Nicholas Hyett 12 October 2018
Strictly Come Dancing’s been lighting up our newsfeeds this week.
We can’t promise any glitter in next week’s company results, but scorecards will be out for the UK economy. Unemployment, inflation and retail sales figures are all due to be released.
Among the companies hoping to post straight tens:
- Can ASOS deliver impressive growth plans without splashing too much cash?
- A trading statement from Barratt Developments provides an insight into the temperature of the housing market.
- Fresh from its embarrassing U-Turn, Unilever will want to show it’s still on the right track.
FTSE 350 stocks reporting next week
|Schroders||Q3 Management Statement|
|Rio Tinto||Q3 Production Results|
|Bellway||Full Year Results|
|BHP||Q1 Operational Review|
|Merlin Entertainments*||Q3 Trading Statement|
|Polymetal||Q3 Production Results|
|ASOS†||Full Year Results|
|Barratt Developments*||Trading Statement|
|Hochschild Mining||Q3 Production Results|
|Mediclinic International||Half Year Trading Statement|
|Rathbone Brothers||Q3 Interim Management Statement|
|Segro||Q3 Trading Statement|
|Softcat||Full Year Results|
|Domino's Pizza Group||Q3 Trading Statement|
|International Personal Finance||Q3 Trading Statement|
|National Express||Q3 Trading Statement|
|Rank Group||Trading Statement|
|Rentokil Initial||Q3 Trading Statement|
|Dechra Pharmaceuticals||Trading Statement|
|Essentra||Q3 Trading Statement|
|InterContinental Hotels*||Q3 Trading Statement|
|London Stock Exchange||Q3 Management Statement|
|Provident Financial||Q3 Trading Statement|
*Companies on which we will be writing research
†Covered by Hargreaves Lansdown but not a member of the FTSE 350
ASOS has achieved a lot since it launched in 2000.
It’s bagged over £1bn of sales a year since 2015, and as a company it’s worth more than many high street rivals.
The last time we heard from the group it warned full year sales are likely to be at the lower end of expectations. That was disappointing, but with revenues still set to be the region of 25 – 30%, and profit before tax up 26.1% ASOS is still a force to be reckoned with.
Investors shouldn’t lose sight of the costs associated with that growth though especially as costs have had a tendency to exceed expectations. While it’s good to see ASOS investing in the future, we’ll be looking out for any further unscheduled upticks here.
The UK’s second largest housebuilder levelled its foundations lately. A combination of rising revenues and expanding margins means profit before tax has improved. That’s helped the group strengthen its balance sheet, ending last year with a strong net cash position (before accounting for land creditors). Given the hammering Barratt received in the last downturn, these efforts aren’t to be sniffed at.
That said, recent successes have been buoyed by helpful government schemes and low interest rates. These conditions can’t last forever- Barratt needs to continue improving its underlying business to satisfy investors it can hold its own.
All in, Barratt’s in a much sturdier position than it was a few years ago. But we’ll be hoping for more signs of well-controlled expansion before memories of more challenging times can be totally forgotten.
U is for U-Turn, oh and also for Unilever. The newspapers have been dominated by Unilever’s plans to scrap its dual listing structure and base itself in Rotterdam, only for the plans to be scuppered by UK shareholders.
Putting that drama to one side though, Unilever’s fundamental strengths are unchanged. With brands from Persil to Pot Noodle, a lot of us have Unilever products in our cupboards. The group reaches a huge 2.5bn customers every day.
Progress in emerging markets has been a bit sluggish of late, but overall sales growth for the full year is still expected to come in between 3% - 5%. Improvements to operating margins are also due. Next week’s statement will hopefully show Unilever’s on the right track to hit those targets.
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