We give our thoughts on what to expect from companies announcing results week commencing 4 May 2020
Companies reporting w/c 4 May
ITV Plc (Q1 2020 Sales and Revenue Release – Trading Update)
The continued threat from coronavirus and the effects it is having on advertising spend, especially from travel companies and airlines is likely to dominate the update. The Group previously stated advertising revenues would decline by around 10% in April. Like many it cancelled its final dividend along with guidance for the year and expectations are for further cost cutting measures. The share price has been hit hard in the recent market sell-off, hitting an eight year low in early April.
We currently list ITV as a HOLD
Smith & Nephew Plc (Q1 2020 Sales and Revenue Release – Trading Update)
The postponement of elective surgeries amid the Covid-19 outbreak has hit sales for the medical devices manufacturer and in an earlier update management suggested Q1 revenues would fall by roughly 8% compared to the same period last year. The impact should also carry on into the second quarter with a material hit to first half margins. The Group has taken steps to cut back on costs such as travel, events and advertising and put a freeze on hiring. Since the last update it will be interesting to see if the company has switched manufacturing to other medical products in much need during this crisis.
We currently list Smith & Nephew as a BUY
InterContinental Hotels Group Plc (Q1 2020 Sales and Revenue Release - Trading Update)
There shouldn’t be too many surprises for investors in these figures as the company issued a trading update very recently. It revealed revenue per room had fallen 25% in the first quarter and 55% in March. These are dramatic numbers but hardly a surprise given the widespread hotel closures and restrictions. There has been better news from China with the performance there improving steadily so investors will be interested in any update on that and what the company expects from its hotels in Europe as they slowly reopen. The shares more than halved in the space of four weeks but have regained much of that ground since.
We currently list InterContinental Hotels Group as a HOLD
RSA Insurance Group Plc (Q1 2020 Sales and Revenue Release - Trading Update)
Things were all going so well for RSA up until a few weeks ago, with good signs of improvement reflected in the full-year figures in February showing a much better underwriting performance and key performance measures such as return on tangible equity getting close to the top of the company's target range. As with so many the Covid-19 outbreak changed all that in March with RSA forced to suspend dividend payments. In this Q1 update investors will be looking for any comments on how long the company expects that to last.
We currently list RSA Insurance Group as a HOLD
BT Group Plc (Q4 2020 Earnings Release)
The Covid-19 outbreak has had a rather more personal impact on BT than other companies with its CEO Philip Jansen testing positive for the virus in March, so his health and wellbeing will be foremost in investors’ thoughts. The defensive nature of the company’s business has not prevented the shares from dropping sharply this year, down around 36% so far. In this fourth quarter update investors will be watching the performance of the all-important consumer business and also looking out for any news on the talks to sell the company’s French domestic operations to Computacenter. The third quarter figures in January were rather unexciting so investors will be hoping for better news.
We currently list BT Group Plc as a HOLD
Coca Cola HBC (Trading Update)
Soft drinks bottler Coca Cola HBC achieved good sales in the final quarter of last year, especially in the low and no sugar categories. However, the restrictions brought in across Europe relating to Covid-19 reduced its sales in central and southern Europe. With signs of some easing in those restrictions in some countries, investors will be interested to hear whether sales have improved and the company can now provide some full-year financial guidance in these first quarter figures.
We currently list Coca Cola as a HOLD
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