We gives our thoughts on what to expect from companies announcing results week commencing 24 August 2020.
Companies reporting w/c 24 August
Bunzl Plc (Q2 2020 Earnings Release)
Bunzl had got off to a solid start this fiscal year reporting a good first quarter, however as a result of Coronavirus it opted to cancel its final dividend and suspend guidance. An update in June reported they expected to see revenue rise by 5% despite the difficult conditions with increased demand in hygiene and healthcare helping to offset the weaker retail and hospitality segment. We continue to see the company's diversified product and geographic base providing the Group's investors with some defensive qualities that should help provide some comfort in these difficult times.
We currently list Bunzl as a BUY
Studio Retail (Final results)
Studio Retail is a small company best known for its catalogue business but in recent times it has seen good growth in its online retailing sites under the Studio brand which sells a wide range of products. That proved to be an advantage during lockdown as the last update in June reported a 55% rise in product sales in the first 11 weeks of the new financial year and more new customers. The market will be keen to hear if that growth has been sustained as shops have reopened in recent times. The company’s other business, educational supplies, has been struggling and an agreed sale has been held up by the competition regulator so any comments on that will also be of interest.
We currently list Studio Retail as a BUY
James Fisher & Sons Plc (Q2 2020 Earnings Release)
In the past the company was perhaps best known for its submarine rescue service, it now provides a range of specialist services to oil rigs, nuclear decommissioning, wind farms, transporting oil, wharf operations, marine equipment and monitoring stress in structures. The Group continues to be hit from project delays and lower oil prices as a result of the virus. Although guidance was withdrawn, investors will be keen to hear Management’s thoughts on the future.
We currently list James Fisher & Sons as a BUY
Rolls Royce Holdings Plc (Q2 2020 Earnings Release)
Rolls Royce has been going through a difficult time of late. Troubles with engines and radical restructuring have presented bad timing for a crisis of such magnitude. The share price has dropped considerably over the last few months as investors question the company's future outlook alongside credit rating agency downgrades. Investors will be hoping for some balance sheet resilience and further clarity from Management surrounding the future prospects of the Group in terms of future direction and aviation revival forecasts to help revive some confidence.
We currently list Rolls Royce Holdings as a HOLD
WPP Plc (Q2 2020 Earnings Release)
The past few years have proved to be difficult for the company, with cuts to future sales growth, the sudden departure of its high profile CEO, along with the loss of contracts from blue chip customers including; Pepsi, HSBC and Ford and a profit warning. The Covid-19 crisis has added to the pressure and the share price remains close to a 10-year low. Any update on cost-cutting measures and current advertising spend will be worth noting.
We currently list WPP as a HOLD
Flutter Entertainment Plc (Q2 2020 Earnings Release)
Flutter’s shares have performed very well so far this year thanks to the growth of online poker and gaming revenue and the potential for sports betting in the US. In May the company reported a 10% rise in second quarter revenues and in June sentiment towards the sector improved as most betting shops reopened and sporting events restarted. Investors will be keen to hear about progress in the US, especially for the fantasy sports business FanDuel, and any guidance on sports betting revenue given the Covid-related disruption to the calendar.
We currently list Flutter Entertainment as a HOLD
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