Among those currently scheduled to release results next week:
17-Aug | |
|---|---|
BHP Group* | Full Year Results |
18-Aug |
|---|
No FTSE 350 reporters |
19-Aug | |
|---|---|
Ithaca Energy | Half Year Results |
JPMorgan American Investment Trust | Half Year Results |
Oxford Nanopore Technologies | Half Year Results |
20-Aug | |
|---|---|
Alibaba* | Q1 Results |
Hays | Full Year Results |
JD Sports Fashion* | Q2 Trading Statement |
21-Aug | |
|---|---|
Hunting | Half Year Results |
Alibaba’s spending spree puts returns in focus
Alibaba’s businesses have been firing on different cylinders. The cloud division is benefiting from triple-digit growth in AI-related product sales, while the core e-commerce business remains under pressure. We expect those trends to continue in first-quarter results. Revenue forecasts have barely moved and, with Chinese retail sales data coming in weak, there is scope for disappointment if cloud growth fails to pick up the slack.
Investment in cloud, AI and initiatives such as Instant Delivery has weighed on margins and cash flow. Profitability is expected to improve as cloud earnings become more meaningful, but that recovery is heavily back-end loaded, with operating profit forecast to have fallen 40% in the first quarter. Free cash flow, historically one of Alibaba’s key attractions, turned negative last year. While it's expected to return to positive territory this year, investors will be watching closely for any updates on capital expenditure plans as the AI arms race intensifies.
BHP’s operational momentum tested by lower copper outlook
BHP’s recent operational update points to a solid finish to the year with both copper and iron ore production in the top half of guidance ranges and iron ore reaching a record 265mn tonnes. Unit cost guidance was broadly positive, with most assets either in or towards the bottom of their ranges, although steelmaking coal came in towards the top end. Iron ore prices were up marginally, while average realised copper prices climbed 35%.
Consensus forecasts point to a strong financial outcome, with annual revenue expected to grow 13% to $57.8bn and operating profit 28% to $25.8bn. But keeping mines productive and bringing new assets on stream isn’t easy. Cost overruns and delays at the Jansen potash mine are expected to drive an impairment of around $2.3bn. With copper production set to fall this year, markets will want assurance from new CEO Brandon Craig that operational issues are being addressed, and growth projects remain on track.
Can JD Sports Fashion deliver a more upbeat outlook for the second half?
JD Sports will be looking to build on some early signs of improvement when it releases its second-quarter trading update next week. North America, now the group’s largest region, returned to like-for-like growth towards the end of last year as product ranges improved and supply chains became more efficient. The key question is whether that momentum has continued. Trading in the UK has been much tougher, with cautious consumers and elevated competition weighing on demand. We’ll also be watching the balance between sales and margins, particularly as JD invests more in marketing and makes targeted price cuts to support volumes.
Management expects market growth to remain muted this year, and markets echo that sentiment with half-year revenue expected to land around £5.9bn, down a touch on last year. That leaves a slight weighting toward the second half if the group wants to hit full-year expectations. JD’s shift away from aggressive expansion towards getting more from its existing stores is sensible, and stronger cash generation gives it more room to invest and return cash to shareholders. But with the UK and Europe still subdued, next week’s update needs to show that improving US trends and tight cost control can pave the way for an improved second half.
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