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Hargreaves Lansdown and Dunelm spark autumn earnings season

Numbers are also due from clothes retailer N Brown, online home selling portal OnTheMarket and paper maker Mondi

Dunelm onesies
Dunelm also sells onesies, apparently

Thursday will see first-quarter updates from FTSE 100 investment supermarket Hargreaves Lansdown PLC (LON:HL.) and homewares retailer Dunelm Group plc (LON:DNLM) plus half-year results from clothes seller N Brown PLC (LON:BWNG).

There's also some key UK macro data, including GDP figures for August that are likely to show growth remain low, but perhaps up slightly from the 0% in July.

“Do not mistake that for some measure of the underlying health of the UK economy. Brexit distortions are the main reason we expect growth to pick-up,” said economists at RBC Capital Markets.

Something in the Woodford for HL?

Hargreaves shares hit an all-time high above £24 in May this year, having soared from around £2 a decade ago but have since fallen by a quarter.

Weighing on the stock has been the extra scrutiny of the company's close relationship and continued backing of fund manager Neil Woodford and his open-ended fund even after it was gated in June following a long period of weak performance and an ensuing surge in redemptions.

Alongside August’s final results HL boss Chris Hill said the groups own business flows and service levels “held up well”, but analysts said potential disruption from Woodford would have happened too late in the year to have any material impact on those results.

A first-quarter update on Thursday comes against a relatively subdued market backdrop and perhaps some of that Woodford effect.

HL fell short of its performance targets for fund flows, new clients and profit before tax in its 2019 financial year, analysts at Credit Suisse noted recently, estimating that underlying net fund flows have slowed from £6.9bn in 2017 to £6.1bn in the two years since and that “momentum is starting to look challenging”.

Although HL investors, many of whom are likely to have pensions or ISA on the FTSE 100 company’s platform, still admire its strong margins and ability to keep grabbing more market share, helped by its new Active Savings offer, a valuation of around 35 times full year earnings looks a bit too pricey for the Swiss bank.

Further momentum eyed from Dunelm

Homewares retailer Dunelm Group plc (LON:DNLM) has so far managed to avoid most of the gloom affecting Britain’s retail sector, unveiling a plump special dividend of 32p in its final results in September as profits jumped 35%.

Earlier this year Dunelm’s shares emerged from two years in the darkness but have been flat the past six months and investors will be thinking where next.

A first-quarter trading update for its current year on Thursday will show whether momentum has been maintained, with its online and furniture segments spied as key growth areas.

UBS is expecting the company to deliver an 11% increase in like-for-like sales in the quarter, although cautioned that the warm start to September may have dented trading slightly.

Brown pants?

When fashion retailer N Brown PLC’s (LON:BWNG) releases its half-year results on Thursday, investors will also be looking to see whether it can revive sales which dropped 3.8% in the first quarter.

The group, whose brands include JD Williams, Simply Be, Ambrose Wilson and Jacamo, has recently taken itself online-only, closing all 20 of its stores.

This move comes after the group’s shares have lost two thirds of their value in the past couple of years while some other digital fashion houses are trending with shoppers and investors.

After swinging to a loss in the last year but providing a more optimistic outlook early in the summer, N Brown’s shareholders were then spooked last month by the announcement it was setting aside an extra £20mln-£30mln to pay off mis-sold payment protection insurance (PPI) claims.

The clothing group also upped its full-year net debt guidance by £20mln-30mln to £460mln-£490mln.

Thursday 10 October:

InterimsN Brown Group plc (LON:BWNG), Morses Club PLC (LON:MCL), OnTheMarket PLC (LON:OTMP)

Trading statement: Dunelm Group plc (LON:DNLM), Hargreaves Lansdown Plc (LON:HL.), Mondi PLC (LON:MNDI)

FTSE 100 ex-dividendsBarratt Developments PLC (LON:BDEV), Centrica PLC (LON:CAN), HSBC Holdings PLC (LON:PLC), Tesco PLC (LON:TSCO)

Economic data: RICS housing market survey, UK GDP, UK index of services, ECB policy minutes, US initial jobless claims, US consumer price inflation

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