We give our thoughts on what to expect from companies announcing results week commencing 15 June 2020.
Companies reporting w/c 15 June
Ashtead Group Plc (Q4 2020 Earnings Release)
Shares in equipment hire group Ashtead have bounced back strongly in recent weeks after a reassuring trading update in April. In these fourth quarter figures the company is expected to report an underlying pre-tax profit of £1.05bn for the year, only slightly down on last year's £1.1bn. Investors will be looking for an update on the various measures taken to preserve cash during the lockdown and how many of its rental locations remain closed. The market will also be looking for a sense of how strong trading is in the company’s main market, the US, and what prospects it sees there for the year ahead given all the economic uncertainty.
We currently list Ashtead Group as a BUY
Telecom Plus Plc (Q4 2020 Earnings Release)
The group provide an alternative to the usual well-known utility suppliers for gas, electricity, telephone and broadband services through its Utility Warehouse brand. The group dampened down expectations in April due to lower retail energy prices, lack of recent new customer growth and increased costs. The final dividend was expected to be paid as long as bad debt does not significantly increase. The share price is close to pre-crisis levels.
We currently list Telecom Plus as a BUY
Hill & Smith Holdings Plc (Q1 2020 Sales and Revenue Release – Trading Update)
Hill & Smith, which makes a range of infrastructure and galvanizing products, said in March that its French, Indian and UK operations had been disrupted by the Covid-19 pandemic, with a slowdown in demand also seen in the US. Investors will be looking for an update on that along with any guidance for the full-year. In April the long-serving CEO Derek Muir announced his intention to retire at the end of the year, but a successor has already been found and the shares have recovered strongly over the past two months.
We currently list Hill & Smith as a BUY
Wincanton Plc (Q4 2019 Earnings Release – Preliminary)
Logistics and warehousing group Wincanton has experienced some widely differing impacts on the various parts of its business due to the Covid-19 pandemic. The logistics side has benefited from the increase in online deliveries while the construction side has seen a sharp drop in revenue. There should not be any great surprises for the market given its only three weeks since the company provided its last update. At that stage the company said its performance for the year to March was in line with expectations although April had seen a 15% drop in revenue and the final dividend had been suspended.
We currently list Wincanton as a BUY
Other companies reporting this day includes SSE Plc (Q4 2020 Earnings Release) – HOLD
National Grid Plc (Q4 2020 Earnings Release)
All investor eyes will be on the dividend and any further comment regarding future payments. Earlier in the year the group stated it had not had any material hit from the virus, but would monitor the situation before making a dividend decision. The defensive nature of the sector has come to the fore in the current crisis, with the shares down by around 10%.
We currently list National Grid as a BUY
John Wood Group Plc (Q2 2020 Sales and Revenue Release – Trading Update)
Given the current crisis and the impact it has had on the price of oil, investors have been concerned with the future prospect of a business involved in oil services as major oil producers look to cut back on costs and halt capacity expansion. Investors will no doubt expect John Wood to do the same by looking closely at their own cash flows and costs and we may expect to see renewed focus on debt reduction plans which have already been slower than previous plans. The order book last stood at around $8bn and this will likely have reduced since especially within conventional energy services. However there is hope there will be more activity in other areas such as renewables. It may also be too early to talk of a resumption of any dividends.
We currently list John Wood Group as a BUY
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