FTSE 350 Look Ahead: Ashtead, Whitbread, Boohoo And More

Look ahead to FTSE 350, other companies reporting & economic events from 13 – 17 June 2022

Q1 2022 hedge fund letters, conferences and more

Ashtead, Q4 Results, Tuesday 14 June

Laura Hoy, Equity Analyst

“When we last heard from Ashtead, management had increased guidance to reflect what’s been a bumper year. Revenue growth‘s expected to be upwards of 20% as the group’s benefitted from a post pandemic surge in construction. More importantly in our view will be cash flow. The group guided for free cash flow of around $1.0bn, which would be a testament to the group’s efforts to improve margins with improved efficiency. Moving into the new financial year, we’d expect some of that efficiency to fall away as higher activity levels mean the group has to spend more on new equipment—so we’ll have an eye on management’s forward looking statements for an idea of just how much is on the table. Capital expenditure has been ticking upward, a necessary lever to drive growth, but there’ll be a balance to strike.

The other story to watch is demand expectations for the upcoming year. Rising inflation has benefitted the group up to this point, but with a potential recession on the cards, we could see construction spend start to taper. We’d like management’s take on how the current environment is affecting forecasts to know whether persistent inflation is still a tailwind.”

Whitbread, Q1 Trading Statement, Wednesday 15 June__

__

Matt Britzman, Equity Analyst

“Premier Inn owner, Whitbread, saw its recovery push on back in April when profits returned, and the outlook started to look brighter. In the UK we’ll be hoping trends seen in the second half of the prior year continue, where total sales exceeded pre-pandemic levels. Occupancy in the first portion of Q1 was seen at 81%, which would be a positive step following a tough period last Christmas when Omicron hit. We’ll be hoping that number remains flat or higher.

Inflation and supply chain disruption are industry wide challenges and we’ll be keeping a close eye out for commentary on their impact. Cost inflation’s expected at around 8-9%, which puts pressure on the group to deliver more of the £140m in cost saving planned by FY25. With £40m saved last year, we’ll be hoping to hear another chunk is coming sooner rather than later.”

Boohoo, Trading Statement, Wednesday 15 June

__Susannah Streeter, Senior Investment and Markets Analyst
__
‘’Boohoo’s challenges have come thick and fast with supply chain issues really weighing on its performance, so investors will be keeping a close watch in this update on whether there is an end in sight to the higher shipping costs and longer delivery times, which have hit profits. The overall rebound in retail clothing sales as people prepare for parties, weddings and holidays clearly shows there is appetite for Boohoo’s fashion savvy products, but it is meeting that demand which has become increasingly difficult. Investors will be keen for an update on whether these supply chain issues easing, because if the company doesn’t get ship shape quickly there is a risk impatient customers will migrate to rival brands.

Returns rates will also be a metric to watch as the number of customers sending back unsuitable garments has begun to creep up again, after previously dipping, as easy fit loungewear saw shoppers hang onto more purchases during the pandemic. The group is targeting revenue growth in the low-single digits and an underlying cash profit margin between 4-7%, investors will want to see that this is still on track, and any undershooting could see the share price punished again.’’

Tesco, Q1 Trading Statement, Friday 17 June__

__

Matt Britzman, Equity Analyst

“Next week’s trading statement should shed some light on whether the cost-of-living crisis is impacting consumer spending. Shopper confidence fell sharply through the start of April and the energy price cap hike suggests wallets have felt the pinch since then. Commentary on the outlook from management will be a key indicator to how this is playing out.

Tesco’s commitment to focusing on pricing should hold it in good stead if consumers shift down the value chain but that comes at a cost. Inflation was called out as a challenge in the full-year results just gone, albeit one that was being mitigated with improved efficiencies. We’ll be looking out for any commentary on whether the group can keep prices low, mitigate inflation and keep margins intact.”

Halfords, Full Year Results, Friday 17 June__

__

Susannah Streeter, Senior Investment and Markets Analyst

‘’With bikes sales already showing signs of shifting down a few gears, investors will want to see signs of motoring sales at Halfords continue to peddle more quickly. The pandemic cycling boom appears to be fading fast, as people have had less time for the great outdoors. This trend is likely to continue as people appear to have been ring-fencing budgets to spend time on longed for foreign shores rather than domestic hills.

Autocentres did get a seasonal boost with MOT numbers particularly brisk at the last count, due to a shift in timings due to a deferral programme in 2021 so on the face of it motoring sales may disappoint. But fundamentally they do appear to be heading in the right direction, particularly in The Mobile Servicing business, where technicians come straight to your door, which continues to look promising. Investors will want to see the upward march in like for like sales continuing here as it’s an area for future growth, and when combined with Autocentres offers good potential for cross selling.’’

13-Jun

14-Jun

15-Jun

16-Jun

17-Jun

*Events on which we will be updating investors

__About Hargreaves Lansdown
__

Over 1.7 million clients trust us with £132.3 billion (as at 30 April 2022), making us the UK’s number one platform for private investors. More than 98% of client activity is done through our digital channels and over 600,000 access our mobile app each month.

Updated on