Next week on the stock market

Among those currently scheduled to release results next week:

• Will the froth come off for J D Wetherspoon?
• Fevertree aims to sparkle again
• Can Vistry weather the storm?

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

*Events on which we will be updating investors.

J D Wetherspoon – Derren Nathan, Head of Equity Research

J D Wetherspoon had a strong first quarter, but that was against an Omicron-impacted festive season in the prior year. Whilst customers battle with the ongoing cost of living crisis, the comparatives are getting harder. The hospitality industry is also suffering from sharp rises in costs for labour, food, energy and maintenance. We’ll be looking to see if trading deteriorated in the second quarter and whether the group retains its cautious optimism for the rest of the year. Wetherspoon has some scope to raise prices but needs to balance that against alienating its customers.

The group’s also shrinking its pub estate with a view to keeping the best performers and reducing competition between outlets. We’ll be looking out for progress on this front. Disposals will also reduce pressure on the balance sheet. Meanwhile, supply is coming out of the market as smaller pub companies fight for survival. Wetherspoon could come out of this in a stronger position, but the short term remains challenging.

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Fevertree – Aarin Chiekrie, Equity Analyst

Fevertree’s last trading update was a mixed bag. Revenues fell in the group’s core UK market, which accounts for around 34% of sales. The group blamed train strikes in the run up to Christmas for reducing bar and restaurant sales, which ultimately put a lid on UK revenue. But in the US, it was a different story. Across the pond, revenues bubbled up by double-digits compared to last year. We’re eager to see if this growth was sustained when the company reports full-year results next week.

Inflationary cost pressures were a thorn in the group’s side last year. Energy prices are a big input cost in making glass bottles, and when 80% of your sales are bottled in glass, any fluctuation in energy prices is bound to have a material impact on your costs. The group’s already said it expects another year of double-digit cost inflation, which has the potential to really squeeze margins and hurt profits. Next week’s results should provide more insight into how the group will manage this important risk moving forward.

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Vistry – Aarin Chiekrie, Equity Analyst

It’s been a bumper start to the year so far for Vistry and its investors, with the company’s valuation up more than 15% year to date. This might reflect some of the pessimism around housebuilders being unwound as conditions have been slightly better than previously forecast. However, we caution that there’s still a lot of challenges ahead and this recent rally is not a guide to the future.

In the January trading statement, we saw group revenues rise 6% to £3.8bn, helped by higher completions and average selling prices. Careful cost management helped combat build cost inflation of 8-10% as underlying operating profit grew 4% to £1bn last year. But the outlook for 2023 isn’t so rosy. Vistry’s sales volumes showed real signs of weakness, with early figures coming in well below 2022 levels. Next week’s results should give us a better idea of how the group’s preparing for these challenges.

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