We give our thoughts on what to expect from companies announcing results week commencing 11 November 2019.
Companies reporting w/c 11 November
Informa Plc (Q3 2019 Sales and Revenue Release - Trading Update)
The publishing group has reported steadily growing businesses and profits in recent years and there isn't too much to suggest this should change too soon. The academic journals business is expected to show a slow but steady rise in subscription revenues while other publications continue their progress to online subscriptions. Investors will expect more synergy benefits to come through from the transformational UBM acquisition; Penton Information Services and the subsequent divisional reorganisation. Investors will also focus on some of the group's weak spots which have been in the US Medicals journals, Europe and Latin America, and hope that these areas can turn around and match the good performances in all other parts of the business.
We currently list Informa as a BUY
ITV Plc (Q3 2019 Sales and Revenue Release - Trading Update)
ITV’s share price has performed well since the company released H1 results back in July and investors will be hoping this momentum, particularly in online revenues, can continue in their Q3 earnings release. Investors will hope cost-savings targets are continuing to progress well and the solid balance sheet is maintained providing the company greater flexibility on decision-making. This is becoming increasingly important as the market continues to experience intense competition, with peers all battling for market share.
We currently list ITV as a HOLD
Meggitt (Trading Update)
Meggitt has displayed strong performance over the course of 2019 currently with its share price up approximately 34% YTD. Interim results in July illustrated robust underlying profits alongside a strong order intake; boding well for management confidence moving forward. This resulted in the interim dividend being increased by 5%. Investors will be looking for similar momentum on its performance outlook in the companies trading update next week; with hope that the upgraded guidance announced earlier in the year is maintained despite difficult market conditions.
We currently list Meggitt as a HOLD
Vodafone Group Plc (Q2 2020 Earnings Release)
Now the dividend has been cut, investors have less to worry about and can look forward to Nick Read's strategies to turn the telecoms giant around. Investor's focus will go on the balance sheet and the investment commitments going into 5G networks, some of which should be helped by plans to monetise its portfolio of mobile phone masts in Europe. How it plans to monetise this will also be sought out, whether via a sale or IPO and whether this will be on a country by country basis.
We currently list Vodafone as a BUY
Other companies reporting this day include: Land Securities Group (Q2 2020 Earnings Release) – HOLD
The British Land Co. Plc (Q2 2020 Earnings Release)
These are not easy times for commercial property groups with exposure to the troubled high street retail sector. Full-year results in May showed the ongoing strains in the business with both profits and net asset value per share falling, although there was quite a marked contrast in the performance of the company’s office and retail assets. It was reassuring for investors to hear in September that the company’s retail properties had outperformed the sector and the market will be keen to see if that remains the case in these interim figures. The fact that a No Deal Brexit scenario now looks less likely has given the whole sector a boost in recent weeks. The market will get a little bit of a steer from Land Securities who are due to report results the previous day.
We currently list The British Land Co as a HOLD
Wincanton (Q2 2020 Earnings Release)
The shares of logistics group Wincanton received a boost in October when it revealed it was considering a takeover of rival Eddie Stobart Logistics, which is almost as large as itself. Investors will be keen to hear any update on that issue in these interim results, as well as more details of the new business wins the company mentioned in its previous update. The company has exposure to both traditional high street and online retail but it is the latter which has given it the biggest boost in recent years and the market expects that to continue.
We currently list Wincanton as a BUY
Taylor Wimpey (Q3 2019 Sales and Revenue Release – Trading Statement)
The housebuilding sector has had an excellent few years and Taylor Wimpey is no exception. However, the market expected a slowdown this year and first half figures in July provided some evidence of that. While volumes should remain high in this second half trading update the market will be focusing on the level of build cost inflation and its impact on profit margins. The shares have been volatile in recent months due to Brexit uncertainty and concerns about a shortage of skilled labour. With an election looming any comments on the new government’s housing policy will be of interest.
We currently list Taylor Wimpey as a HOLD
Other companies reporting this day include: SSE Plc (Q2 2020 Earnings Release) – HOLD, Tullow Oil Plc (Q3 2019 Sales and Revenue Release – Trading Update) – BUY
Burberry Group Plc (Q2 2020 Earnings Release)
The Q1 trading numbers provided a lot of encouragement to investors as Riccardo Tisci's new lines met approval on the cat walk and sold very well amongst customers taking new products lines to roughly 50% of total sales. Trading was good in most regions even in Hong Kong and China, but with the political unrest ongoing, investors should not be overly surprised if this has affected sales in one of its key geographies. Also with the global economic slowdown, there is some trepidation that consumer confidence in general is weakening, but how it affects the luxury market will be interesting to see as the high end markets occasionally behave differently.
We currently list Burberry as a HOLD
National Grid Plc (Q2 2020 Earnings Release)
National Grid release earnings next week and investors will be looking for progress related to the new cost-efficiency programme which has been launched. With regulators beginning to clamp down on profits in the sector, cost-cutting seems to be one of the key drivers behind generating more sustainable returns moving forward. However, it is likely some investor’s attention will be more drawn towards the end of year general election where the possibility of a Labour government places a bigger worry on the outlook for the company.
We currently list National Grid as a BUY
Other companies reporting this day include: 3i Group Plc (Q2 2020 Earnings Release) - we do not currently have a view on this stock.
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.