This Week in Business: Results from Grafton Group and Hostelworld
CRH, Urban Outfitters, Analog Devices and Target to report results
Hostelworld chairman Michael Cawley. The online booking platform is due to present results on Tuesday. Photograph: Frank Miller
Results: Kenmare Resources, Estée Lauder.
Indicators: Euro-zone construction output (Jun); German producer price index (Jul).
Indicators: UK public sector net borrowing (Jul), industrial trends orders (Aug).
On Tuesday, Hostelworld will present interim results, the first since Gary Morrison took over at the company as chief executive.
Mr Morrison is well placed to lead the online booking platform, having come from his former role as Expedia’s head of retail operations. Before that, he was head of its EMEA business, and has an executive background at Google and Motorola.
As chairman Michael Cawley previously put it, Mr Morrison’s “experience of the travel industry, together with his track record of growth in an online marketing business make him an ideal choice to drive the business forward and deliver on our ambitious goals”.
In a statement to investors in June, Hostelworld said its outgoing chief executive, Feargal Mooney, would “remain employed” by the company, and “continue to be available to it”, until June 11th, 2019. A spokeswoman told The Irish Times he would be on “gardening leave”.
At its AGM around the same time, Mr Cawley said the company was facing “headwinds” from adverse foreign exchange movements, and that it had “limited visibility” on bookings for the forthcoming peak season.
“Hostelworld’s customer-first focus has been enhanced by the introduction in March of a new “free cancellation” product, which significantly improves our product offering and has resulted in growth in both volume and average value of bookings,” he said.
Indicators: Irish wholesale prices (Jul); US existing home sales (Jul).
In general for the first half of the year, top-line trends have been encouraging across the sector and it is now up to companies to manage their cost backdrops effectively.
On Wednesday, Grafton reports its half-year results. It already furnished positive trends in a trading update last month. The Woodies owners said the warm weather had benefited business and reported total revenue as of June 30th at £1.45 billion (€1.64 billion), 7.9 per cent higher on a constant currency basis.
That compared with £1.33 billion in the same period a year earlier. Like-for-like revenue was up 3.8 per cent.
David O’Brien, at Goodbody, said the focus now will be how the company has transferred its performance into profitability and cash generation. They are expecting 9 per cent growth in operating profit.
“We are big fans of Grafton at the moment,” Mr O’Brien said. “For us, it’s definitely the builders’ merchant to own in the sector, so we are pretty confident going into the results.”
Costs for most companies have felt the pinch of energy and labour costs, especially in the US. CRH, which has interim results on Thursday, is no exception but has a number of mitigating factors. Goodbody expects positive things on the day.
As for Kingspan, reporting on Friday, Mr O’Brien said its “performance has been resilient given the headwinds we have seen in the UK non-residential construction market”.
Indicators: Euro-zone composite, manufacturing and services purchasing managers’ index (PMI) flash (Aug), consumer confidence flash (Aug); German composite, manufacturing and services PMI flash (Aug); US composite, manufacturing and services PMI flash (Aug), house price index (Jun), new home sales (Jul).
Meetings: ECB monetary policy meeting.
Results: Kingspan, Foot Locker, Guess.
Indicators: UK finance mortgage approvals (Jul); German GDP growth (Q2).