Weekly outlook: British Associated Foods and Moonpig report

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23 June 2023

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Monday 26 June

First-half results from Carnival
German Ifo business climate survey
Associated British Foods Q3 results

On Monday, Associated British Foods will unveil their trading update for the third quarter. Shares in the owner of Primark, Twinings and British Sugar are up by a sixth over the last year following a 55% leap from autumn lows.

AJ Bell’s Russ Mould and Danni Hewson said: “The shares rally has been fuelled by a rally in the pound, a drop in oil and gas prices (to the potential benefit of consumer spending) and a marked fall in sea freight costs, while there have been no more profit warnings either, after the one dished out last September which drove the shares to a five-year low.

“The ongoing £500m share buyback may also be helping, and April’s first-half results were encouraging, as Primark performed more strongly than expected and the food operations proved resilient.

“Overall, first-half pre-tax earnings were flat and earnings per share down 3% on an adjusted basis year-on-year, and management nudged up the interim dividend. Chair Michael McLintock and chief executive George Weston left guidance unchanged, and that outlook statement will be important when it comes to how analysts and investors judge this latest update.”

In Asia, quarterly results from L’Occitane

Tuesday 27 June

Full-year results from CML Microsystems and CakeBox
Trading statement from Petrofac
Japanese inflation figures
US durable goods orders
US new homes sales
US Case-Shiller house price index
US Conference Board consumer confidence index
In Europe, quarterly results from Prosus
In South Africa, quarterly results from Naspers
In the US, quarterly results from Walgreens Boots Alliance

Wednesday 28 June

Full-year results from Marlowe
First-half results from Wynnstay
US bank stress tests results
US oil inventories
In the US, quarterly results from Micron, General Mills and BlackBerry

Thursday 29 June

Full-year results from De La Rue
Moonpig full-year results

Online gifting platform Moonpig will publish its full-year results on Thursday. The firm’s shares are currently 60% below their offering price in February 2021, and it has fallen out of the FTSE 250.

Mould and Hewson said the decline is largely down to four factors, including an end to lockdowns and the reopening of brick-and-mortar competition, worries over consumer confidence and retail spending given inflation and increases in the cost of living, the impact of postal strikes, and ultimately the firm’s valuation.

They said: “[Moonpig’s valuation] reflected a lot of enthusiasm for online shopping plays as they boomed during lockdowns and left little downside protection in the event of anything unexpected happening – rising interest rates are not usually good news for the valuation of growth stocks and this is proving the case again (right now, Moonpig trades on around 25 times earnings for the year just finished – still representing a big premium to the wider UK stock market).”

Susannah Streeter, Hargreaves Lansdown’s head of money and markets, added: “The company clearly comes into its own around key calendar events when people will pay a higher price for personalised wishes. However, for meaningful year-round revenue growth, it’ll have to work harder, as sales appear to be concentrated in the winter and the spring when there are more events to celebrate with a card, and potentially an add-on gift. The company has flagged that it’s mindful of the macro-economic environment, and so investors will be watching closely for future guidance, especially with the spending power of households set to be reduced further by the ramping up of interest rates.”