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The FTSE 350 next week

7 February 2019

No news or research item is a personal recommendation to deal. All investments can fall as well as rise in value so you could get back less than you invest.

With Valentine’s Day just around the corner, you could be forgiven for dwelling on the impending breakup of the UK with the EU. But investors can enjoy some fizz, of the non-alcoholic kind, with results from one of the world’s favourite drink brands instead. For those more interested in retail therapy, we’re also expecting news from an online retail giant.

For those looking for a distraction;

  • ASOS needs to prove cost-saving plans are on track
  • Coca-Cola spills the beans on its Costa deal
  • RBS takes another step away from government ownership

FTSE 350 stocks reporting next week

11-Feb
Acacia Mining Full Year Results
12-Feb
TUIQ1 Trading Statement
AAPre-Close Trading Statement
Activision Blizzard Q4 Trading Statement
Plus500 Full Year Results
13-Feb
Dunelm Half Year Results
Galliford Try Half Year Results
Heineken Full Year Results
Smurfit Kappa Q4 Trading Statement
Tullow Oil* Full Year Results
14-Feb
Ashmore Half Year Results
AstraZeneca* Full Year Results
Coca Cola HBC Q4 Trading Statement
Coca-Cola Q4 Trading Statement
ConvaTec Full Year Results
Indivior Full Year Results
Lancashire Holdings Q4 Trading Statement
Micro Focus Full Year Results
Moneysupermarket.com Full Year Results
Nestle Full Year Results
Safestore Q1 Trading Statement  
15-Feb
ASOS Q1 Trading Statement
Pepsi Full Year Results
Royal Bank of Scotland* Full Year Results
Segro Full Year Results

*Companies on which we will be writing research

†Not a FTSE 350 stock but is covered by HL research

ASOS

The most recent data from the Office for National Statistics, shows online sales now account for 20% of all shopping in the UK. That should be good news for ASOS, but it didn’t stop the group issuing a profit warning in December.

The slowdown’s being driven by competition from cheaper rivals. Cutting prices to keep pace means ASOS’ operating margins are expected to half to around 2% this year, and revenue guidance has been slashed too.

With that in mind, investors should focus on ASOS’ efforts to boost profitability where it can. In particular, the group’s progress in cutting capital expenditure is worth paying attention to.

It’s also worth bearing in mind that the UK is only part of ASOS’ story. Potential on the continent and the US remains substantial.

ASOS factsheet, including share prices, charts & research

Register for updates on ASOS

Coca-Cola

It’s all-change at Coca-Cola. Current chairman, Muhtar Kent, is stepping down in April. CEO – James Quincey – will take the reins, and it’s not just a management shakeup on its way.

The £3.9bn purchase of Costa is set to complete in the first half of 2019, so won’t directly impact results for the current financial year. But the deal marks a major departure for Coca-Cola, which doesn’t currently have a bricks and mortar presence to speak of. Details on the future of its new retail venture deserve scrutiny.

We’d expect ‘ready-to-drink’ coffee to be on the menu as the group looks to widen its portfolio more generally. Coca-Cola’s seen sales of bottled water and low sugar alternatives surge, as demand for healthier products swells.

Added to that, operating margins have been growing lately following the disposal of bottling operations in North and South America. We’re looking forward to more evidence the leaner operating structure is yielding results.

Coca-Cola factsheet, including share prices, charts & research

Register for updates on Coca-Cola

Royal Bank of Scotland

In January RBS announced it would seek investor approval to buy back shares directly from the government. At 62.3%, the UK taxpayer is still the bank’s single largest shareholder, and it will be years before that’s fully unwound. Nonetheless, a regular buyback would represent a major step forward.

Friday’s full year results will be an important measure of how much things have improved. Although growth seems to be slowing across the sector, low rates and high levels of employment should mean that bad loans remain low.

Brexit remains a cloud on the horizon, and we’d expect the bank to strike a cautious note in its outlook. However, with markets now pricing in an interest rate rise before the end of the year, usually good news for banks, the longer term outlook for RBS is looking rosier than it has for a long time.

Royal Bank of Scotland factsheet, including share prices, charts & research

Register for updates on Royal Bank of Scotland

Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by Thomson Reuters. These estimates are not a reliable indicator of future performance. Yields are variable and not guaranteed. Past performance is not a guide to the future. Investments rise and fall in value so investors could make a loss.

This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication. Non-independent research is not subject to FCA rules prohibiting dealing ahead of research, however HL has put controls in place (including dealing restrictions, physical and information barriers) to manage potential conflicts of interest presented by such dealing. Please see our full non-independent research disclosure for more information.

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Investment notes
No news or research item is a personal recommendation to deal. All investments can fall as well as rise in value so you could get back less than you invest.

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