We give our thoughts on what to expect from companies announcing results week commencing 15 February 2021.
Companies reporting w/c 15 February
BHP Group Plc: Q2 2021 Earnings Release
Given the global economic backdrop, 2020 has proven to be a good year for large mining groups. China has navigated the crisis well and its economy was the only one of the major regions to actually grow during 2020. So, for the likes of BHP Group, demand for commodities hasn't fallen off; in fact, prices of key commodities such as iron ore and copper have staged a recovery. Investors are therefore expecting good things from the half year results. Revenues and earnings should head up, while the dividend is expected to be welcome in the current low yield world.
British American Tobacco Plc: Full Year Results
British American Tobacco’s defensive qualities and regular dividends usually make it very appealing to investors at times of great economic uncertainty – or at least those who are comfortable with tobacco stocks. Although cigarette sales are falling in many developed countries, the Group said in December that it still expected full-year revenues to grow by around 3%. This is towards the top end of the 1-3% range it had forecast previously. Performance has been helped by better-than-expected sales in the US and South Africa, where a ban on smoking was lifted in August after five months. Any comments on the prospects for sales of next generation products, such as vaping, will be of interest. Further, investors will be focused on whether the Company confirms the market’s expectations for a 6% rise in the all-important dividend.
Barclays Plc: Q4 2020 Earnings Release
The banking company’s share price has made steady progress since October, aided by an improvement in profits which were helped by the volatility in markets. Areas to focus on will be bad debt, the recent performance of its investment banking division, cost cutting measures and any news on a new dividend policy. Comments on the Group’s outlook for the year ahead will also be worth noting.
Smith & Nephew Plc: Q4 2020 Earnings Release
The global pandemic has affected the health sector in different ways, and for Smith & Nephew, it has been a challenging period. The Company’s involvement in supplying the equipment and tools needed in hospital theatres and other healthcare services has meant it has suffered as elective surgeries have been continuously cancelled or postponed. The market has seen the Company steadily downgrade it earnings expectations as a result. At the beginning of the year, Smith & Nephew effectively gave a profit warning, saying that full year underlying revenues would be hit by 12%, along with a margin contraction. The focus will now be on management’s guidance for 2021. However, as new emerging strains of the Covid-19 virus signal prolonged lockdowns, expectations for the first six months at least will be unchanged.
SEGRO Plc: Q4 2020 Earnings Release
SEGRO, unlike some other REITs, has performed resiliently over 2020, thanks to its exposure to e-commerce storage facilities which have received a boost as the pandemic led to a rise in online consumer activity. The Group informed the market back in mid-January that they had received roughly 98% of rents due for 2020. Furthermore, for advance rental payments, the Group had received approximately 88% of the £63m due for the first quarter of 2021, a higher collection level than in each of the three previous quarters. This signals a robust cash-flow, and suggests shareholders will be heading into next week with a degree of optimism. Investors are likely to focus also on any further promising news, and any information in regard to management's outlook for market and dividend growth.
NatWest Group Plc: Q4 2020 Earnings Release
The Group’s last update exceeded expectations, and investors will be hoping for further signs of improvement in this update. As with others in the sector, impairment charges as a result of the virus will attract attention. The outlook for the Group and sector in light of the virus, and also Brexit, will make for interesting reading. The government continue to hold a 62.4% stake, which hangs over the market, and the share price remains around 20% below pre-pandemic levels.
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