We gives our thoughts on what to expect from companies announcing results week commencing 21 September 2020.
Companies reporting w/c 21 September
Informa Plc (Q2 2020 Earnings)
Informa has been among the companies to have taken a big hit due to the global pandemic, as one of its key businesses involved in exhibitions and conferences is all but shut in a physical sense. Some events may have switched to online, but this is not the same as having physical events where delegates can see and feel the products. It may not be worth arranging physical events, with the ongoing threat of lockdowns risking events being cancelled and delegates not being sent. Investors have written off 2020 earnings in this area and are looking forward to 2021. Nonetheless, this is still a diversified group with academic publishing and journals doing well in the current environment, especially in the medical field.
We currently list Informa as BUY.
Kingfisher (Interim Results)
The market has been impressed by the new CEO and his willingness to challenge much of what his predecessor had done. The approach seems to be working already, with a strong rebound in sales in the second quarter thanks to good growth in online sales and a better performance at the long-suffering French operations. Investors will be keen to see if those trends have continued and to hear if the company is providing any guidance on the second half. The shares have responded well to the signs of a turnaround in the company’s fortunes and the company has re-entered the FTSE 100, but fears remain that a prolonged economic slowdown could reduce consumer spending.
We currently list Kingfisher as HOLD.
Smiths Group Plc (Q4 2020 Earnings)
At the last update, the diversified industrial group said that trading had remained resilient amidst the global pandemic, but it is expected that its oil services division, John Crane, and Flex-Tek, which serves the construction and aerospace industries, will feel the impact of the downturn most. Its full year results, which ended in July, will only partly reflect the crisis, with full year revenues still expected to creep up. A trading update from the start of the new financial year will be sought after, along with an update on progress regarding the divestment of the medical division.
We currently list Smiths Group as BUY.
United Utilities Group Plc (Q2 2021 Sales and Revenue Release – Trading Update)
There are growing concerns for investors over bad debts as a result of the virus, which in turn could put pressure on the all-important dividend. The group have already stated that their dividend policy is under review. A forward yield of around 4.9% looks attractive, but at the moment comes with added risk.
We currently list United Utilities Group as BUY.
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.