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That is the time of yr when a variety of firms unveil their efficiency within the prior yr. Final week noticed fairly a number of FTSE 100 and FTSE 250 corporations unveil their annual outcomes for 2024.
Some, it needs to be stated, had been far more spectacular than others.
Ocado: some promise, however an extended method to go
One FTSE 250 agency that reported its outcomes, solely to be met by a giant share worth fall in response, was Ocado (LSE: OCDO).
The outcomes had been what now we have come to count on from the enterprise.
A lot of speak about potential? Sure. Explanations of how the enterprise is gearing up for long-term efficiency? Sure.
Earnings? No.
The loss-making agency continues to burn money.
For now, I nonetheless regard its capital-intensive enterprise mannequin as unproven relating to profitability. So, for now, I’m avoiding the shares.
However whereas I’ve lengthy been bearish concerning the prospects for Ocado, the outcomes did additionally present a number of doubtlessly promising factors to chew over.
One is ongoing stable development: each the retail three way partnership with Marks & Spencer and the outsourcing providers enterprise provided to retailers globally proceed to develop revenues at tempo. That might lay the foundations for long-term success.
I used to be additionally struck by the corporate’s forecast that it’s going to flip money circulate constructive throughout the subsequent couple of years. I’ll consider it once I see it, however that might be a sport changer for the FTSE agency’s funding case.
So, though I’m avoiding Ocado shares for now, I can be keeping track of its enterprise efficiency.
WPP: adapting to a altering world
Who would wish to be in promoting proper now?
Some purchasers are spending much less, entire markets like China are weak, and AI threatens to exchange a variety of what has historically been finished by advert businesses.
When company community WPP (LSE: WPP) unveiled its full-year outcomes, the share worth dropped like a lead bomb in response.
In some methods I perceive that.
Revenues are set to say no. The corporate has lowered its workforce by 1000’s. That’s not sometimes an indication of energy.
However that partly displays its elevated use of AI. AI is a menace to a few of WPP’s inventive actions — however I additionally reckon it might assist the agency reduce prices considerably. That might be good for income.
In the meantime, WPP has an enormous enterprise, a big international consumer base, and is among the promoting business leaders.
It saved its annual dividend per share, however given the weakened share worth, that equates to a dividend yield of 6.1%. That’s effectively in extra of the present FTSE 100 common.
I didn’t assume WPP’s outcomes had been too dangerous however its shares acquired hammered by the Metropolis and sunk to a four-year low.
That might doubtlessly supply me a sexy shopping for alternative.
However I’m nonetheless questioning whether or not I’m lacking one thing different traders are very nervous about, so I’m eyeing WPP as a possible addition to my portfolio — however don’t but plan to make a transfer.
