Local Releases in Full Swing Next Week

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On the local front, another busy week is on the cards:

Super Group (Full-Year Results): Headline earnings per share (HEPS) are expected to increase by 64% to 100% y/y. Revenue will be 6.4% to 26.5% higher with operating profit expected to grow by 20.8% to 46.5%, reflecting strong sales performances in Fleet Solutions and Dealerships UK in particular.

  • Advtech (JO: ADHJ ) (Interim Results): Management recently guided for HEPS to grow between 34% and 38% y/y. All divisions delivered an increase in operating profit and profit before tax benefited from the disposal of land and buildings and lower net financing costs (on lower borrowings and a lower interest rate).
  • Aveng (Full-Year Results): HEPS will be between 1.8 cents and 2.1 cents, an improvement from a loss of 4 cents reported in FY20. The company expects to report improved operating profit and net profit after tax. The performance was bolstered by the operational performances of both the core and non-core businesses.
  • Harmony Gold (Full-Year Results): The headline loss per share of 154 SA cents in FY20 is expected to reverse to HEPS of between 857 and 994 SA cents in FY21. FY21 earnings were driven by the positive contribution of the acquisition of Mponeng operations and related assets, a higher rand gold price, an increase in gold sold, and forex and derivative gains.
  • Master Drilling (JO: MDIJ ) (Interim Results): HEPS are expected to increase by between 82.5% and 92.5% y/y in USD terms. HEPS in ZAR will be 59.2% to 69.2% higher y/y. FY20 was an abnormal trading year because of Covid-19. Against 1H19, HEPS are expected to increase between 7.4% and 14.8% in USD terms and 10.7% and 17.6% in ZAR terms.
  • Motus (Full-Year Results): Per management, HEPS are expected to grow by 288% to 308% y/y. Revenue is expected to increase by between 15% to 25% y/y. EBITDA is anticipated to grow by between 25% to 35% y/y, while operating profit is expected to increase by between 65% and 87% y/y.
  • Old Mutual (LON: OMU ) (Interim Results): Adjusted HEPS are guided to increase between 65% and 75% y/y. Headline earnings are lower than the prior year as AHEPS excludes adjustments of equity and debt instruments held in life funds, the impact of restructuring, and the results related to Residual Plc. This was partially offset by better results from Zimbabwe. Productivity levels in the SA retail segments, Mass and Foundation Cluster and Personal Finance materially improved in 1H21.
  • STADIO (JO: SDOJ ) (Interim Results): Management recently guided for core HEPS to increase between 32% and 49% y/y. Basic EPS and HEPS losses are expected to swing to positive values impacted by an accounting fair value adjustment relating to R74 million on the CA connect acquisition and the impairment of trademarks of certain brands that were consolidated under the “STADIO” brand (R60 million) in the prior comparable period. Management noted that student numbers increased 11% y/y bolstered by a strong performance in the distance learning offerings, with online professional programme offerings showing solid growth.
  • Sun International (JO: SUIJ ) (Interim Results): The adjusted headline loss per share (HLPS) is expected to narrow to between 1 cent and 15 cents compared to an HLPS of 702 cents in 1H20. Adjusted EBITDA is expected to improve to between R720 million and R740 million, compared to R79 million in 1H20.
  • Wilson Bayly Holmes (JO: WBOJ ) (Full-Year Results): For FY21, HEPS are expected to come in at 600 cents in FY21 compared to a loss of 923 cents in FY20 and signalling a sharp improvement in 2H21. Although Covid-19 continued to exert some influence, the operational performance improved significantly.
  • Impala Platinum (JO: IMPJ ) (Full-Year Results): The company expects HEPS to grow between 120% and 126% y/y. The weighted average number of shares in issue for the period increased to 784.4 million from 777.2 million due to bondholders electing to convert their bonds into ordinary IMP shares.
  • Santam (JO: SNTJ ) (Interim Results): Management guided for HEPS to increase between 20% and 40% y/y. The increase in HEPS was driven by improved underwriting results, partly offset by reduced investment income due to low interest rates and a stronger rand. The comparative period was negatively impacted by provisions for Covid-19 related contingent business interruption claims.
  • Truworths (JO: TRUJ ) (Full-Year Results): The company expects HEPS to increase by 23% to 28% y/y. The group has reopened 30 of the 57 stores that were impacted directly by recent civil unrest and expects to open a further 18 by the end of August.
  • Discovery (JO: DSBPp ) (Full-Year Results): Consensus expects FY21 earnings to total 790.9 cents, up 38.6% y/y. The effect of continued interest rate volatility is expected to remain a feature of the results in the case of Discovery Life, however a hedge in the UK is expected to remove the volatility for VitalityLife. Solvency, cash and capital are not expected to be negatively impacted by these interest rate movements in SA, and normalised earnings will not be impacted.
  • Aspen (JO: APNJ ) Pharmacare, Sea Harvest Group, Brimstone Investment, Hyprop Investments, City Lodge Hotels and Fortress REIT will also release results next week.
  • From a corporate actions perspective, Tuesday marks the last day to trade AECI Ltd, BHP Group (JO: BHPJ ), Glencore (LON: GLEN ), HomeChoice International, Merafe Resources and Quilter to receive their most recently declared distributions.
  • Reinet Investments SCA (JO: RNIJ ), Hosken Passenger Logistics and Rail  (JO: HPRJ ), Hosken Consolidated Investments  (JO: HCIJ ), eMedia Holdings, Irongate Group, Oando PLC (JO: OAOJ ), Mahube Infrastructure (JO: MHBJ ), Vukile Property Fund (JO: VKEJ ), Huge Group (JO: HUGJ ), Nictus (JO: NCSJ ), Capital Appreciation (JO: CTAJ ), The Foschini Group (JO: TFGJ ), Alexander Forbes (JO: AFHJ ) Group and Chrometco (JO: CMOJ ) will host AGMs in the upcoming week. Stefanutti Stocks Holdings will also host a GM in the upcoming week.

A less eventful week is expected in the US, with only a few stocks anticipated to release results next week. With most companies having reported results for 2Q21, S&P 500 sales and earnings grew 25.7% and 92.9% respectively. Overall, 2Q21 sales beat expectations by 4.7% and earnings were ahead of consensus by 16.3%. Within the index, 86% of the companies reported betterthan-expected earnings numbers.

  • PVH Corp (NYSE: PVH ), which houses brands including Tommy Hilfiger and Calvin Klein, will publish 2Q22 numbers. Bloomberg expects 2Q22 earnings to surge to $1.199 (2Q21: -$3.148). While the sale of the Heritage Brands business is expected to be EPS dilutive in the near term, consensus expects PVH’s margins to be positively impacted in the outer years given that the remaining businesses within Heritage generated double-digit operating margins pre-pandemic.
  • Campbell Soup Company (NYSE: CPB ) sales may fall as much as 14% in 4Q21 to be within management’s 3% to 3.5% guided drop for the year. Bloomberg expects low-single-digit declines for 1H22 on the lingering effects of Covid-19 and price increases. The adjusted EBIT margin may narrow as much as 100 basis points in 4Q21, on reduced operating leverage and commodity inflation that has not been fully offset by pricing actions, negating as much as $20 million in cost savings.
  • HP’s 3Q21 earnings are expected to increase 70.5% y/y, but higher component and logistics costs are headwinds and may offset demand strength. A recovery in Commercial could help pricing and margins.

A quieter week is also anticipated in Europe and the Asia-Pacific region.

  • Look out for FY21 results from Fortescue Metals Group , with earnings expected to rally 118.3% y/y. According to Bloomberg, Fortescue’s 2021 performance may surge, with consensus expecting average 62% Fe prices of ~$160 per dry metric tonne (dmt) and steady volume of about 180 million tonnes. Good financial results may extend in 2022, with analysts estimating 62% Fe prices to soften but stay high at ~$130 per dry metric tonne.

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