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Will Boohoo's festive numbers confirm it remains 'queen of AIM'?

Tuesday will also see trading updates from Taylor Wimpey and PageGroup, plus half-year numbers from Games Workshop and DFS Furniture

Taylor Wimpey -

Boohoo Group PLC (LON:BOO) will on Tuesday provide an update on its performance over the important festive period, with the numbers expected to confirm that the retailer can confidently wear the ‘king of AIM’ crown.

The online fast-fashion specialist, which should perhaps be styled the ‘queen of AIM’ due to its strong leaning towards female customers via brands like Nasty Gal and PrettyLittleThing, will release an update covering third-quarter revenues as well as the run-up to Christmas.

Early last month it released a no-numbers update flagging “record” sales across the Black Friday weekend, adding that its new ranges for Karen Millen and Coast had been “very well received”.

Boohoo also added full-year figures would be “comfortably in line” with forecasts, which include revenue growth of between 33% and 38%.

Two days after the December update, Boohoo shares dropped on news co-founders Mahmud Kamani and Carol Kane had sold part of their stake in the company. However, the stock has recovered since jumping 13%.

“The company has consistently achieved strong growth in sales and profits, but there will be great interest in this trading update,” analysts at the Share Centre said in a note.

Market expectations for full year underlying profits (EBITDA) of £116mln are towards the higher end of management's guidance.

First of the housebuilders opens its doors

On Tuesday we’ll hear from the first of a trio of housebuilders to report on trading since the general election delivered what is expected to be a sector-friendly result.

Taylor Wimpey PLC (LON:TW.) has enjoyed a share price bump of more than 15% since the Tories won a larger parliamentary majority, with the stock was on the front food a day before the trading update as another analyst turned positive.

Adding to several other upgrades, target prices increases and general glowing views from the Square Mile in the past week, Bank of America Merrill Lynch and Peel Hunt both upgraded Taylor Wimpey on Monday, to ‘buy’ and ‘add’ respectively, nudging their target prices to 230p and 215p.

Peel Hunt said the Tory victory had given the sector “a shot in the arm” and they expected house prices to follow suit, with expected improved consumer confidence and housing demand “should see house prices edge up, helping housebuilder margins, while there will be more upside potential for volumes”, leading to the sector continuing to “throw off large amounts of cash”.

This came after Berenberg said last week that the sector was “open for business again” following the election, hiking price target prices across the board, with Taylor Wimpey one of its top picks.

“The weeks since that election result have been marked by optimistic comments from various estate agency and housing bodies, predicting a return to stronger house price growth and rebound in the UK property market”, Berenberg said.

Analysts at Citigroup, who also chose Taylor Wimpey among their top picks, believe the sector’s net assets are poised to grow circa 17% on an annualised basis over the next three years, supported by “modest volume growth, improving margin outlook and strong cash generation”.

Taylor Wimpey’s shares, despite strong recovery last year, are no higher than where they were two years ago, though Russ Mould at AJ Bell noted that they are currently the second-highest yielding on the FTSE 100.

For this week’s year-end numbers, analysts and investors will want to see how TW’s completion numbers compare to the 15,275 houses sold at an average price of £302,000 in 2018, as well as guidance for the year ahead.

The market currently forecasts pre-tax profit of £820mln for 2019 and 2020, but investors may be more focused on comment about the company’s cash return policy, with the present plan being to return just over £600mln for last year, just over 18p a share.

Tuesday January 14:

Finals: Watkin Jones PLC (LON:WJG)

Interims: DFS FURNITURE PLC (LON:DFS), Games Workshop Group PLC (LON:GAW), Gateley Holdings PLC (LON:GTLY), McBride plc (LON:MCB)

Trading announcements: Boku Inc (LON:BOKU), Boohoo Group PLC (LON:BOO), Taylor Wimpey PLC (LON:TW.), Grafton Group PLC (LON:GFTU), PageGroup PLC (LON:PAGE)

Economic data: US inflation, China trade

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