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Companies Reporting: Lloyds Banking Group, Sainsbury, Associated British Foods

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Our regular look at the FTSE 350 and a selection of other companies reporting from 22 – 26 April.

  • Associated British Foods is bucking the trends in retail
  • Margins and order intake in focus for Baker Hughes
  • Lloyds Banking Group will be looking for ongoing resilience from borrowers
  • Meta’s capex discipline remains front and centre
  • What progress has been made on Sainsbury’s three-year strategy?

Associated British Foods, Half Year Results, Tuesday 23 April

Susannah Streeter, head of money and markets, Hargreaves Lansdown “Primark, owned by Associated British Foods LON:ABF, is bucking the trends in retail, and opening vast new stores while other chains are retreating from the high street. Primark has a razor-sharp focus on delivering fashion fans the styles they crave, helped by its sophisticated social media channels which pull in customers.

This expansion is driving sales upwards, with the US considered to be a key market for future growth. Given its highly successful bricks and mortar strategy, Primark has been super-cautious about dipping its toe into e-commerce, but it’s now taken a deeper plunge by rolling out click-and-collect more widely. Investors will be keen to see just how successful this foray is, and whether the delivery infrastructure can cope with demand.’’

Baker Hughes, Q1 Results, Tuesday 23 April

Derren Nathan, head of equity research, Hargreaves Lansdown “Baker Hughes NASDAQ:BKR expects first quarter revenue to land between $6.1-$6.6bn. At the mid-point, that’s growth of 11% over the same period last year. Investors will be hoping for an uptick in order intake, which fell 14% in the fourth quarter of last year, to $6.9bn. But challenges remain in the onshore US market where drilling activity has been relatively weak. The number of active drilling rigs is holding up better in international markets, with all regions, bar the Middle East, reporting a month-on-month increase in March.  Investors will be looking for commentary on whether the company sees any impact from the recent escalation of tension in the region.

Management has delivered substantial margin improvement in recent years and that’s a continued area of focus. Analysts are expecting an underlying cash profit (EBITDA) margin of 14.5%, up from 13.7%. Baker Hughes plans to improve efficiency and increase higher margin services revenues from its growing base of installed technology. But it’s a fine balancing act as it looks to invest resource in beefing up its new energy solutions.”

Lloyds Banking Group, Q1 Results, Wednesday 24 April

Matt Britzman, equity analyst, Hargreaves Lansdown “Lloyds Banking Group {LON:LLOY] is the first of the major UK banks to report first quarter earnings next week. Markets expect weaker results than this time last year, with net interest margin expected to fall from 3.22% to 2.93%. While the drop is expected, and more a result of the particularly strong environment this time last year when rates were being hiked, anything lower than 2.90% would likely be punished.

There’s also the ongoing issue of an FCA investigation into motor financing to contend with. As one of the more exposed banks, Lloyds has already set aside £450mn in preparation for charges. It’ll be interesting to see whether management has any further commentary here, up to now details have been hard to come by.

Loan defaults are the other key thing to watch, with analysts pencilling in £280mn of impairments. There is scope for a better result here and investors expect to hear commentary that borrowers remain resilient. Performance clearly peaked last year, but several tailwinds yet to play out could give room for upside. Of course, there are no guarantees.”

Meta Platforms, Q1 Results, Wednesday 24 April

Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown “Facebook owner, Meta Platforms NASDAQ:META, set the bar high last quarter after beating expectations. Expectations are that first quarter revenue will be $34.5bn – $37.0bn, and any deviation from that will be sorely punished. The group’s benefiting from a resurgence in digital advertising, which came off the boil during the worst of the uncertainty in recent years.

A number that will be watched even more keenly than ad spending will be Meta’s expenses. The group has been forced to refocus on core activities and rein in its undefined and extravagant spending plans in recent memory, but it’s still looking to spend up to $99bn this year. There will be hope that some more detail on where this is being funnelled could be served up in next week’s results.”

Sainsbury, Full Year Results, Thursday 25 April

Susannah Streeter, head of money and markets, Hargreaves Lansdown ‘’Investors will be keen to see if there is more flesh on the bones on Sainsbury’s three-year strategy unveiled in February which is aimed at offering more food options and consistent value for shoppers. The plan was a little scant on detail, and while the direction of travel, with a doubling down on groceries, is the right way to go, a more in-depth road map would be welcomed to explain how it will be achieved.

Competition is super tough in the supermarket space, particularly for a mid-market name like Sainsbury’s with cost-of-living pressures meaning it needs to have an ever-sharper eye on offering value. Although it’s succeeded in seizing more market share, that’s put pressure on margins and investors will want to see how long this is likely to continue for. Retreating more from home wares and replacing shelf space with more grocery ranges is a big part of the plan, as the grocer takes advantage of customers who are willing to spend more on at home treats. The Taste the Difference range has seen encouraging increases in sales, and investors will want to see that momentum continuing.”

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

22-Apr
Verizon Communications Q1 Results
23-Apr
Anglo American Q1 Production Volume
Associated British Foods Half Year Results
Baker Hughes Q1 Results
Ferrexpo Q1 Production Volume
PepsiCo Q1 Results
Taylor Wimpey Trading Statement
Tesla Q1 Results
Visa Q2 Results
24-Apr
Abrdn Q1 Trading Statement
British American Tobacco* AGM
Bunzl Q1 Trading Statement
Fresnillo Q1 Production Report
Heineken Q1 Trading Statement
Lloyds Q1 Results
Meta Q1 Results
Quilter Q1 Trading Statement
Reckitt Benckiser Q1 Trading Statement
25-Apr
Alphabet Q1 Results
AstraZeneca Q1 Results
Barclays Q1 Results
Caterpillar Q1 Results
Drax Group Trading Statement
Hikma Pharmaceuticals Trading Statement
Inchcape Q1 Trading Statement
Indivior Q1 Results
London Stock Exchange Group Q1 Trading Statement
Microsoft Q3 Results
Nestle Q1 Trading Statement
Persimmon Trading Statement
PPHE Hotel Group Q1 Trading Statement
RELX Trading Statement
Sainsbury Full Year Results
Schroders Q1 Assets Under Management
Travis Perkins Q1 Trading Statement
Unilever Q1 Trading Statement
WAG Payment Solutions Q1 Trading Statement
Weir Group Q1 Results
WH Smith Half Year Results
WPP Q1 Trading Statement
26-Apr
Chevron Q1 Results
NatWest Q1 Results
Pearson Q1 Trading Statement
Smurfit Kappa Q1 Trading Statement

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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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