The FTSE 350 managed to make a 2pc increase last week, meaning more Telegraph Fantasy Fund Manager portfolios will be in the green compared to last week’s downturn. Luxury car manufacturer Aston Martin Lagonda and silver & gold specialist Hochschild Mining were among the top performers, with online retailer AO World struggling along with Dixons Carphone. This week we will get half year results from Unilever and a quarterly-update from Vodafone.
Unilever first-half results: Thursday 23 July
Despite the relative defensive nature of its business, Unilever’s shares are down year-on-year. This is partly down to a weak end, by Unilever’s high standards at least, to 2019. Back in December the company dished out a mild profit warning, noting that sales for the year would come in below guidance. Underlying revenues ultimately rose 2.9pc year-on-year, below the company’s long-term target range of 3pc to 5pc a year.
Trading was therefore already getting tough – and then came the pandemic. Developed market sales rose 2.8pc as Europe and America saw customers stockpiling goods, but emerging market sales fell 1.8pc, thanks mainly to lockdowns in China and India. Sales rose 2.4pc at home care, as sales of surface cleaners like Domestos surged, but food and refreshment sales sagged 1.7pc, with ice-cream sales particularly hard hit.
Unilever is forecast by analysts to be the tenth biggest dividend payer in the FTSE 100 in cash terms in 2020, so it’s worth keeping an eye on any dividend announcements.
Vodafone first-quarter update: Friday 24 July
Despite the potential benefit of the roll-out of 5G technology, Vodafone’s shares continue to languish, weighed down by debt, concerns over whether the €18.4 billion purchase of Liberty Global’s European cable assets was the right thing to do and the possible costs of acquiring 5G spectrum and equipment.
Shareholders are now also trying to work out whether Vodafone’s business could benefit from Covid-19 or not, either as consumers downloaded more data and media during lockdown or workers remain at home rather than in the office. Chief executive Nick Read flagged both trends alongside May’s full-year results but at the same time he cautioned about a hit to roaming revenue thanks to the collapse in international travel for pleasure or business and the risk that some customers find it harder to pay their bills.
Investors will also be looking for comment on Vodafone’s €42 billion debt pile, which it is looking to tackle through asset disposals and the proposed spin-off of its European tower masts business, as well as management of capital spending through network infrastructure sharing deals for 5G services. An update on progress on the plan to spin off and float its European tower infrastructure arm in 2021 would be welcomed, although Vodafone is currently planning to reveal more financial information alongside November’s half-year results.
OTHER NEWS ITEMS TO WATCH
Monday 20 July
Tuesday 21 July
Wednesday 22 July
Thursday 23 July
First-half results from Croda, RELX and Howden Joinery
Trading statement from Sage
Friday 24 July