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FTSE 350 Look Ahead: Saga, CVS, NEXT And More

By Anna Peel. Originally published at ValueWalk.

Saga top holdings of David Abrams

Look ahead to FTSE 350, other companies reporting & economic events from 21 to 25 March

  • We’ll find out if Saga PLC (LON:SAGA)’s end of year losses are in line with expectations
  • Inflation is expected to have heated up again
  • We’ll be looking for updated forecasts from NEXT plc (LON:NXT) given the challenging conditions ahead
  • CVS Group Plc (LON:CVSG) looks to keep capitalising on the boom in pet ownership
  • The mini relief rally for retail sales is expected to continue for February

Q4 2021 hedge fund letters, conferences and more

Saga, Full Year Results, Wednesday 23 March

Sophie Lund-Yates, Equity Analyst

“There are a lot of spinning plates at Saga. The insurance business has been trading in-line with expectations, but we’d like some clarity on the impact of Financial Conduct Authority pricing rule changes, which have the potential to cause pricing volatility. Unsurprisingly, Saga’s travel business has been badly hurt by the pandemic which is partly why the group’s expecting to report a small underlying loss before tax for the full year as it was last reported that Saga’s cruise ships were 68% full. We’d like to see some progress on that front, but with ongoing uncertainty we’re not sure what to expect. The initial results from Saga’s brand relaunch have been positive, and next week should shed some light on how that’s going. Getting customers to engage with a new brand is costly on the marketing front, so there’ll be a focus on the effect on operating margins.”

Consumer Price Inflation – February, ONS, Wednesday 23 March

Susannah Streeter, Senior Investment and Markets Analyst

“The inflation reading for February will be a bit like testing the temperature of a hot bath before a few more kettles of boiling water are poured in. It’s expected that inflation will have heated up again, past the 5.5% recorded for January, but the commodity chaos unleashed by the invasion of Ukraine won’t fully show up. In the weeks to come there will be also be unwelcome bills landing on mats, with higher energy tariffs another unwelcome driver of inflation which is expected to push the headline rate to 8% or more. With inflation marching upwards, the Bank of England will also be expected to keep its tightening on track, with a fresh rate hike expected in May pushing up the cost of borrowing in an attempt to push down demand.”

CVS Group, Half Year Results, Thursday 24 March

Matt Britzman, Equity Analyst

“There have already been some details on performance over the first half from this veterinary group, back in January’s trading statement. Perhaps no surprise, given the spike in pet ownership over lockdowns and subsequent demand for vet services, revenue and cash profits (EBITDA) should come in comfortably up on last year. More recently, the group’s acquisition of Quality Pet Care Ltd (The Vet) has come under scrutiny from the Competition and Markets Authority (CMA). It’s expected that a potential divestment of the entire business will be on the table, which would come at additional costs and wipe off around £11.3m of annual revenue.

More broadly, the group did well in 2021 to employ around 9% more vets than the prior year. It’s vitally important for the group’s success to be able to bring skilled professionals on board as the group grows. It’s been a tricky area in the past, so we’ll be watching closely for commentary on vacancy rates.”

Next, Full Year Results, Thursday 24 March

Laura Hoy, Equity Analyst

Next is in a more precarious position than some of its peers as it braves inflationary headwinds. As the cost of things like fuel and food increases, people have less to spend on new clothes. Next’s prices aren’t quite discount, but they’re not luxury either. This mid-range is a danger zone when customers start to pull back spending, so we’ll have a close eye on full-price sales trends for evidence of a slowdown. They’re expected to grow by 3% in the fourth quarter, bringing the total increase for the year to 7%. That’s thanks in large part to easier comparisons to the 2020 lockdowns. With pent up demand unwound and tougher comparisons ahead, all eyes will be on management to offer a realistic goalpost for the upcoming year.

The group’s been working to build its online offerings, extending its services to other brands. While this looks like the right move, it requires increased spending. At last check the group upped its capital expenditure spend by £55m to £190m. With so much uncertainty ahead, hopefully that will be the last upward revision.”

Retail sales – February, ONS, Friday 25 March

Susannah Streeter, Senior Investment and Markets Analyst

“The mini relief rally following the shock of Covid is expected to continue for the high street in February. Shopping centres and out of town parks are also expected to have benefited with shoppers heading back for mask less retail therapy, as the restrictions were lifted. The trend to update homes is likely to keep fuelling sales in furniture and lighting stores, particularly with new stock on estate agent’s books so low, the urge to make the most of current living arrangements is set to stay linger. The urge to spend seems to have been strong so far this year, and recent data for early March shows that credit and debit card purchases had increased by 10 percentage points from late February. However, at some point lockdown savings will be spent, and the rapid rise in prices on supermarket shelves, energy bills and petrol forecourts, combined with looming tax increases, is highly likely to put a dampener on consumer confidence.”

21-Mar

No Reporting Companies

22-Mar

Carnival* Q1 Trading Update
Kingfisher Full Year Results
Softcat Half Year Results
Diversified Energy Company Full Year Results

23-Mar

Halma Trading Statement
Petrofac* Full Year Results
Saga* Full Year Results

24-Mar

Next* Full Year Results
International Public Partnerships Full Year Results
Bridgepoint Group Full Year Results
CVS Group* Half Year Results

25-Mar

United Utilities Group* Trading Statement
Smiths Group Half Year Results
IMI Full Year Results

Also reporting?

Playtech Full Year Results
John Wood Group Full Year Results
Witan Investment Trust Full Year Results
Temple Bar Investment Trust Full Year Results
Baillie Gifford Japan Trust Full Year Results

*Events on which we will be updating investors


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