Tuesday’s selection of financial titbits for investors will include FTSE 100 groups CRH and Compass, along with mid-cap pair Cranswick and Pets at Home.
Compass Group (LSE:CPG) has already given a heavy steer over how its final numbers will look, so the interest in its full-year results will be the state of the recovery in the contract catering markets going into 2022.
The catering group’s corporate segment has been the laggard in 2021 and with Covid-19 proving to be a stubborn opponent, there yet might be more delays to a full recovery here.
Cost inflation in the food sector and staff shortages will also be keenly felt by Compass and how it is dealing with these will be something else to watch.
The group has already indicated revenue in the fourth quarter to 30 September was around 86% of 2019 levels, slightly ahead of guidance of 80-85% and for the full year should be around 76% of 2019.
Fourth quarter operating margins also recovered to 5.5% to 6% and will be around 4.4% in the full year, it said, which investors will want confirmed while some progress on reducing debt will also be welcome say analysts.
Cranswick and Devro on the menu
Also on Tuesday, half-year results from foods producer Cranswick PLC (LSE:CWK) should reveal how much effect the gradual return of workers to offices is having on the food-to-go channel.
When last we heard from Cranswick, in July, it said it had made a positive start to the new financial year as revenue from this channel continued to fatten up.
Sales in the 13 weeks to 26 June were 9.6% ahead of the same period last year, with corresponding volumes up 7.7% reflecting strong retail demand and increased sales from its Eye poultry facility.
Peel Hunt expects strong volume growth over the half-year period and is forecasting profits to be up by 10% to around GBP67mln.
“The company has seen supply chain challenges (e.g. labour shortages), but has generally been able to maintain service levels, which has helped win additional business (e.g. poultry with Morrisons),” the broker said.
“The supply chain issues will mean that retailers will look closely at their supply chain to understand resilience and capability,” Peel Hunt said.
The meat theme continues with Devro PLC (LSE:DVO) – “making great sausages possible across the globe” – on the same day, with the broker expecting “positive commentary” to have continued for Devro but price increases are likely to be on the table.
CRH PLC (LSE:CRH)‘s trading statement on Tuesday, covering the first nine months of 2021, comes relatively soon after the group’s future prospects for its main market of the USA were bolstered by President Biden’s new US$1trn infrastructure package.
The building materials giant said back in August that it expected the second half of the year to see profits rise year-on-year, if the weather behaves, which by and large it has done.
UBS expects the group to record 2% like-for-like sales growth for the third quarter, driven by a 2% rise in Europe materials, a 2% increase in Americas materials and a 4% hike in building products.
As CRH usually gives guidance for full-year underlying earnings (EBITDA) the analysts said they currently forecast US$5.2bn for 2021, while the City consensus is at US$5.16bn.
Making a splash
Half-year results from water company Severn Trent PLC (LSE:SVT) will come just days after the Environment Agency and Ofwat launched an investigation into the water industry’s illegal releases of untreated waste into rivers.
For SVT, which announces its results a day before sector peer United Utilities Group PLC and a week before Pennon Group PLC (LSE:PNN, OTC:PEGRY), the main focus in the City, however, will probably be on how its financial numbers are recovering.
“Post-pandemic life should be a good thing for United Utilities. Businesses reopening should boost consumption, but some of the added household demand should also stick around as working from home continues,” said analyst Laura Hoy at Hargreaves Lansdown.
“At the half-year results we’ll get some idea of how the two are balancing out and whether the group can expect elevated overall demand from here on out.”
She also said debt will be a key theme for the sector as it is required to pay for necessary infrastructure investments (which maybe will be increased if the system needs to be improved to clean up the country’s rivers): “As long as profit growth is also on the up this isn’t overly concerning, but it’s something to keep an eye on, particularly if inflationary pressure was stronger than anticipated.”
Significant announcements expected on Tuesday 23 November
Interims: AO World PLC (LSE:AO.) (AO World PLC (LSE:AO.)), Caledonia Investments (LSE:CLDN) (Caledonia Investments (LSE:CLDN)) Plc, Pets at Home Group, Severn Trent PLC (Severn Trent PLC (LSE:SVT)), Telecom Plus (LSE:TEP) (Telecom Plus (LSE:TEP)) PLC
Economic announcements: Manufacturing PMI (UK), Services PMI (UK), BoE’s Haskel Speech (UK)