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Companies Reporting: Imperial Brands, Vodafone, Royal Mail


Here’s our regular look at the FTSE 350 and a selection of other companies reporting from 15 to 19 November

  • Imperial Brands will hope price increases can offset expected volume declines
  • Vodafone’s roaming revenue will be under the spotlight
  • Nvidia looks to deliver on sky high expectations
  • Investors will be looking for credit quality at Close Brothers
  • Royal Mail’s star pandemic performance wanes as parcel volumes slow
  • British Land investors will be watching for signs that rent collections continue to accelerate

Imperial Brands, Full Year Results, Tuesday 16 November

Matt Britzman, Equity Analyst

Imperial Brands LON:IMB expects to post operating profit growth in the low to mid-single figures next week, with market analysts hoping for a little higher. Imperial will be looking for price increases to offset the expected decline in cigarette volumes. The group’s Next Generation Products line-up is yet to turn a profit, and the groups been trialling new markets and strategies – we’ll be looking out for updates in this space. Imperial’s debt position will be watched closely. Last we heard, net debt to underlying cash profits stood around 2.6 times. With the group targeting 2-2.5 times by the end of 2022.”

Vodafone, Half Year Results, Tuesday 16 November

Sophie Lund-Yates , Equity Analyst 

“Three months ago Vodafone LON:VOD confirmed it was on track to meet full year guidance of underlying cash profits after leases (EBITDAaL) of between €15.0bn and €15.4bn, and adjusted free cash flow of “at least” €5.2bn. So, the first port of call next week will be to check these targets are intact. We’d also like to see how roaming revenue’s doing. Unsurprisingly, this has taken a beating as travel collapsed during the pandemic. While there have been signs of improvement, things are some way off pre-pandemic levels. The final check will be how the cost saving efforts from the Liberty Global acquisition are getting on. Vodafone expects €535m a year in operating and capital expenditure savings within 5 years of completion, and managed €500m in savings last year.”

Nvidia, Third Quarter Results, Wednesday 17 November

Nicholas Hyett, Equity Analyst

“The main challenge Nvidia NASDAQ:NVDA will face this quarter is maintaining its recent string of stellar results. Last quarter the group reported a 68.3% increase in revenues, while operating profits more than doubled. With automotive now back in growth following disruption among manufacturers during the peak of the pandemic, every single one of the groups key markets reported growth of 35% or more. Analysts expect growth to slow to “just” 44.2% year-on-year in Q3, but that’s still an impressive number in the face of rising supply chain disruption. Those sorts of high expectations are reflected in a PE ratio of 67.9, nearly two and a half times the 10-year average. Should the company disappoint the fallout could be dramatic.”

British Land Company, Half Year Results, Wednesday 17 November

Susannah Streeter, Senior Investment and Markets Analyst

“There is no mistaking the challenge British Land Company LON:BLND has been facing. It’s not only been threatened by the rising tide of homeworking, but it has faced significant erosion from e-commerce, a trend accelerated by the pandemic. But conditions have improved, particularly for retail parks where footfall has bounced back well, and that will be a key measure to watch in these numbers. To cope with the shifting sands of the way we will work post pandemic, it’s gone upmarket in terms of office space by focusing its efforts on providing high-end campus style developments. By providing a high-end mix of retail, office, meeting and housing space, it aims to give firms the flexibility they need.  This should mean its flagship assets will be more resilient, however lower demand overall is still likely to hit rental rates and property values more broadly. The group is also increasing its exposure to warehouses to service increase demand for e-commerce. Rent collection rates have been accelerating and investors will be watching for signs that trend is continuing.”

Royal Mail, Half Year Results, Thursday 18 November

Susannah Streeter, Senior Investment and Markets Analyst

Royal Mail LON:RMG had been one of the big winners of the pandemic induced e-commerce boom, but parcel deliveries have slowed, and that trend is expected to have continued in the second quarter.  Although rising covid cases may have kept e-commerce sales brisk, with some shoppers still reticent about needless trips to the busy stores, volumes are still expected to come in lower. The other key issue facing Royal Mail is rising operational costs. Capital expenditure is expected to be well over £400 million in the UK alone next year, as the company tries to right its rocky history of chronic under investment. Although an agreement with unions was reached over pay and conditions, that is due to expire in the spring, which could see further wage pressures on the business.The iconic red post box is also looking lonely, frequented far less often as social media competition attracts correspondence instead. When WhatsApp, Instagram and Facebook are outpacing even emails as a way to keep in touch, stopping the receding tide of traditional letter writing will be an impossible task.’’

Close Brothers Group, Q1 Trading update, Thursday 18 November

Steve Clayton, Manager of the HL Select Funds

“Investors will be looking “closely” at the Q1 trading update from Close Brothers Group LON:CBG, the specialist banking and financial services group, for signs of any impact to credit quality due to the ending of furlough schemes. So far, UK banks have been releasing reserves this year, because bad debts feared during the depths of the pandemic never materialised. Will the message from Close Brothers remain the same, cautiously optimistic tone that they have been voicing so far this year?”

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

Kainos Half Year Results
Homeserve Half Year Results
Imperial Brands* Full year results
Intermediate Capital Group Half Year Results
Premier Foods Half Year Results
Vodafone* Half Year Results
Ninety One Half Year Results
British Land* Half Year Results
CMC Markets Half Year Results
Experian* Half Year Results
Nvidia* Third Quarter Results
Safestore Holdings Full Year Results
Sage Group Full Year Results
Spirax Sarco Trading Update
SSE* Half Year Results
Workspace Half Year Results
Aristocrat Leisure Full Year Results
Biffa Half Year Results
Euromoney Full Year Results
Grainger Full Year Results
Halma Half Year Results
Investec Half Year Results
LondonMetric Half Year Results
Micro Focus Trading Update
National Grid* Half Year Results
Royal Mail* Half Year Results
Close Brothers Q1 Trading Update
Great Portland Estates Half Year Results
Kingfisher Third Quarter Trading Update
Mitie Half Year Results

This article is 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.

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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