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Companies Reporting: United Utilities, Moonpig, Next, Boohoo, SSP


Here’s our regular look at the FTSE 100 and FTSE 250 companies reporting from 27 September to 1 October. We’ve picked out a few highlights below – and you’ll find the full list of reporters further down the page.

  • United Utilities should offer some guidance on how regulatory changes could impact revenue forecasts
  • Moonpig is investing heavily in marketing to keep its new customers
  • SSP has caught a lift upwards as travel restrictions are eased after a wah out summer
  • We’ll find out how Next’s sales held up as warm weather eased
  • boohoo’s supply chain review will remain front and centre

United Utilities, Pre-Close Trading Update, Monday 27 September

Laura Hoy, Equity Analyst

“There’ll be one thing on investors’ minds when United Utilities [LON:UU] offers a trading update – the dividend. One of the reasons people hold utilities is because their more reliable revenue streams can translate into healthier dividends, and a prospective yield of 4.3%, is a big part of United’s investment case. But remember no dividend is guaranteed. This is especially true at the moment because United’s hit a few bumps recently. Regulatory changes resulted in lower chargeable price, which hit revenues last year, but Ofwat’s recent decision to allow utilities to up their prices could reverse some of that damage.

We’re expecting management to offer an update on how this change might impact the group’s forecast for this year. With infrastructure investments on the rise, better-than-expected revenue would be a welcome tailwind. Bolstering profits will be important if the group is to maintain its progressive dividend policy, which is linked to inflation. The rise in inflation means UU could be in for a larger than anticipated dividend hike this year – the latest August figures show a 3% annual increase. We wonder if management will stick to its promises, or shakeup the dividend policy to reflect the transient nature of the current price rises.”

Moonpig, Trading Update, Tuesday 28 September

Susannah Streeter, Senior Investment and Markets Analyst

“The pandemic sent Moonpig LSE:MOON flying in terms of sales, as shoppers, confined to home, had little choice but to switch to sending greetings online. In such a ripe environment it’s little surprise that Moonpig rooted out a surge in new customers, and its e-commerce platform was geared up to sell plenty more celebratory ranges alongside cards, a product mix which should help future growth. Hanging onto newly acquired customers though is likely to be a costly business and the company is budgeting for a big marketing drive. It has now acquired a huge data set on customer choices and preferences, which alongside its flexible delivery options, should help it stay ahead of the herd, but big chunks of future profits are likely to be dedicated to trying to gobble up an even bigger share of the card market in the UK and the Netherlands. With more shoppers confident to head out onto the high street now that social distancing restrictions have been relaxed, its bricks and mortar rivals are also now much tougher competition and that trend is likely to show up in this latest trading update.”

SSP, Trading Update, Wednesday 29 September

Susannah Streeter, Senior Investment and Markets Analyst

“The travel sector is flying into brighter skies with the re-opening of transatlantic travel and the share price of catering company SSP LON:SSPG has caught a lift upwards with airline stocks. But this burst of optimism isn’t likely to show up fully in this trading update as over the summer months the weather was still distinctly inclement for the FTSE 250 company. It runs concessions across 180 airports, relies on the travelling public to pick up snacks and treats on journeys, and the slow return of international tourism has hit hard. There may still be some bright spots, given that the easing of social distancing restrictions has led to a return of more workers to the office, and across the rail network, there may have been a surge of purchases from holidaymakers staying in the UK. However, a significant chunk of their outlets have remained closed because there simply hasn’t been the footfall to make them viable. We should get an insight into if that is changing, and how much of a boost the relaxation of international travel rules will be for the company.”

Next, Half Year Results, Wednesday 29 September

Sophie Lund-Yates, Equity Analyst

“In July Next LON:NXT said recent trading was “materially ahead” of expectations, and it upped full year profit guidance by £30m. So, we have reason enough to expect a relatively spritely set of half year results. We already know total full price sales rose 7.8% in the period – so what else is there to watch out for? The big one is momentum. Second quarter sales far outpaced the first, largely because of pent up demand and warm weather. What we’d like to know is at what pace this is slowing down. As the warm weather eased, so did sales, so exactly what this will translate to is yet to be seen. We’d like to know how things are looking in the store estate as well. Sales have been declining for a while, but we wonder how the autumn/winter collections are being received in-store. Next’s prevalence in out-of-town retail parks means it may have been able to perform better than peers as more of the UK gets back to the office and social events.”

Boohoo, Half Year Results, Thursday 30 September

Sophie Lund-Yates equity analyst

“Sentiment around boohoo LON:BOO is being overshadowed by concerns over its ongoing supply chain review. Poor working conditions and exploitation have led the group to overhaul its processes, and an update on how things are going will be top of most people’s lists. Away from the scandal though there’s something else to consider. The market expects a lot from boohoo – a 32% increase in first quarter revenue back in June left the market non-plussed. “Good” isn’t good enough for the clothing retailer. With that in-mind, there’s pressure for the group to remain on-track for its medium-term goal of 25% revenue growth. On a wider scale, we wonder if boohoo has any plans to strengthen its sustainability credentials. Fellow fast fashion names ASOS and Primark have recently committed to upping their use of sustainable materials. Any specific goals or comments around this, and what that means for margins, would be read with great interest.”

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

United Utilities Pre-Close Trading Update
Close Brothers Full Year Results
Ferguson Full Year Results
Moonpig Trading Update
Pennon Trading Update
Smiths Group Full Year Results
Next Half Year Results
SSP Trading Update
boohoo Half Year Results
Renishaw 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.

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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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