Companies reporting w/c 1 February

We give our thoughts on what to expect from companies announcing results week commencing 1 February 2021.

Tuesday

SSE Plc: Q3 2021 Sales & Revenue Release – Trading Statement

The Group is emerging from a difficult period of political and regulatory pressure, higher energy costs and unusual weather, much of which they had little control over. The Group’s future focus will be on renewable energy and electricity transmission, the former being the hoped-for driver of future earnings growth. Any further update on the effects of the virus on operating profit will be worth noting.

BP Plc: Q4 2020 Earnings Release

Oil prices have made a dramatic recovery recently, but still remain some way off the pre-crisis level. The average selling prices for most of 2020 will therefore be dramatically below 2019 levels, hitting big oil profits. BP and Royal Dutch Shell have already made significant asset write-downs, reported huge losses in previous quarters and cut dividends substantially. At the start of the new year, investors will be on the lookout for further rationalisation programmes and indications on the crucial dividend prospects. Given the oil price recovery, combined with a difficult long-term global economic scenario, we may see a mixed outlook for the year from management. Meanwhile, the crisis has brought environmental issues more to the fore, so we should see more commentary on plans to replace fossil fuels with renewables.

Wednesday

Vodafone Group Plc: Q3 2021 Sales and Revenue Release – Trading Update

The current crisis is having mixed results for the business, with fewer travellers meaning the Company is generating less income from roaming charges. However, the demand for its data usage remains high, helped by a steady expansion in emerging markets. In this update, the focus is likely to be on the Group’s M&A activity as it targets some acquisitions. Investors will also expect more news on the IPO of the portfolio of cell towers, Vantage Towers.

GlaxoSmithKline Plc: Q4 2020 Earnings Release

As a major global pharmaceutical company, GSK has been somewhat left in the shadow as rivals have stolen the limelight with their efforts on coronavirus vaccines. GSK’s share price languishes near the pandemic trough as the global lockdowns have kept more patients at home, not visiting their doctors and receiving written prescriptions. Investors only expect a marginal increase in revenues, while the Company previously guided that adjusted earnings per share would slide by 1-4%. That said, we can expect a good dividend yield along with the prospect of a good drugs pipeline going forward.

Thursday

Barratt Developments Plc: Q2 2021 Earnings Release

It’s only a few weeks since Barratts published a trading statement, so there shouldn’t be too many surprises for investors in these interim figures. The main focus will be on whether the Company confirms an interim dividend as it suggested previously. The housing market has been remarkably resilient during the pandemic, and the steady demand for new houses was confirmed by Barratts when it revealed record sales figures in the first half. However, the big question for the market is how the sector will perform later in the year, after the stamp duty holiday ends and unemployment rises.

Compass Group Plc: Q1 2021 Sales and Revenue Release – Trading Update

In recent weeks, Compass has come under media scrutiny for the actions of a subsidiary, Chartwell’s, in sending out sub-standard food parcels to some of the UK's most disadvantaged children. This is not likely to bode well for investors, particularly in such a difficult time. In the Group's latest update back in November, they released figures that were broadly in line with expectations whilst maintaining solid cash flow. Investors will be interested in seeing how the Company's cash management is faring, as a means of assessing whether or not they may be facing difficult times ahead.

Severn Trent Plc: Q3 2021 Sales and Revenue Release – Trading Update

Severn Trent is mainly focused on water and supply services to households and businesses in Wales and the Midlands. The share price has been trending sideways since last April, with investors’ focus remaining on the dividend, along with the potential for bad debts to increase as a result of the virus.

Unilever Plc: Q4 2020 Earnings Release

Unilever has performed relatively well during the pandemic so far, thanks to its well-known hygiene and grocery brands, which have remained in strong demand as people isolate at home and prepare more of their own meals. The Company has recently outlined plans to increase its meat and dairy substitute sales to €1bn per year in 5-7 years, following a trend seen in other parts of the food production sector. Responding to the growing interest in ESG investing, the Company has also announced a number of targets including one to achieve zero emissions from its operations by 2030, and will lay out a climate transition action plan to investors ahead of its AGM in May. The shares have responded to all of this by outperforming the market over the past year.

BT Group Plc: Q3 2021 Sales and Revenue Release – Trading Statement

BT cheered the market with its last trading update in October as it beat expectations on earnings despite a clear impact from the pandemic on its operations, especially BT Sport. Sales in the second quarter dropped 7.3%, but the Company raised its guidance on future earnings and reported progress with the rollout of full-fibre broadband and 5G services across the country. CEO Philip Jansen has a busy year ahead of him and has started by restructuring BT’s digital businesses in order to boost its growth in a key area. He’s also indicated a willingness to sell a stake in the Openreach infrastructure division and says dividends should resume next year.

Royal Dutch Shell Plc: Q4 2020 Earnings Release

Despite a recent recovery in oil prices, they remain some way off the pre-crisis level, forcing average selling prices during 2020 dramatically down in comparison with 2019. Like its peers, Royal Dutch Shell has already made significant asset write-downs, reported huge losses in previous quarters and a cut its dividend by two thirds. At the start of the new year, investors will be on the lookout for further rationalisation programmes and indications on the crucial dividend prospects. Given the oil price recovery and long-term global economic challenges, we may see a mixed outlook for the year from management. Meanwhile, the crisis has brought environmental issues more to the fore so we should see more commentary on plans to replace fossil fuels with renewables. A step in the right direction is the recent acquisition of Ubitricity, a leading provider of on-street charging for electric vehicles in Europe, on which investors will expect further commentary.

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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