Weekly Roundup - week ending 23/05/2014
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There was more news flow on the earnings front this week, with a handful of notable companies taking centre stage. Babcock was among the list of companies to have kicked things off on Monday (19th May).
This week also saw companies including Britvic, Marks & Spencer (M&S), Vodafone, Hewlett-Packard, Mothercare and Royal Mail, all feature on the earnings stage.
Shares of Royal Mail took something of a beating yesterday following the release its full year results.
For its year ended 30th March, Royal Mail took revenue of around £9.5bn, up from some £9.2bn reported in the same period last year. Operating profit (before transformation costs) was £671m, marking a 12% increase over the prior year.
Royal Mail’s CEO warned of intense competition in parcel delivery. That’s in addition to competition from TNT Post UK on the letters side, which threatens its Universal Service (its six-days-a-week delivery service throughout the UK) and its targeted profit margin range.
Yesterday also saw Hewlett-Packard (HP) release its second quarter results.
HP took revenue of around $27bn in the period, down 1% from the previous year (on a constant currency basis). Net profit came in at some $1.3bn, up from the $1.1bn posted the prior year.
HP, which embarked on a restructuring plan in 2012, had previously estimated that 34,000 jobs would be eliminated. The company, however, now expects that figure to increase by between 11,000 and 16,000.
For fiscal 2014, the company, which said that its turnaround remains on track, forecasts earnings per share (EPS) range of $3.63 and $3.75.
The market cheered for Britvic, after its update on Wednesday (21st May).
The company took revenue of £671m for the twenty eight weeks ended 13th April, up from the £639m reported in the same period last year. Pre-tax profit came in at some £45m, representing around a 21% increase over the prior year.
Britvic now boasts nationwide availability of its Fruit Shoot drinks in the US, and, says its plan to launch Fruit Shoot in India later this year is on track.
Tuesday saw Vodafone’s shares drop following the release of its results for the year.
For its full year ended 31st March, Vodafone reported group revenue of some £44bn, representing a 1.9% decline year-on-year. EBITDA came in at around £12.8bn, down from last year’s £13.6bn.
Conditions in Europe remain a challenge and the company to take another impairment charge: this time it was a £6.6bn impairment charge on its operations in Germany, Spain, Portugal, Czech Republic and Romania.
Looking ahead, Vodafone forecasts EBITDA for fiscal 2015 to be in the range of £11.4bn and £11.9bn.
Also on Tuesday, M&S released its full year results.
For the year, total UK sales were up 2.3%, with like-for-like UK sales up 0.2% in the period. By business, like-for-like general merchandise sales were down 1.4%, though overall sales were flat versus last year.
The company made an underlying pre-tax profit of £623m, marking a 3.9% decline over the prior year.
M&S expects its new website to “settle” in about four to six months, and that would impact general merchandise performance in the first quarter.
On Monday, UK engineering services group, Babcock, reported its full year results.
Underlying revenue at around £3.5bn, marking a 9% rise over the same period last year. Underlying pre-tax profit was £316m - representing a 15% year-on-year increase.
Babcock expects to continue making strong progress in the 2014/15 fiscal year.
On the economics news front, UK inflation rose 1.8% in April. Meanwhile, UK retail sales rose strongly in April: 1.3% month-on-month and a notable 6.9% compared to last year.
Yesterday saw the release of the second estimates for first quarter UK GDP, which saw the figure unchanged at 0.8%.