Companies Reporting: Entain, Barratt Developments, ASOS, LVMH

Here’s our regular look at the FTSE 100 and FTSE 250 companies reporting from 11 to 15 October

• Entain investors remain in limbo as management mull over the most recent offer to buy the company
• LVMH has fared well due to its luxury cachet and easing of travel restrictions should help sales
• We’d like to know if inflation will affect the full year picture at Barratt Developments 
• ASOS will shed some light on what supply chain disruption means for sales and margins

Entain, Q3 Trading Update, Tuesday 12 October

Nicholas Hyett, Equity Analyst

“The Entain LON:ENT third quarter trading update could prove a bit of a non-event – given the board are currently considering a £28.00 per share offer for the group from DraftKings. Still, the group has ambitious growth targets, both in established markets and in economies and business areas in which it doesn’t yet operate. Signs of strong progress will be very welcome and might convince management to turn down the offer on the grounds that it undervalues the business. The US joint venture with MGM in particular will be in the spotlight, since it’s probably the gem that initially interested DraftKings in the business. The division reported net gaming revenues of $357m in the first six months of the year and all being well should do even better in the second half.”

Barratt Developments, Trading Statement, Wednesday 13 October

“Barratt Developments LON:BDEV revenue was slightly above pre-pandemic levels at the full year, thanks to a higher number of completions and rising property prices. Despite this, operating profits were still 10% lower than before the crisis, reflecting legacy property costs and coronavirus loan repayments. These problems should be temporary though, and we could find out if these unhelpful trends have started to unwind in next week’s trading statement. We’ll be looking for comment on inflation as well—management has previously called it out as a headwind , but it was more than offset by the rising house prices. Now that the post-pandemic rush has started to subside, house prices could start to plateau. We’d like management’s take on whether inflation is expected to affect this year’s results. The other figure to keep an eye on is forward sales. Comparisons are getting more difficult as demand over the past year has been unprecedented. With that in mind, even a slim margin of growth would be impressive.”

LVMH, Q3 Trading Statement, Wednesday 13 October

Susannah Streeter, Senior Investment and Markets Analyst

‘’Customers’ release from confinement helped unleash a wave of celebratory spending power boosting sales at LVMH [EPA:MC] in the second half. This upswing is both due to the group’s online strength and the draw its historic brands hold over well-heeled shoppers. LVMH also has had the financial fire power to sign up the influencers to catch the mood of their young and growing fan bases. Louis Vuitton also signed the mega South Korean group BTS, and we should get an indication as to what extent they have helped drive social media engagement in the third quarter. Although the easing of international travel restrictions has been slow, we should expect some forward guidance regarding an expected pick up in the capital city boutiques and airport shopping malls towards the end of the year. Tiffany’s was a rather large jewel to pocket for the group, given it came with an eye watering price tag, so any update on expected profits in jewellery and watches will be worth keeping an eye on.’’

ASOS, Full Year Results, Thursday 14 October

“The market wasn’t impressed by ASOS’ LON:ASC  third quarter results. Ongoing uncertainty and bad weather meant trading weakened in the final weeks of the period. We suspect, but can’t be certain, that things will have picked up in some key markets. More social events on calendars means more outfits to be bought. Things are unlikely to be back to normal though. ASOS previously said it expects “a measure of volatility” to have continued – the extent of which we’ll find out next week. The big question will be to what extent supply chain issues, including freight capacity problems, have hampered ASOS’ ability to meet recovering demand. Along that same vein, we’ll be looking at margins. Profitability’s been held back by a higher proportion of less lucrative “lockdown” items, coupled with higher distribution costs, and rising return rates, could mean operating margins are heading in the wrong direction. The addition of names like Topshop have the potential to really help propel growth and we’d like to see strong customer numbers. With over £90m of net cash at the last count we also can’t rule out the announcement of further acquisitions.”

FTSE 100, FTSE 250 and selected other companies scheduled to report

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