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  • Next week on the stock market

    We take a look at what to expect from a selection of FTSE 100, FTSE 250 and selected other companies reporting next week.

    Important notes

    This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

    Among the companies reporting next week:

    • ASOS will highlight what continued lockdown has meant for spending patterns
    • We hope to hear more about Johnson Matthey's plans to remain relevant as electric vehicles replace traditional cars
    • Saga comes to the end of a difficult year

    FTSE 100, FTSE 250 and selected other stocks scheduled to report next week

    No FTSE 350 Reporters
    Homeserve Trading Statement
    Carnival* Trading Statement
    Hilton Food Full Year Results
    Saga* Full Year Results
    ASOS* Half Year Results
    Dunelm Q3 Trading Statement
    Ferrexpo Q1 Production Volume
    Johnson Matthey* Pre-Close Trading Statement
    No FTSE 350 Reporters

    *Companies on which we will be writing research.

    Johnson Matthey – Sophie Lund-Yates, Equity Analyst

    The pandemic slashed car production volumes, which hit Johnson Matthey hard. But management could report some better news, as car sales start to recover. An uptick in auto sales would help underlying profits regain some ground.

    Longer-term though, the shift to electric cars means the main focus is on JMAT’s transition to become a supplier for batteries and hydrogen fuel cells. The group’s trial eLNO plant looks promising—we’re keen to see whether it’s still on track to open the first commercial plant within the next year. The New Market division (where the eLNO project is housed) makes up a small part of overall revenue, so it has a long way to grow before making a meaningful impact.

    Time is of the essence if JMAT is to pull off a strategy shift before the market for traditional cars evaporates completely. We’ll be looking for the group to plough any additional profits from the auto recovery straight back into growth in its Health and New Market divisions, so capital expenditure in those divisions will be one to watch.

    See the Johnson Matthey share price, charts and how to deal

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    ASOS – Sophie Lund-Yates, Equity Analyst

    First on the agenda will be margins. ASOS benefitted from better-than-expected demand last quarter, as more people continued to shop online. However, the shift away from occasionwear to lockdown category items, and increased investment meant gross margins dipped 90 basis points. In the UK, the “roadmap” out of lockdown means more customers might have spent on more expensive items in Q2, ready for easing restrictions. But the picture’s less bright in other markets, like the EU – which makes up around 28% of revenue.

    We’ll also be keeping an eye out for commentary on the brand acquisitions from February. The Topshop, Topman, Miss Selfridge and HIIT brands are expected to incur around £20m of one-off restructuring and transaction costs this year. Ideally the plan’s on track, and that figure isn’t set to get any higher.

    A price to earnings ratio of 37.5 is lower than it has been, but still suggests the market has high expectations. Revenue rose double digits in every region in the first quarter, and we suspect anything less than a similar performance to round off the first half could disappoint the market.

    See the ASOS share price, charts and how to deal

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    Saga – Nicholas Hyett, Equity Analyst

    Saga’s cruise and travel businesses remain frozen in time, plunged into the deep freeze by global travel restrictions. That puts a lot of pressure on the general insurance business to keep things ticking over.

    Fortunately, the general insurance industry has weathered the coronavirus crisis reasonably well. Cars and homes still need to be insured, but with more of us stuck at home, motor claims in particular have generally trended down.

    We already know Saga’s customer retention has been reasonably strong this year and when you put solid premiums together with lower claims you have the potential for a good year at the bottom line.

    Unfortunately, we suspect any progress will be overshadowed by efforts to prop up the rest of the group in the near term. However, if the group can plot a clear path to positive free cash flow in 2021 then that would be a major achievement in itself.

    See the Saga share price, charts and how to deal

    Unless otherwise stated estimates are a consensus of analyst forecasts provided by Refinitiv. These estimates are not a reliable indicator of future performance. Past performance is not a guide to the future. Investments and income they produce can 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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      Important notes

      This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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