Weekly Outlook: Vodafone and Burberry full-year results

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12 May 2024

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Monday 13 May

First-half results from Diploma, Victrex and Cerillion
German wholesale price inflation
In Japan, quarterly results from Softbank, Suzuki Motor, Suntory and Bridgestone
In Asia, quarterly results from Tencent Music
In Europe, quarterly results from Ferrovial and Hochtief

Tuesday 14 May

Full-year results from DCC
First-half results from Treatt and On The Beach
Trading statements from Flutter Entertainment, Greggs, Virgin Money UK and Currys
UK unemployment, job vacancies and wage growth
German ZEW economic sentiment survey
US NFIB smaller companies survey
US producer price inflation
In Japan, quarterly results from Sony, Asahi, Rakuten, Dentsu and Samsonite
In Asia, quarterly results from Tencent, Alibaba and Hon Hai Precision
Europe, quarterly results from Bayer and Rheinmetall
In the US, quarterly results from Home Depot, Nu, Sea and Seadrill

Vodafone will release its full-year results on 14 May, currently ranking 92nd in the FTSE 100 and with a share price that has dropped by over half in the past five years.

The declining share price is chalked up to a number of factors, including increased competition, stringent regulation, an indebted balance sheet and dividend cuts, according to Russ Mould, AJ Bell investment director, Danni Hewson, AJ Bell head of financial analysis, and Dan Coatsworth, AJ Bell investment analyst.

“If there is any good news here, it is that the share price seems to be stabilising, albeit at very low levels, and this may be down to the restructuring plan initiated by chief executive Margherita Della Valle,” the AJ Bell team said.

Since Della Valle began in the role, she has attempted to merge the UK assets with Three, and sell its Italian and Spanish businesses.

“Such dramatic surgery is a welcome admission that the firm is (or was) fighting on too many fronts in too many markets, especially given its net debt position,” Mould, Hewson, and Coatsworth said.

“The cash inflows will reduce borrowing, which is welcome, although the disposals mean the full-year results will be trickier to read than normal. Vodafone habitually used underlying, adjusted, non-statutory financial metrics as its benchmarks for financial performance and it will also report Spain and Italy as discontinued operations, so comparisons with the past and forward guidance will not be easy either.”

Headline numbers for the full-year results will be adjusted free cash flow and adjusted earnings before interest, taxes, depreciation, amortisation and lease costs (EBITDAaL). The latter is expected to reach around €13bn, a drop from last year’s €14.7bn. Adjusted free cash flow is also expected by analysts to fall from €5.3bn in last year’s results to €3.1bn for this year.

Wednesday 15 May

Full-year results from Compass, Experian and Vertu Motors
First-half results from Imperial Brands and Britvic
Trading updates and quarterly results from Spirax-Sarco and Keller
US consumer price inflation
US retail sales
US NAHB housebuilding industry survey
US oil inventories
In Asia, quarterly results from JD, Singapore Airlines and Grab
Europe, quarterly results from Allianz, E.ON, Hapag-Lloyd, RWE, Commerzbank, ABN Amro, Ageas, Telecom Italia, TUI, ThyssenKrupp, Ubisoft and Tod’s
In the US, quarterly results from Cisco

Burberry will release its full-year results on Wednesday after shares dropped over 50% over the year.

“A weak recovery in the important Chinese market and broader concerns over luxury goods demand and so-called premiumisation strategies (and perhaps whether companies are starting to accidentally price the more aspirational customer out of the market) have a big role to play,” Mould, Hewson, and Coatsworth said.

“Those worries crystallised in a disappointing outlook statement alongside November’s interim results and then a full-blown profit warning alongside January’s third-quarter and Christmas trading update.”

Following the warning, analysts anticipate a 13% year-on-year decline of retail sales and an adjusted operating profit £405bn. Total sales are expected near £2.9bn.

“Analysts and investors will also look to compare momentum in the third quarter compared to that shown earlier in the year,” the AJ Bell team said.

“In the second quarter, comparable store sales rose 10% year-on-year in Europe, the Middle East and Africa, advanced by 2% in Asia and fell 10% in the Americas. Analysts will no doubt also look for a progress report across retail, wholesale and licensing, as well as additional colour on online versus physical sales, pricing and input costs.”

Thursday 16 May

Full-year results from United Utilities and Premier Foods
First-half results from Sage, easyJet, Grainger, Future, Auction Technology and Tritax Eurobox
Trading updates and quarterly results from Convatec, Vistry, Helios Towers, Restore and Vanquis Banking
Japanese GDP growth
US housing starts
US industrial production and capacity utilisation rates
US weekly initial unemployment claims
In Asia, quarterly results from Baidu and Galaxy Entertainment
In Europe, quarterly results from Siemens, Deutsche Telekom, Zurich, Pernod Ricard, Swiss Re, Iliad, Vallourec and Aegon
In the US, quarterly results from Wal-Mart, Applied Materials, Deere, Take-Two Interactive and Under Armour