FTSE 350 Look Ahead: Moonpig, Imperial Brands, Entain, and More

By Anna Peel

Look ahead to FTSE 350, other companies reporting & economic events from 4 to 8 April

• We’ll see what rising inflation means for demand at Moonpig Group PLC
• Entain PLC should shed light on how much online demand is shifting back to in-store
• Imperial Brands PLC hopes to find success with next-generation product trials

[Staff note: The FTSE 350 Index is a market-cap-weighted stock market index made up of the London Stock Exchange constituents of the FTSE 100 and FTSE 250 indexes.]

Moonpig Group, Trading Statement, Tuesday 5 April

Sophie Lund-Yates, Equity Analyst, Hargreaves Lansdown

Since listing its shares for the first time at the start of February 2021, Moonpig’s shares have fallen over 47%. That’s partly because the company’s valuation was quite demanding, meaning the market had very high hopes. The group reported a strong set of half-year results and upgraded revenue targets. However, things are still slowing quite dramatically. That’s because lockdowns were the perfect conditions for an online card company, and that helpful tailwind is petering out. Next week it will be important to see that Moonpig is on track to reach the £283 million in full-year revenue that analysts are expecting, although this might be a tall order.

The other thing to keep in mind is rising inflation. Rising costs have the ability to dent margins, but also negatively affect customer demand. As household budgets become tighter, Moonpig may find it more difficult to convince shoppers to add on lucrative extra gifts with their card orders. Things like flowers and chocolates may get rubbed off shopping lists. To that end, the outlook statement will be read very carefully.

Imperial Brands, Trading Statement, Wednesday 6 April

Matt Britzman, Equity Analyst, Hargreaves Lansdown

Next week’s trading statement might shed a little light on how suspended operations in Russia and Ukraine are impacting performance, although it isn’t expected to move the dial much. Last year the regions represented around 2% of sales and 0.5% of underlying operating profits. Attention will instead be on sales growth, or lack thereof, in the group’s 5 core markets. The US, UK, and Spain were all driving forces behind last year’s small increase in tobacco sales, offsetting drops in Germany and Australia. As we enter the second year of the ‘strengthening phase’ in those markets, we’ll be hoping to hear about improving market shares.

Aside from that, any commentary on consumer behaviours will be watched closely. There’s been some uncertainty about how the easing of restrictions will impact tobacco volumes, which are already under pressure from changing habits. Finally, as with any major tobacco company, next-generation products are the key for future success. Having ditched a few products last year, it’d give investors some confidence if more recent trials are showing signs of success.

Entain, Trading Statement, Thursday 7 April

Matt Britzman

Following a bumper period for online gaming, with punters not able to venture into stores for large periods over the last couple of years, online growth is expected to slow from the double-digit highs seen at the full year. What’s key is how much online demand remains sticky. Entain’s offering spans both the virtual and physical worlds, which means customers returning to betting shops isn’t all bad. But the online offering is more profitable and from a margin standpoint, the more demand that can remain online, the better. News relating to Bet MGM, the group’s growth jewel and joint venture with MGM in the US, will be watched with eager anticipation. Growth has been nothing shy of exceptional, as expansion in the growing US markets brings the business ever closer to profitability. For investors, that growth needs to continue, or the higher-than-average valuation could come under pressure.

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Originally published at ValueWalk