We give our thoughts on what to expect from companies announcing results week commencing 16 March 2020.
Companies reporting w/c 16 March
Ferguson Plc (Q2 2020 Earnings Release)
Ferguson is the world's largest distributor of plumbing and heating products. The focus remains on improving customer service, organic revenue growth, margin expansion, cost control and cash generation. The group is demerging its UK operations with Management considering a US listing for the main part of the business and set to announce the decision in the spring after discussions with major shareholders. The US performance is the key and investors will focus on the Group’s outlook for the region.
We currently list Ferguson as a HOLD
Wm Morrison Supermarkets Plc (Q4 2019 Earnings Release)
In the face of strong competition from the likes of Aldi and Lidl times have been difficult for the UK's fourth-biggest supermarket, with its market share heading in the wrong direction. Restructuring plans have involved cost cutting, improving customer service and range of products. Operating cash flow has been improving leading to special dividends, but the last update in January posted falling like for like sales. Any comment regarding the tie up with Amazon will be worth noting.
We currently list Wm Morrison Supermarkets Plc as a HOLD
The Gym Group Plc (Q4 2019 Earnings Release)
The shares have been hit hard in the wake of the Coronavirus outbreak, in line with many others in the travel and leisure sector. In January the company provided a very upbeat trading statement which showed the good growth it saw in the second half of 2019 had carried into the early part of 2020. In these full-year figures the market will be especially interested in what growth the company expects this year for its premium LIVE IT membership level, and whether its plans to open new locations in 2020 have been altered due to concerns that the virus may reduce demand. The company has begun to open “small box” gyms and any news on how that experiment is going will also be of interest.
We currently list The Gym Group Plc as a BUY
Halma Plc (Q3 2020 Sales and Revenue Release)
With the increasing demand in the health and safety sector, the protection equipment manufacturer looks well positioned to benefit further from its focus on niches in a diverse range of markets. Products include instruments that detect hazardous gases, security sensors, smoke detectors and devices for assessing eye health. They are regarded as having an increasingly well balanced geographical spread of its operations, helped by acquisitions and have delivered consistent increases in revenues, margins and profits. Despite being on a high rating, analysts remain positive on the longer-term outlook.
We currently list Halma as a HOLD
Ocado Group Plc (Q1 2020 Sales and Revenue Release)
The company recently revealed it has seen a sharp spike in orders, especially large orders, as a result of concerns around Coronavirus. It is certainly not alone in that with many of the big supermarkets seeing similar consumer behaviour, but even before the recent surge Ocado saw its market share rise according to data from Kantar. The market will also be looking for an update on its preparations for the much-anticipated start of the Marks & Spencer delivery service, which is due to happen in September. Prospects for the Solutions business this year will also be of interest, especially fee income and any new contracts.
We currently list Ocado as a HOLD
All information given including prices, yields and our opinion is correct at the time of publication. Our opinions on investments can change at any time and for our latest view please go to www.share.com. To understand how our Investment research team arrive at their views please read our Investment Research Policy.