We give our thoughts on what to expect from companies announcing results week commencing 16 September 2019.
Companies reporting w/c 16 September
Ocado (Trading update)
Historically Ocado was mainly a food delivery firm, but increasingly its focus is on developing and selling its automated warehouse technology and systems to major retailers around the world who are looking to increase their online sales. Interim results in July showed revenue growth, but also a pre-tax loss of £43mn. The company also lowered its full-year earnings guidance by £25mn so that will be a major focus in this update. The company suffered another fire at one of warehouses in August, this time at Erith, which follows the much bigger incident at Andover in February. Investors will be interested in how the rebuilding of the latter is progressing.
We currently list Ocado as a HOLD
Kingfisher Plc (Q2 2020 Earnings Release)
For some time the DIY retail group has seen a marked contrast in the performance of its different businesses, with Screwfix in the UK doing well while the French operations have struggled. It is unlikely that will have changed in these interim results, which will be the last by outgoing CEO Veronique Laury. A week after these results she will make way for Thierry Garnier, who has had a long career in management at Carrefour. The company is in need of some good news for investors, as can be seen in the struggling share price. In May the first quarter update provided a little cheer thanks to better sales in the UK, but France saw another 5.1% drop.
We currently list Kingfisher as a HOLD
Next Plc (Q2 2019 Earnings Release)
The clothing retailer has defied much of the gloom on the high street so far this year. In the last update, covering the second quarter, the company reported online sales were up by 12% although those in the physical stores continued their long term decline with a 4.2% fall. However, Next was still able to increase its full-year profits guidance to £715mn-£725mn, and the market will be looking out for an update on that. With so much depending on the upcoming Christmas trading period, and all the uncertainty around Brexit, it will be hard to predict profits but the thoughts of CEO Simon Wolfson are always worth hearing.
We currently list Next as a HOLD
Smiths Group Plc (Q4 2019 Earnings Release)
One of the last conglomerates left in the UK has seen its share price stage a decent recovery since the beginning of this year, as various divisions have begun to report better trading conditions especially its oil services division while the detection business benefits from improved government spending. However, a strategic disposal programme and the planned separate listing of the Medical division has got investors most excited and they will expect further updates on this. For the full year results investors have priced in a 5% increase in sales and roughly 7% increase in EBIT.
We currently list Smiths Group as a BUY
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