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No tears expected from Boohoo on results day

The coming week will also see results and updates from AG Barr, Card Factory, Hotel Chocolat, Mitchells & Butlers and United Utilities

Card Factory -

Now the largest company on AIM, Boohoo's half-year results are going to be more closely followed than ever and it seems unlikely that the online clothing giant is going to make investors cry on Wednesday.

A bullish trading update in September saw the share price shoot to an all-time high of 283p, and while the stock has pulled back slightly it is still well-above its pre-update levels.

With sales in the full year expected to grow by 33-38%, compared to previous forecasts of 25-30%, investors will be looking to the interims for how the growth breaks down among the firm’s three main brands, boohoo, PrettyLittleThing and Nasty Gal.

Nasty Gal, the smallest sibling, has been the biggest grower so far with revenues up 157% in the first quarter, however, the focus will likely be on boohoo and PrettyLittleThing as they account for 93% of total sales.

Card message

Investors will be interested to see what messages are inside the Card Factory PLC (LON:CARD) statement alongside its half-year results, which are out on Tuesday.

The second quarter saw slower progress amid tough comparatives for the greeting card retailer and lower sales at its personalised gifts operation.

It said last month that first-half revenues were up 5.5%, with sales rising by 1.5% on a like-for-like basis, but that reflected a strong first quarter containing Valentine’s and Mother’s Day.

Broker Peel Hunt did not expect current trading to be especially exciting either, with cost pressures, which will pass in due course but likely to ensure that this is a lacklustre showing, with EBITDA slightly below last year's £30mln.

“We will be very interested to hear management's thoughts on returning to growth and the trials with the likes of Aldi and Matalan,” analysts said.

Checking in with Hotel Chocolat

Alongside a card there is often a box of chocolates as it will be on Tuesday, though there will be an obvious contrast as Hotel Chocolat PLC (LON:HOTC) is likely to report on what has most likely been another year of strong sales growth.

The chocolate maker, which owns its own retail outlets and a 140-acre cocoa plantation in Saint Lucia, has already revealed that revenue for the year to the end of June was up 14% to £132mln.

Profit before tax, according to the company, should be in line with expectations, which suggests a figure of £13.9mln.

Trading since the end of the fiscal year has been in line with management’s expectations.

“Online sales have improved but there is further to go in terms of the potency of the offer,” suggested Peel Hunt.

“Any word on current trading will, of course, be well scrutinised but a major shift in trading form is unlikely,” the broker added.

Shares in Hotel Choc are up 40% so far this year, but are still down from their peak in summer last year.

New products eyed as AG Barr looks to regain fizz

Over at Irn Bru maker AG Barr PLC (LON:BAG), shares have lost a fair amount of fizz since a profit warning in July, with the shares currently down 40% from an all-time high of 975p in June.

The group is estimating that revenues for its first half will be around 10% lower when it reports its results for the period on Tuesday, while full-year profits are expected to fall by around a fifth.

With the numbers already predicted to be gloomy, investors will be looking for what the new challenges mean for the company’s margins and volumes, as well as what management plans to do about them.

There may also be some more detail on upcoming launches of new products, with three new Rockstar energy drink products and a revamped recipe for Rubicon juice drinks currently in the pipeline for next year.

…from fizzy pop to stronger stuff?

Last time we heard from All Bar One and Harvester pubs and restaurants owner Mitchells & Butlers PLC (LON:MAB), it was bragging about outperforming the market.

Well, it makes a change from trying to mollify analysts worried about its debt mountain which, like most mountains, seems to have been around forever.

The debt position is still a concern, for sure, but is heading in the right direction; at the end of April net debt had been whittled to a still eye-watering £1.63bn from £1.72bn a year earlier.

In Thursday’s trading update, however, analysts might be more interested in like-for-like sales growth rather than debt reduction, as this was picking up pace when the company issued a third-quarter trading update at the end of July.

Like-for-like (LFL) sales in the 10 weeks to 27 July were up 2.8% year-on-year, despite drink sales being 0.3% lower on a year earlier, which was probably a reflection on the 2018 period including the World Cup and a glorious summer.

Year-to-date, LFL sales were up 3.6%, with drink sales up 3.1% and food sales up 3.9%. Analysts think growth for the full-year could fall somewhere between 3.0% and 3.5%.

Water palaver for UU?

In the past week, United Utilities Group PLC (LON:UU.) and its fellow listed water companies saw their shares dip on Ofwat unveiled plans for stricter financing requirements.

This comes on top of political worries, and in particular the threat of renationalisation under a Labour government, that have pressured the wider utility sector’s shares for a couple of years.

In the coming Thursday, UU will announce first-half results on Thursday that show why water company shares have been among the better of the utility sector.

The regulatory cycle for the water industry may be one reason why UU shares have actually fared relatively well, says Russ Mould, investment director at AJ Bell.

Back in January the industry regulator Ofwat fast-tracked all three listed water company’s business plans for the next regulatory cycle.

“When it comes to this trading update, analysts will look for any further comment on AMP7 and United’s plans for AMP7, which the firm has quantified as offering its customers in the North West of England a 10.5% real-terms (post inflation) price cut over the cycle,” Mould said.

“After that, attention will turn to any comments on the financials from chief executive Steve Mogford.”

The market is expected revenues to be up around 2.8% for the full year, with first-half sales coming in at £916mln a year ago, when underlying first-half operating profit was £368mln, stripping out £25mln costs associated with the hot, hot summer and some restructuring.

Macro news

It will be a lighter week in terms of macroeconomic news following the central bank week, though the UK Supreme Court decision on Boris Johnson's prorogation of Parliament is due.

Highlights for data munchers will include the 'flash' preliminary PMI reports for the US and EU, the European Commission’s monthly confidence indicators and the US Conference Board’s consumer confidence reading.

On the September's PMI surveys will come after August numbers showed a small improvement in both the services and manufacturing sectors but did little to change the slowdown narrative for the euro area.

"The manufacturing sector, particularly in Germany, has been in a recession for the past year and the PMIs have shown no signs of a recovery in the sector anytime soon," said economists at RBC Capital Markets. 

"Yet, the more domestically focused and larger services sector has remained somewhat immune to this slowdown thus far. With the ECB in data dependency mode, they will be watching this survey closely for signs of further weakening in the economy."

For fans of ECB President Draghi, it will be his final 'monetary dialogue' for the European parliament’s Economic and Monetary Affairs Committee, while there may also be some headlines squeezed out of world leaders gathering at the UN General Assembly.

Significant announcements expected for week ending September 27:

Monday September 23:
Finals: PureCircle Ltd (LON:PURE), Seeing Machines Ltd (LON:SEE)

Interims: ASA International Group PLC (LON:ASAI), Brady PLC (LON:BRY),  Deltex Medical PLC (LON:DEMG, Destiny Pharma plc (LON:DEST), Faron Pharmaceuticals Oy PLC (LON:FARN), Gama Aviation PLC (LON:GMAA), Independent Oil & Gas PLC (LON:IOG), Instem PLC (LON:INS), Keystone Law Group PLC (LON:KEYS), Microsaic PLC (LON:MSYS)

Trading statement: Northgate PLC (LON:NTG)

Economic data: European and US PMI surveys

Tuesday September 24:

Finals: AA PLC (LON:AA.), 1pm PLC (LON:OPM), Blancco Technology Group PLC (LON:BLTG), Close Brothers Group PLC (LON:CBG), DX Group PLC (LON:DX), Hotel Chocolat Group PLC (LON:HOTC), Innovaderma PLC, (LON:IDP), Town Centre Securities PLC (LON:TOWN)

Interims: Alliance Pharma PLC (LON:APH), Animalcare Group PLC (LON:ANCR), Card Factory PLC (LON:CARD), Digitalbox PLC (LON:DBOX), DP Poland PLC (LON:DPP), Everyman Media PLC (LON:EMAN), Flowertech Fluidpower PLC (LON:FLO), Minds and Machines Group Ltd (LON:MMX), Moss Bros Group (LON:MOSB), Pennant International PLC (LON:PEN), Quixant PLC (LON:QXT), S&U PLC (LON:SUS), Ten Entertainment Group PLC (LON:TEG), Tremor International Ltd (LON:TRMR)

AGMs: Kibo Energy PLC (LON:KIBO)

Economic data: UK public sector borrowing, CBI industrial trends, US consumer confidence

Wednesday September 25:

Finals: Allergy Therapeutics PLC (LON:AGY), Netcall PLC (LON:NET), PRS Reit PLC (LON:PRSR)

Interims: Boohoo PLC (LON:BOO), Ergomed PLC (LON:ERGO), Mi-Pay Group PLC (LON:MPAY), Mission Marketing PLC (LON:TMMG), Wandisco PPLC (LON:WAND), Xlmedia PLC (LON:XLM)

Trading statement: Babcock International PLC (LON:BAB)

AGMs: Tavistock Investments PLC (LON:TAVI), Adept Technology Group PLC (LON:ADT)

Economic data: BoJ policy decision, NZ policy decision, CBI distributive trends, US new home sales

Thursday September 26:

Finals: Grit Real Estate Income Group Ltd (LON:GR1T), Orient Telecoms PLC (LON:ORNT)

Interims: Alfa Financial Software Holdings PLC (LON:ALFA), Circassia Pharmaceuticals PLC (LON:CIR), Ebiquity PLC (LON:EBQ), Northbridge Industrial Services Plc (LON:NBI), Pelatro PLC (LON:PTRO)

Trading statements: Mitchells & Butlers PLC (LON:MAB)

AGMs: Kromek Group PLC (LON:KMK), Sure Ventures PLC (LON:SURE)

FTSE 100 ex-dividends: Hargreaves Lansdown Plc (LON:HL), WM Morrison Supermarkets PLC (LON:MRW), Smurfit Kappa Group plc (LON:SKG), Prudential PLC (LON:PRU), Reckitt Benckiser Group PLC (LON:RB), Schroders PLC (LON:SDR)

Economic data: US weekly jobless, US GDP, US inflation

Friday September 27:

Finals: Byotrol PLC (LON:BYOT), CVS Group PLC (LON:CVSG)

Interims: Ades International Holdings PLC (LON:ADES), Gan PLC (LON:GAN)

Economic data: Nationwide house prices, speech from BoE’s Michael Saunders

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