Here are three things you need to know in the financial markets this morning from investment writer, Tony Cross.
#1. Ocado expects strong revenue growth for the full year
Ocado [LON:OCDO] has published a Q3 trading update, covering the period to 29th August. This straddled a fire at one of the company’s fulfilment centres in mid-July, so it’s very much a game of two halves. Over the first 6 weeks, performance was in line with expectations, but the fire saw revenues drop almost 20% in the following 7 weeks, with 300,000 orders worth about £35m unable to be taken. That had a total impact on revenues of just over 10%. The company is countering this by expanding capacity at other centres and enabling expansion to continue in a post-lockdown environment. Strong revenue growth is still expected for the full year.
#2. Trainline returns to profitability
Trainline [LON:TRN] has published a trading statement covering the six months to 31st August. In Q2, group sales had recovered to 71% of pre-pandemic levels with UK sales hitting 95% of the level seen two years earlier. This has driven a return to profitability with EBITDA expected to fall in the £13-£15m range. There’s still uncertainty as to what happens next and whether there will be a return to lockdowns in the winter but assuming that doesn’t happen, full year ticket sales are forecast to be in the £2.4-£2.8 billion range, whilst EBITDA will be between £35 and £40m.
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#3. JD Sports Fashion expectations are for full year profits to be at least £750m
Numbers for the 26 weeks to 31st July are out from JD Sports Fashion [LON:JD] today. The popularity of Athleisure wear which surged during lockdown shows no sign of relenting, with the company noting revenues up by more than 50% despite footfall still remaining materially lower. Gross profit grew by 290 bps and expectations are for full year profits to be at least £750m. There’s no interim dividend being declared, but this could lead to a potentially larger payout for the full year, subject to any further trading restrictions.