We give our thoughts on what to expect from companies announcing results week commencing 29 June 2020.
Companies reporting w/c 29 June
Porvair Plc (Q2 2020 Earnings Release)
As a specialist filtration and environmental technology Group, demand in certain areas of the business will have declined as a result of the Covid 19 crisis, along with its exposure to the aerospace industry, but its Laboratory business is expected to be busy. The Group is unlikely to give guidance for the rest of the year. With a significant part of revenue coming from the US, investors will be keen to hear how that part of the business is doing.
We currently list Porvair as a BUY
J Sainsbury Plc (Q1 2021 Sales and Revenue Release - Trading Statement)
The share price has held up relatively well over the crisis, as a result of the sector’s defensive characteristics, but still hovers close to a 20-year low. The rise in Aldi and Lidl has made life increasingly difficult. Where this leaves long suffering shareholders is difficult to assess. Investors will as ever be concentrated on the effects that Covid-19 is having on the company and sector.
We currently list J Sainsbury Plc as a HOLD
Rolls-Royce Holdings Plc (Q1 2020 Sales and Revenue Release - Trading Update)
Rolls Royce has been going through somewhat of a rough time as of late with Covid 19 suppressing global air demand and the Group having to conduct one of the biggest restructurings of its time, slashing dividends and announcing the cull of 9,000 jobs in a bid to prepare for the disruptive years ahead. Investors will be eagerly anticipating any outlook or developments from Management, now that civil aviation is slowly returning. It is unlikely to be a quick paced recovery at Rolls Royce with the Group more exposed to larger bodied aircraft which is an area likely to see reduced demand particularly in the nearer term.
We currently list Rolls-Royce as a HOLD
Other companies reporting today include: EasyJet (H1 2020 results) - We do not currently have a view on this stock
Associated British Foods Plc (Q3 2020 Sales and Revenue Release - Trading Update)
We would expect contrasting figures from the different businesses of this conglomerate during this crisis environment, while its defensive food ingredients and sugar business will feel the impact to a certain extent (however some food items have been selling well during home confinements), it will be nothing like that experienced by its Primark clothing division. As all stores were closed in April and May, with some reopening again only recently, its high street only model will make them a very poor comparison against other clothing retailers who have an online presence.
We currently list Associated British Foods as a HOLD
DS Smith Plc (Q4 2020 Earnings Release)
Global lockdowns will certainly hit the demand for packaged goods and therefore the demand for packaging, however the surge in online shopping during the period will offset this to a certain extent. The impact will be felt in the final month of their full year which ended in April and given they were trading well before the crisis, the full year sales and profits should only see a mild impact. Investors though will be more interested in how trading has been since then and as lockdowns are being eased. The dividend was placed on hold at the last update so comments on when they can resume will be keenly followed.
We currently list DS Smith as a BUY
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