Investors would be glad of some good news and positivity from GlaxoSmithKline PLC (LSE:GSK) in Wednesday’s financial results – so would chief executive Emma Walmsley for that matter.
GSK and its larger rival AstraZeneca may still be described as sector peers but can no longer be spoken of as equals on valuation terms, with the former’s £82bn eclipsed by the latter’s £130bn.
GSK’s underperformance has put pressure on Walmsley. Albeit the market seemed to like that Glaxo stuck to its guns in rejecting the approach from Unilever, which moved for the drug-maker’s consumer healthcare business. It also recently saw a boost in the form of a US$1.25bn payment from competitor Gilead Sciences after a settlement over GSK’s HIV drug patents.
Looking to the financials, the market has pencilled in £33.99bn for revenue, little changed from the year before, and profit before tax of £7.97bn, up 47.4%.
Is Barratt reverting to the old normal?
Barratt Developments PLC (LSE:BDEV) is scheduled to publish half-year results on Wednesday with analysts expecting weaker revenues this year, with sales expected to cool off further in coming months.
We last heard from the FTSE 100-listed housebuilder in October, when it reported a slowing of net reservations since the start of July, with average selling prices (ASP) up but completions down amid building material supply challenges.
UBS expects a “downward normalisation” in volumes given the elevated levels in the mini-boom a year earlier as part of the post lockdown catch-up, with volumes expected to drop 14% and ASP to rise 6%, resulting in revenues being down 10% on the year before.
‘’House builders are vulnerable to rising interest rates and that nervousness has been seeping through the sector, and Barratt Developments has been far from immune,” said Susannah Streeter, analyst at Hargreaves Lansdown.
Not Dun sellin’
Dunelm Group PLC (LSE:DNLM) is set report is half year results on Wednesday, with the home furnishings retailer raising its full year guidance for profit before tax back in September and reiterating its in October despite supply chain disruptions.
As ever, the interims are a good chance for investors to see if the company is on track to achieve its targets, with .£140mln the guided half-year PBT mark
The home improvement and homeware markets were among the handful of areas that benefitted from lockdowns, with consumers eager to revamp their homes.
However, recently announced government interest and national insurance rates, alongside soaring energy bills, although not relevant to the half year results, may impact guidance as cash strapped homeowners may begin to prioritising spending.
Broker Peel Hunt said it is not expecting an update on current trading but rather for management to set out “greater levels of customer insights in terms of active customer growth and share of wallet”, with perhaps confirmation of the “raft” of planned enhancements coming for the business in 2022.
Wednesday
Trading announcements: discoverIE Group PLC (LSE:DSCV), Grainger Plc (LSE:GRI), GlaxoSmithKline PLC (LSE:GSK), Lancashire Holdings Ltd (AIM:LRE, OTC:LCSHF)
Interims: Barratt Developments PLC (LSE:BDEV), Dunelm Group PLC (LSE:DNLM), PZ Cussons (LSE:PZC)
Finals: Smurfit Kappa Group plc (LSE:SKG)
AGMs: Contango Holdings, Euromoney Institutional Investors PLC, Finsbury Growth Income Trust PLC, Grainger Plc, Inspirit Energy Holdings, JPMorgan Asia Growth and Income PLC, Oxford Metrics, Schroder UK Mid Cap Fund PLC
Economic data: Retail Sales (UK), MBA Mortgage Applications (US), Wholesale Inventories (US), Crude Oil Inventories (US)