Our regular look at the FTSE 350 and a selection of other companies reporting from 10-14 October 2022.
- Box LVMH block the headwinds facing the retail sector
- East Easyjetcapacity back to pre-covid levels?
- How are Entain’s revenue from sports and games?
LVMH, Q3 Trading Statement, Tuesday October 11
Laura Hoy, equity analyst, “Sales will be front and center as LVMH presents a progress report as investors look to high-end retailers for safety in the face of rising prices. Inflation drives up the cost of high-end bags , but wealthy customers who buy them probably won’t notice much. However, this insulation is not bulletproof. LVMH is largely exposed to the violent swings we have seen recently in the foreign exchange markets, more than “one-third of business from Asia and another quarter from the U.S. Additionally, the travel industry the group relies on hasn’t fully recovered since the pandemic. With fears recession that weighs heavily, we may not see a full recovery for some time. The group is expected to post double-digit revenue growth this year, and it would be good to have confirmation. ion that it is on track to achieve this forecast.
Debt is another area worth watching. Last year, the group’s net debt amounted to more than 12 billion euros following the acquisition of the American jeweler Tiffany’s. Debt reduction has been identified as a priority, so it will be interesting to see if this figure can be significantly reduced by the end of the year to avoid the spiraling cost of servicing debt in the current environment. .
LVMH has seen its valuation drop considerably this year, but it is still at the high end of the sector. This means that the group will have to impress if they are to overcome market concerns.“
Easyjet, Full Year Trading Statement, Thursday October 13
Derren Nathan, Equity Analyst, “Easyjet will issue a full-year business update next week. The final quarter of the year includes the critical summer vacation season, which is a key reason for the airline’s weighting low prices in the second half In the last reported pre-pandemic year (2019), Easyjet generated 634% of its £6.4 billion in sales in the second half of the financial year.
Easyjet previously forecast capacity for the quarter to increase to 90% of pre-pandemic levels from the 87% seen in the third quarter. It will be revealed whether the expected improvements in load factor have materialized, and it would be good to see indications for bookings in this new financial year. With consumer confidence waning, people will be looking for evidence as to whether term bookings are starting to suffer and people are starting to withdraw extras such as food, baggage allowances and extra legroom. This is a very profitable revenue line, which has seen tremendous growth since the easing of travel restrictions.
Further indications on costs will be awaited. For the fourth quarter, Easyjet had locked in about 83% of its fuel needs at a price of $705 per metric ton, about 28% below today’s rate. It will be interesting to see if there are any changes to the 2023 hedge position, previously guided around 60% at a price of $784 per tonne for the first six months. »
Entain, Q3 Trading Statement, Thursday 13 October
Charlie Williams, Equity Research Assistant, “Entain’s online and in-store presence around the world has served them well during the lockdown as customers have returned online, offsetting a drop in retail store revenue. The trend is reversing somewhat now, but online revenues remain above pre-pandemic levels and the broader customer base appears to be more engaged. Although another wave of revenue growth is expected next week, the odds could start to stack against them as a cost of living crisis and a challenging macro backdrop weigh on online demand.
The group continued its wave of mergers and acquisitions (M&A) after recently announcing the acquisition of SuperSport, the fifth this year. This should allow for expansion into the fragmented markets of Central and Eastern Europe, where Entain can lead abreast, but success depends on their ability to integrate the business. With many moving parts in different regions, any updates on progress will be welcome.
The group is also under scrutiny for its anti-money laundering (AML) practices. A series of fines from the UK, the most recent of £17m, have scratched their reputation, and UK gambling law still hangs over their shoulders after suggestions it could be scrapped.
This article has been brought to you in collaboration with Hargreaves Lansdown. All opinions expressed in this article are from analysts and do not necessarily represent the opinions of The Armchair Trader.
FTSE100, FTSE250 and other selected companies to declare
|Sirius Real Estate||Half-year results|
|Dechra Pharmaceuticals||Trading statement|
|LVMH||Third Quarter Trading Statement|
|Power XP||Third Quarter Trading Statement|
|Barratt Developments||Trading statement|
|Page group||Third Quarter Trading Statement|
|QinetiQ Group||Q2 Trading Statement|
|Easyjet||Full Year Trading Statement|
|hear||Third Quarter Trading Statement|
|Hay||Q1 Trading Statement|
|Ashmore Group||AUM Q1 Trading Statement|
|Jupiter Fund Management||Third Quarter Trading Statement|
|Monday||Third Quarter Trading Statement|