Companies reporting w/c 22 Febraury

We give our thoughts on what to expect from companies announcing results week commencing 22 February 2021.

Monday

Associated British Foods Plc: Q2 2021 Sales and Revenue Release – Pre-Close Trading Update

It is only a month since the last trading update from Associated British Foods, so it’s unlikely much will have changed for the conglomerate. The lockdown that remains in force in the UK continues to have a significant impact on the Group’s Primark clothing chain. In January, Primark reported a 30% drop in sales and, unlike many of its rivals, it doesn’t have the benefit of online sales to offset the store closures. Fortunately, other parts of the Group, such as its sugar and grocery businesses, have been performing well and investors will be keen to hear if that is expected to continue.

Tuesday

HSBC Holdings Plc: Q4 2020 Earnings Release

The share price has been rising recently on the back of growing hopes that the bank will announce the reinstatement of dividend payments soon. Other areas to concentrate on will be impairment charges and the outlook for the Asian region for the year ahead, where the majority of HSBC’s profits are derived. Any further news on cost cutting or restructuring measures will also be worth noting.

Wednesday

Reckitt Benckiser Group Plc: Q4 2020 Earnings Release

The Company produces a number of well-known brands (for example Dettol and Nurofen) and products that are generally considered as everyday necessities in developed markets. The share price has been drifting lower over the past six months, possibly on the back of the market’s assumption that demand for its cleaning products, which has been boosted by the pandemic, will start to fall off. The Group’s outlook, especially regarding sales guidance, will be important, along with North American performance, online sales and thoughts on any disposals.

Thursday

Anglo American Plc: Q4 2020 Earnings Release

The mining sector is having a strong year, and Anglo American’s peers have so far reported excellent results. This is driven by sustained demand from key consumer China, and commodity prices that have continued to edge higher during the year, partly due to previous supply constraints. Investors are expecting good figures from Anglo American too, but the Company's South African focus raises issues of industrial disputes and potential operational difficulties due to the virus. Investors will keep an eye out on the debt levels, which remain high but are expected to steadily decline, unlike its bigger peers. The dividend will comparatively be less attractive.

BAE Systems Plc: Q4 2020 Earnings Release

BAE have undoubtedly been affected by the pandemic. However the Group has remained relatively resilient operationally thanks to longer dated contracts and a large order backlog, which should continue to contribute to top-line growth over the coming years. BAE reinstated its dividend in 2020, which will have pleased investors, and the update back in November showed positive signs from management. Investors will be hoping for similar news next week.

Hikma Pharmaceuticals Plc: Q4 2020 Earnings Release

The generic drugs producer seems to have done reasonably well compared to other major pharmaceuticals amidst the global pandemic, thanks to its Middle Eastern and North American exposure which are generally growing at a good pace. Focus will now turn to how Hikma is faring with its new product launches. The recent news that the Company is in talks to acquire Glaxo's Egyptian business will also be a closely-monitored area. Investors are pricing in roughly 12% growth in earnings, while the final dividend is likely to remain at last year's level.

Friday

International Consolidated Airlines Group SA: Q4 2020 Earnings Release

The aviation industry has continued to suffer as further lockdowns have ensued, severely reducing air travel yet again. With passenger demand not expected to return until 2023, it is not surprising to see investors so anxious. The Group continues to be actively involved in restructuring as it looks for ways to reduce costs and operating leverage at a time when demand is so low. Investors are likely to be bracing themselves for more uncertain forecasts by management, however they may be quietly optimistic with the global progress being made on vaccine roll-outs.

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.

 
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