FTSE 350 Look Ahead: ATVI, GOLD, BOO, NXT And More

Look ahead to FTSE 350 companies reporting from 3 to 7 May

Q1 2021 hedge fund letters, conferences and more

Activision Blizzard, Q1 Results, Tuesday 4 May

Nicholas Hyett, Equity Analyst

“Another quarter of social restrictions in many markets should be good news for game publishers like Activision Blizzard. Guidance is for a 12.7% year-on-year increase in the first quarter revenues. However, there’s potential to beat that given strong performances last quarter following the launch of Call of Duty: Black Ops Cold War in November and ongoing momentum in World of Warcraft. That would result in even stronger growth in earnings per share, given that large proportion of additional sales should fall straight through to profits. However, year-on-year growth is going to get tougher as time goes on. Total sales rose 24.6% in 2020 in what were essentially goldilocks conditions for the group – everything just right. It could prove difficult to replicate that in 2021.”

Barrick Gold, Q1 Trading Statement, Tuesday 4 May

William Ryder, Equity Analyst

“Barrick’s first quarter production report told us the group sold 1.09m ounces of gold for an average price of $1,794 per ounce. Production was in line with plans and remains on track to meet 2021 guidance. Having said that production was lower than in Q4 2020, meaning costs will be averaged over a smaller output. As a result all in sustaining costs per ounce for gold are expected to be 8-10% higher than last quarter. By comparison copper all in sustaining costs per pound are expected to be 6-8% lower than in Q4 2020 thanks to increased sales. Together, sales, average prices and costs tell us how profitable Barrick is likely to be, but we’ll also be looking at commentary on cash flow, capital spending and the specifics of some of the larger mines. In particular, Barrick has recently come to a preliminary agreement with the Government of Papua New Guinea about getting the Porgera mine back up and running, so full year guidance may be updated – although perhaps not in time for next week.”

boohoo, Full Year Results, Wednesday 5 May

Susannah Streeter, senior investment and markets analyst

‘’It’s been boom time for boohoo through the pandemic, as shoppers switched from physical to virtual shopping baskets, lured by the e-retailer’s cheap prices. boohoo’s nimble supply chain has allowed it update its ranges in rapid time when tastes changed from going out attire to staying in styles. But its fast fashion strategy saw the group make headlines for all the wrong reasons, after a supply chain scandal erupted over working conditions at its Leicester factories. Although customers have largely shrugged off the crisis, the company has tried to show its putting corporate governance front and centre, trying to improve its ethical credentials. We’ll be keeping a keen eye out for any further updates about its supply chain review. We’d expect sales to have continued their strong trajectory with lockdown 3 forcing high street rivals like Primark out of the game, but the outlook with reopening on the cards may shake things up a little. boohoo also faces the challenge of integrating Arcadia’s remnants and Debenham’s business into its online only strategy. It aims to be a global fashion marketplace with this expansion, but improving its reputation might be key to winning business in new markets.’’

Next, Q1 Trading Statement, Thursday 6 May

Steve Clayton, Manager of HL Select funds

“NEXT plc's online strengths have seen it beat expectations time after time through the pandemic. Can it repeat the trick once more, now that it is competing against a reopened High Street? Investors will be looking to see how much trade has been pulled back into the group's stores and away from the online operations. One things for sure though, pretty much every retailer on the High Street would like to be positioned where NEXT is.”

Trainline, Full Year Results, Thursday 6 May

Susannah Streeter, senior investment and markets analyst

‘’It’s been a rollercoaster year for Trainline as stay at home orders saw ticket sales via its app and website drop through the floor. Although shares have staged a recovery since the vaccine breakthroughs, fresh lockdowns are likely to have led to yet more red signals on the sales line. At the end of February consumer net ticket sales were less than a quarter of the level they were pre-pandemic. Founder Clare Gilmartin is no longer in the driving seat as CEO, replaced by the chief operating officer, Jody Ford in February. He is likely to have a tough time navigating the track ahead, given demand for rail journeys is likely to stay depressed, as a hybrid working approach is being adopted by many businesses, with commuting time slashed and more days spent working from home. In January Trainline launched a £150 million five year convertible bond to increase its financial buffers, allowing holders to convert their bonds into shares at a fixed price. While this would have given the firm some much needed breathing space, while the economy recovers, the direction of travel is far from clear for the company.’’

InterContinental Hotels Group, Q1 Trading Statement, Friday 7 May

Laura Hoy, Equity Analyst

“Intercontinental Hotels Group has been one of the few hospitality businesses to report underlying profits throughout the pandemic—a feat which can be largely attributed to its franchise structure.

Not much will have changed since the last update. Travel restrictions are still in place across most of the group’s major markets, though an uptick in domestic US travel may have boosted results for that segment. Bookings for the Holiday Inn brand, in particular, will be a good indicator of whether leisure travellers are starting to venture out once again. Growth in China is all but inevitable—this marks more than a year since the pandemic shut things down completely, which should make this year’s numbers look particularly rosy. Add to that the fact that IHG has been expanding its footprint there, and we’re likely to have strong year-on-year growth in that segment. Investors have been confident in IHG’s ability to bounce back and this has been reflected in the valuation. To justify that optimism, IHG will need to show that it’s on-track to meet expectations. Analysts see revenue coming in around 53.9% of 2019 levels at the half-year in June and investors will want confirmation that’s still possible.”

IAG, Q1 Trading Statement, Friday 7 May

Susannah Streeter, senior investment and markets analyst

‘’The share price of IAG lifted on hopes that a big rescue could now be on the cards for the summer season, with the introduction of vaccine passports. Europe wants to welcome inoculated Americans and the resumption of transatlantic travel would be welcome respite for the owner of British Airways and Iberia after the worst year in its history. It’s strategy has been to hoard cash and hold on tight for recovery to take off, by securing new funding and slashing costs. But it desperately needs governments to relax restrictions. The introduction of vaccine passports though won’t come without its problems, not least concerns the move could be discriminatory and already its sparking fierce political debate in some countries. But there is also a creeping fear that the Covid crisis in India could derail progress with worries that if new mutations emerge it could weaken the effectiveness of vaccines, and derail the travel sector’s recovery. Whatever happens, IAG will be flying out of this crisis with the extra baggage of a huge debt pile which could slow its performance well into the future.’’

FTSE 350 & other companies reporting next week

*Companies on which we will be writing research

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