Here’s our regular look at the FTSE 350 and a selection of other companies reporting from 6 to 10 June.
- We’ll see whether Zara shoppers are cutting back amid inflation when Inditex reports
- British American Tobacco will reveal whether it’s been able to shrug off rising input costs
- Hopes are high as Tate & Lyle unveil their new structure
Inditex, Q1 Results, Wednesday 8 June
Laura Hoy, Equity Analyst “Inditex is in a tricky position as the cost of living squeeze makes for pickier consumers. The group managed to improve revenue by 3% compared to pre-covid last year, so the question will be if that momentum could continue. Inditex’s pricing puts it on the higher-end of mid-range, so price increases may not be well received. The group said it’s going to pass rising costs on to customers and that shouldn’t impact volumes. However, with energy and food costs soaring, this may have been a bit optimistic.
The work the group’s done to create more efficient stores will help with this somewhat, but ultimately profits could suffer if the group’s unable to continue ratcheting the cost of its clothes up. Management will likely offer some guidance on this front to give investors a better idea of what to expect for the remainder of the year.”
British American Tobacco, Q1 Trading Statement, Thursday 9 June
Laura Hoy, Equity Analyst “Tobacco is a shrinking industry so the most important thing for British American Tobacco is that the group’s squeezing every last pound out of its dwindling customer base. This is nothing new for BAT’s investors, though inflation could exacerbate this. To that end margins will be the figure to watch as investors look for evidence of whether rising commodity costs are starting to eat into profits. Cigarettes prices are mostly made up of taxes, though, so rising input costs may not make them all that more expensive for consumers.
In any case, some colour is expected from management on how the rest of the year is expected to shake out given the mounting cost of living squeeze. New Categories, which offers smokeless options, is the future so it’ll be worth watching as well. The division’s seen delivering £5bn in revenue by 2025 so we’d like to see that it’s on track to achieving that goal. This part of the business is still just a small part of the whole, and with people growing more health-conscious it’s important the group cement its place in the market for alternative tobacco products.”
Tate & Lyle, Full Year Results, Thursday 9 June
Sophie Lund-Yates, Equity Analyst “It’s an exciting time for Tate & Lyle next week. It’s the first set of full year results with the new company structure in place. This involves focussing on food and beverage solutions (FBS) – with an emphasis on things like sugar replacements and the clever ingredients that help low-fat options taste good.
We’re supportive of the strategy shift, largely because this area of the business is higher margin. It also has impressive growth prospects, as the world becomes more health focussed, working to take sugar and fat out of food is a good position to be in.
All-in-all some positive momentum in FBS next week. However, we have a lingering concern in the form of inflation. Tate & Lyle relies is expected in a number of raw materials, including corn, and the Ukraine crisis has caused a lot of volatility in commodity prices. There isn’t expected to be a crisis moment for Tate & Lyle next week, but it will be interesting to hear how successfully it’s managed to hedge its exposure to the volatile price environment.”
FTSE 100, FTSE 250 and selected other companies scheduled to report
|No FTSE 350 Reporters|
|LXi REIT||Full Year Results|
|AVEVA||Full Year Results|
|Inditex||First Quarter Results|
|Workspace Group||Full Year Results|
|Assura||Full Year Results|
|British American Tobacco||First Quarter Trading Statement|
|CMC Markets||Full Year Results|
|Mite Group||Full Year Results|
|Tate & Lyle||Full Year Results|
|No FTSE 350 Reporters|
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.