We give our thoughts on what to expect from companies announcing results week commencing 1 July 2019.
Companies reporting w/c 1 July
St Modwen Properties (Q2 2019 Earnings Release)
For a property company the share price has held up relatively well and is trading close to a 1-year high. The group specialises in the regeneration of brownfield sites. They have now entered the next phase of their strategy which aims to build a high quality industrial and logistics business, grow residential and housebuilding and leverage their regeneration reputation. Investors will be keen to hear management views on the sector especially with regard to Brexit.
We currently list St Mowden Properties as a BUY
Sainsbury (Q1 2020 Sales and Revenue Release - Trading Statement)
Recent news that the group’s market share continues to fall will do little to ease market concerns. This has been reflected in the share price which is currently close to a 20-year low. It would appear that expectations are low for any recovery in sales, which fell by 0.9% over the previous quarter. The rise in Aldi and Lidl has made life increasingly difficult for the group and the failure to tie-up with Asda has heaped further pressure on the CEO to come up with another recovery plan.
We currently list Sainsbury as a HOLD
Associated British Foods (Q3 2019 Sales and Revenue Release – Trading Update)
The group's last set of half year results fell short of expectations but the clothing business did help offset the issues at the food ingredients and sugar division. Once again the sugar business will more than likely act as the drag since sugar prices haven't staged a noticeable recovery. The Primark business should continue to see sales increases through international store expansion but the mixed weather so far in the lead up to the summer season may have resulted in an imbalance between the type of clothing stocked up and what customers actually wanted.
We currently list ABF as a HOLD
Persimmon (Q2 2019 Sales and Revenue Release – Trading Update)
Period of solid sales and earnings growth is almost certainly over for the sector with growth returning to historic norms. As with other housebuilders, for the last trading period Persimmon is likely to show low to mid-single digit growth rates that are hampered by average selling prices barely rising. Meanwhile margins will be held back by rising material costs and the reduced availability of skilled labour. The forward order book is already lower than the same period last year and the Brexit impasse will have done nothing to improve potential home buyer’s confidence.
We currently list Persimmon as a HOLD
All information given including prices, yields and our opinion is correct at the time of publication. Our opinions on investments can change at any time and for our latest view please go to www.share.com. To understand how our Investment research team arrive at their views please read our Investment Research Policy.