logo-loader

Asos full-year figures not expected to be pretty

There are also numbers due from Barratt Developments, Rio Tinto and Mediclinic International

ASOS PLC -

Investors in ASOS PLC (LON:ASC) would probably rather be in someone else’s shoes as the results for what could be the online retailer’s annus horribilis are out on Wednesday.

The shares have halved over the past 12 months following two profit warnings, issued in December and July, as a result of substantial investments in IT and logistics, operational issues at warehouses and unfavourable market conditions.

It's may not necessarily be a saving grace for Asos, which has already reported on trading for the 10 months up to 30 June, but it's August year end means these numbers avoid the warm weather in September, which was the worst month on record according to the British Retail Consortium. 

Analysts at UBS forecast underlying profits at £53.7mln, against Reuters’ consensus of £62mln on revenues up 12% to £2.7bn. 

Statutory pre-tax profit of around £35mln, the Bloomberg consensus, would be a less than half last year’s figure, reflecting restructuring and the so-called transition costs.

Investors will also be looking for free cash flow guidance, as the company seemed to drop its commitment to being free cash flow positive in the new financial year in its July update.

Modest improvement expected for Barratt 

Housebuilder Barratt Developments PLC (LON:BDEV) arrives with a quarterly statement a day after smaller sector peer Bellway reported continued pressure from costs.

It may be interesting to see how Barratt acknowledges the impact the recent political uncertainty has caused for the sector.

Analysts at Peel Hunt are expecting modest volume growth from the firm in the first 15 weeks of its current year, while housing shortages and government support through the Help-to-Buy scheme continue to serve as longer-term positives.

Cost inflation is also expected to hold between 2-3%, although Peel Hunt noted comments that suggested this could “soften” as labour moved towards residential construction away from the lagging commercial sector, which could reduce pressure to up wages and attract builders.

All about iron ore for Rio 

Rio Tinto plc (LON:RIO) investors will hope the mining major can buck the recent downward share price trend due to a bearish iron ore market and weakening Chinese demand.

Wednesday’s operations review will focus on iron ore shipments and production from Pilbara in Australia, plus production of other metals, including copper. 

In the first half of the year Rio saw an 8% decline in iron ore shipments from Pilbara due to weather disruptions and mine operational challenges, though the company also rolled out the “world’s largest robot” - its automated train system.

This will arguably fade in importance in comparison with a strategy day due on the last day of the month. 

Analysts at Credit Suisse, who downgraded Rio to ‘underperform’ in July, said they continue to focus on increasing iron ore supply out of both Brazil and Australia and potential for demand moderation in China as the key drivers of their negative stance on a 12-month view. 

With the implied iron ore price sitting at around US$80-85 per tonne in both 2020 and 2021, CS also flagged the risk of downgrades to consensus earnings estimates “as the softness in iron ore markets becomes increasingly apparent, particularly for 2021”.

Significant events on Wednesday 16 October:

Finals: Applied Graphene Materials PLC (LON:AGM), ASOS PLC (LON:ASC)

Trading statement: Barratt Developments PLC (LON:BDEV), Mediclinic International Plc (LON:MDC), Rio Tinto plc (LON:RIO), Segro PLC (LON:SGRO)

AGMs: Duke Royalty Ltd (LON:DUKE), Loungers PLC (LON:LGRS)

Economic announcements: UK inflation, EU inflation, US MBA mortgages, US retails sales, US Beige Book

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

FOR OUR FULL DISCLAIMER CLICK HERE

Watch

Investor Update: CentralNic Group looks to acquire website provider Team...

Headlines from the Proactive UK newsroom. CentralNic Group (LON:CNIC) has confirmed advanced discussions are underway to acquire website provider Team Internet. The AIM-listed domain name specialist said further announcements will be made in due course. Life sciences group Instem (LON:INS)...

58 minutes ago

RNS

Director/PDMR Shareholding

1 week, 4 days ago

Total Voting Rights

2 weeks ago

Additional Listing

2 weeks, 3 days ago

Final Results

on 16/10/19

Directorate Change

on 2/10/19

Total Voting Rights

on 1/10/19

4 min read