as the group sold 13% fewer homes than in the prior year. This lower revenue saw pre-tax profits fall 7.7% to £557mn, despite broadly flat operating costs.

In next week’s trading update, investors are hoping to hear if the recent change of government and interest rate cut have had much of an impact on sales. And, after the first four months of its financial year, Berkeley will likely update on whether the £525mn pre-tax profit guidance is still on track.”

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