3 Earnings Season Winners You Should Know About
As the dust settles from a brutal earnings season which has seen stocks heavily punished for missing growth forecasts, we’re going to look at three UK stocks which bucked the trend and beat the market.
Associated British Foods (ABF)
ABF’s share price surged to new trend highs following the announcement of a surprise special dividend, a £500 million share buyback, and robust trading at its discount fashion chain Primark.
ABF reported annual results that exceeded previous guidance, showing a 16% increase in group revenue to £19.8 billion and a 9% rise in adjusted pre-tax profit to £1.47 billion. The company attributed this success to price hikes across its businesses to combat inflation.
Primark experienced a 17% rise in annual revenues to £9 billion, with like-for-like sales growth of 8.5%. Despite a 3% decrease in adjusted operating profit to £735 million, the company’s CEO, George Weston, described Primark’s performance as excellent under the circumstances, emphasising the brand’s attractiveness to both existing and new customers.
The conglomerate’s sugar business, particularly in Africa with Illovo, showed improved profits. Grocery revenues, driven by international brands like Twinings, Ovaltine, and others, performed well, especially in the US. The UK’s Allied Bakeries also saw improved performance.
With strong cash generation and successful strategic initiatives, ABF is well-positioned for further growth and progress in the coming year.
ABF Daily Candle Chart
Past performance is not a reliable indicator of future results
Auto Trader (AUTO)
Auto Trader raced to the top of the FTSE’s highest risers this month after posting a strong set of half-year results.
The online car dealerships operating profit margin remained stable at 71%, while the overall margin slightly dipped to 59%. Basic earnings per share grew by 4% to 12.74p, and cash generated from operations rose by 12% to £184.2 million. EBITDA increased by 9% to £182.1 million, and adjusted earnings per share climbed 2% to 13.96p.
The growth in average revenue per retailer by 12% was attributed to the adoption of additional products and services. Auto Trader expressed confidence in the second half, citing stable recurring revenue and successful execution of a first-half growth event. The integration of Autorama, a new car leasing firm, is underway, promising cost savings and anticipating volume growth.
Auto Trader’s CEO, Nathan Coe said:
“It has been a strong start to the year with more buyers spending more time and completing more of their car buying journey on Auto Trader.”
“We are working in partnership with record numbers of retailers and manufacturers, who are turning to our platform as the most effective and efficient way to source, price and sell their vehicles.”
On the price chart, Auto Trader’s results created the catalyst for a significant breakout. Prices are now consolidating in a tight range near recent highs.
AUTO Daily Candle Chart
Past performance is not a reliable indicator of future results
Experian (EXPN)
Experian’s share price gapped higher earlier this month following an impressive set of first half results.
Revenue from ongoing activities climbed by 6% to $3.41 billion during the six-month period, and profit hit $928 million, propelled by heightened consumer demand for affordability assessments and investment portfolio analysis during the cost-of-living crisis.
Experian attributed its positive results to growth across all regions. Latin America experienced double-digit growth, North America demonstrated improvement by focusing on new revenue streams and analysis tools, while EMEA and Asia Pacific showed signs of improvement, and the UK and Ireland sustained steady growth.
In North America, the company adapted its strategy to emphasise revenue streams like new datasets and analysis tools, offsetting the impact of stricter lending standards. Meanwhile, British lenders are increasingly seeking comprehensive financial data due to heightened concerns about borrowers managing debts in a high-interest rate environment.
The market's response to Experian’s results has been very bullish with the shares breaking above a descending trendline which had been in place since the summer. Prices are now consolidating within a small bull flag pattern.
EXPN Daily Candle Chart:
Past performance is not a reliable indicator of future results
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money..
Associated British Foods (ABF)
ABF’s share price surged to new trend highs following the announcement of a surprise special dividend, a £500 million share buyback, and robust trading at its discount fashion chain Primark.
ABF reported annual results that exceeded previous guidance, showing a 16% increase in group revenue to £19.8 billion and a 9% rise in adjusted pre-tax profit to £1.47 billion. The company attributed this success to price hikes across its businesses to combat inflation.
Primark experienced a 17% rise in annual revenues to £9 billion, with like-for-like sales growth of 8.5%. Despite a 3% decrease in adjusted operating profit to £735 million, the company’s CEO, George Weston, described Primark’s performance as excellent under the circumstances, emphasising the brand’s attractiveness to both existing and new customers.
The conglomerate’s sugar business, particularly in Africa with Illovo, showed improved profits. Grocery revenues, driven by international brands like Twinings, Ovaltine, and others, performed well, especially in the US. The UK’s Allied Bakeries also saw improved performance.
With strong cash generation and successful strategic initiatives, ABF is well-positioned for further growth and progress in the coming year.
ABF Daily Candle Chart
Past performance is not a reliable indicator of future results
Auto Trader (AUTO)
Auto Trader raced to the top of the FTSE’s highest risers this month after posting a strong set of half-year results.
The online car dealerships operating profit margin remained stable at 71%, while the overall margin slightly dipped to 59%. Basic earnings per share grew by 4% to 12.74p, and cash generated from operations rose by 12% to £184.2 million. EBITDA increased by 9% to £182.1 million, and adjusted earnings per share climbed 2% to 13.96p.
The growth in average revenue per retailer by 12% was attributed to the adoption of additional products and services. Auto Trader expressed confidence in the second half, citing stable recurring revenue and successful execution of a first-half growth event. The integration of Autorama, a new car leasing firm, is underway, promising cost savings and anticipating volume growth.
Auto Trader’s CEO, Nathan Coe said:
“It has been a strong start to the year with more buyers spending more time and completing more of their car buying journey on Auto Trader.”
“We are working in partnership with record numbers of retailers and manufacturers, who are turning to our platform as the most effective and efficient way to source, price and sell their vehicles.”
On the price chart, Auto Trader’s results created the catalyst for a significant breakout. Prices are now consolidating in a tight range near recent highs.
AUTO Daily Candle Chart
Past performance is not a reliable indicator of future results
Experian (EXPN)
Experian’s share price gapped higher earlier this month following an impressive set of first half results.
Revenue from ongoing activities climbed by 6% to $3.41 billion during the six-month period, and profit hit $928 million, propelled by heightened consumer demand for affordability assessments and investment portfolio analysis during the cost-of-living crisis.
Experian attributed its positive results to growth across all regions. Latin America experienced double-digit growth, North America demonstrated improvement by focusing on new revenue streams and analysis tools, while EMEA and Asia Pacific showed signs of improvement, and the UK and Ireland sustained steady growth.
In North America, the company adapted its strategy to emphasise revenue streams like new datasets and analysis tools, offsetting the impact of stricter lending standards. Meanwhile, British lenders are increasingly seeking comprehensive financial data due to heightened concerns about borrowers managing debts in a high-interest rate environment.
The market's response to Experian’s results has been very bullish with the shares breaking above a descending trendline which had been in place since the summer. Prices are now consolidating within a small bull flag pattern.
EXPN Daily Candle Chart:
Past performance is not a reliable indicator of future results
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money..
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