We give our thoughts on what to expect from companies announcing results week commencing 13 July 2020.
Companies reporting w/c 13 July
Ocado Group Plc (Q2 2020 Earnings Release)
Ocado is now split between Ocado Retail, the joint venture delivery business with M&S, and Ocado Solutions, a global leader in the technology of automated warehouses (CFC). The retail side has done very well during lockdown with revenues up 40% in the second quarter. Since then the company has reported a return to more normal trading levels and investors will be interested to hear if that remains the case. Given it is still loss-making the market will also be looking at how quickly the company is going through its cash pile, although that was bolstered by a £1bn capital raising exercise in June.
We currently list Ocado as a HOLD
Halma Plc (Q4 2020 Earnings Release)
In April the safety, health and environmental technology group, said in a statement ahead of these full year results that it expected profits to be £265-270mn with revenues of around £1.3bn. The company also said it expected to perform resiliently through the Covid-19 pandemic although it did anticipate an adverse impact in the new financial year. The market will be looking for more detail on the scale of that in these results, alongside how successful the mitigating actions have proved and how quickly the company sees its markets recovering.
We currently list Halma as a HOLD
Severn Trent Plc (Q1 2021 Sales and Revenue Release - Trading Update)
Severn Trent is mainly focused on water and supply services to households and businesses in Wales and the Midlands. Investors will be looking for an update on potential bad debts as a result of the virus, along with further news on its Water Plus joint venture. As is always the case any further comments on the dividend will be worth noting.
We currently list Severn Trent as a HOLD
Other companies reporting today include: Burberry Group Plc (Q1 2021 Sales and Revenue Release - Trading Update) – HOLD
Experian Plc (Q1 2021 Sales and Revenue Release - Trading Update)
The world’s largest credit data group has expanded the range of industries it services. The US remains its most important market where around 60% of Group revenue is generated. Attractions include solid revenue growth, strong cash flow and margins, limited concerns over competition and a diversification strategy that has moved it away from relying on the bank sector. The share price has recovered back to pre-crisis levels as investors focused on its defensive qualities and the fact the Group had only experienced limited impact from the virus.
We currently list Experian as a BUY
SSE Plc (Q1 2021 Sales and Revenue Release - Trading Statement)
News is expected from the regulator on 9 July, which may lead to a reaction from the Group. As a result of asset sales the Group’s future, focus will be on renewable energy and electricity transmission. The impact of Covid-19 is expected to be between £150mn - £250mn and any further update on that will be of interest. SSE will be cutting spending by up to £250mn and hope to raise £2bn from disposals. The majority of investors in the company focus on the dividend and the June update added some reassurance on this, with expectations for the year ahead of 80 pence plus the RPI measure of inflation.
We currently list SSE as a HOLD
Other companies reporting today include: Anglo American Plc (Q2 2020 Sales and Revenue Release - Production Report) – HOLD
Rio Tinto Plc (Q2 2020 Sales and Revenue Release - Operational Review) - BUY
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