Next week on the stock market

Among those currently scheduled to release results next week:

• Bunzl looks for double digit top line growth
• Will Persimmon's foundations hold strong?
• How far can Reckitt push prices?

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

*Events on which we will be updating investors.

Bunzl – Matt Britzman, Equity Analyst

Bunzl sources, consolidates, and delivers a range of essential products to businesses. Think food packaging, cleaning products and safety equipment – though that’s just the tip of the iceberg. Next week marks the release of full year results, and expectations are high. The top line, ignoring the effect of currency changes, is expected to grow around 10% - expect to see a good chunk of that coming from higher prices and acquisitions.

Acquisitions have long been a driving force for growth at Bunzl, so it’s always something worth keeping an eye on. Back in December, markets were given details on the purchase of four businesses and the sale of its UK healthcare division to Mediq. The additions look like good complements to the existing portfolio, generating enough existing profit to offset the sale to Mediq. Acquisition plans for the new year, including details on the pipeline and anticipated spend, will be eagerly watched.

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Persimmon – Aarin Chiekrie, Equity Analyst

Persimmon’s feeling the pressures of a tough housing market, and the group’s valuation has tumbled around 40% in the last 12 months as a result. We’ve already heard that “notably weaker” customer demand and higher cancellations pushed full-year forward sales down from £1.6bn to £1.0bn in 2022. And as the mortgage rate environment remains challenging for home buyers, we don’t expect to hear things picking up in this area.

Next week’s more detailed full-year results should paint a clearer picture of other areas like cost inflation. The entire industry has been facing high material and labour costs, which eats into profitability. Persimmon’s business model includes some in-house suppliers which could help in this regard, so we’re keen to find out whether they’ve been able to relieve some of those cost pressures.

But we’re most interested in the outlook statement. The group should give an indication of how forward sales have been at the start of this year, as well as what the rest of 2023 could look like. The fear is that the current dip in house prices could be the start of a bigger correction. If that looks like the case next week, there could be a negative market reaction, despite a lot of concerns already being priced in.

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Reckitt Benckiser – Matt Britzman, Equity Analyst

We’re hoping for a decent set of results from Reckitt when they release full year numbers next week. Like-for-like net revenue growth of 6-8% is the target, with growth in underlying operating margin. Volumes will be key, having fallen 4.6% in the third quarter. Though, the headline number didn’t tell the full story. Excluding Lysol, which is normalising from heightened pandemic demand, volumes were only down 1%. We’re not expecting price hikes to end any time soon, so if underlying volume declines can stay in the current range, that’d be a good result.

The outlook on Nutrition will also be key. Lack of supply in the US has been a major tailwind over the year, one that’s expected to tail off. Management have previously said they could retain as much as 70% of the excess market share they picked up this year. Whether that figure’s achievable remains to be seen but as the new number one paediatrician recommended brand, it’s possible they could keep a good chunk.

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