The Week Ahead: Barratt, Dunelm, Dixons, Halfords

Expect a slight uptick in results reporting, including numbers from both high-flyers and strugglers.

Paper and packaging giant DS Smith (LSE:SMDS) reports numbers on Tuesday, but it's a rush of results on Wednesday that catches the eye.

Barratt Developments (LSE:BDEV) has been the best-performing housebuilder since the post-EU referendum nadir by quite some distance. The share price has doubled from around 330p in the dark days of June 2016 to 630p currently, although it has been higher. It's up over 40% since Christmas too.

While the housing market has come off the boil as Brexit and economic slowdown create uncertainty, there is still plenty of activity, and recent updates ahead of these full-year results have been positive. 

In July, Barratt made good on its promise to improve margins – operating margin rose 120 basis points to 18.9%, or by 70 basis points on an underlying basis. That triggered upgrades to margin forecasts, with analyst now looking for 19% in the current full-year and 19.5% in 2021.

Now trading at a big premium to peers, Barratt still yields around 8%. Meanwhile, analysts at UBS admit there could be further upside beyond its 650p price target, if its assumptions for a decline in land creditor adjusted return on capital employed (ROCE) to 17% over the long term is too bearish.

Dunelm (LSE:DNLM) is another star performer, up 60% in 2019 so far. An update ahead of these final results flagged a better-than-expected increase in fourth-quarter like-for-like sales, and we're told to expect pre-tax profit at the top end of expectations for between £124 million and £126 million.

Highly cash generative, Dunelm is expected to resume special dividend payments, perhaps in full-year 2021, although some believe it could come sooner.

Life has not been so great for high-profile household names Halfords (LSE:HFD) and Dixons Carphone (LSE:DC.). 

The former issues a trading update for the past 20 weeks, but investors will not have forgotten January's profits warning after a grim Christmas, and Halfords, like other bricks and mortar retailers, faces stiff competition from online rivals.

Dixons Carphone, which reports first-quarter numbers on Thursday, is also in basement territory, and there are plenty out there who think the shares are a bargain. Watch upcoming first-quarter results to see if optimism is justified. 

But results day could be volatile for Dixons shares, given opinion is divided over whether the company can achieve guidance and also quite how to value the shares – the business is a mix of a profitable UK electricals operation and loss-making mobile phones division.

UBS thinks the shares are worth 200p, and others are equally bullish. However, while there is a fair argument for backing Dixons long-term, the short-term prognosis is not great, and there is room for further volatility at current levels. 

Monday 2 September

Trading Statements

Centralnic, Globaltrans Investment, Dechra Pharmaceuticals

AGM/EGM

Defenx, Redcentric

Tuesday 3 September

Trading Statements

Smith (DS), IQE, India Capital Growth Fund, Malin Corporation, Johnson Service Group, Michelmersh Brick, Wentworth Resources, STV, Restaurant Group, Hydrogen Group, Impact Healthcare Reit, Highland Gold Mining, Dalata Hotel Group, Frenkel Topping, Mattioli Woods, Supermarket Income Reit

AGM/EGM

Zanaga Iron Ore Company, Smith (DS), Marwyn Value Investors, Severfield

Wednesday 4 September

Trading Statements

Halfords, Barratt Developments, BioPharma Credit, Just Group, Oxford BioMedica, Frontier Developments, Dunelm

AGM/EGM

Quiz, Vordere

Thursday 5 September

Stocks going ex-dividend on Thursday include Aviva, Glencore, Land Securities, Dixons Carphone, Robert Walters and Micro Focus International

Trading statements

Dixons Carphone, PPHE Hotel Group, Curtis Banks, McBride, Mpac, EnQuest, Gem Diamonds, Beeks Financial Cloud Group, Go-Ahead, Alumasc, Genus

AGM/EGM

Myanmar Strategic Holdings, Carpetright 

Friday 6 September

Trading statements

Berkeley Group Holdings, SIG, International Public Partnership, Ashmore Group

AGM/EGM

Greene King