Look ahead to FTSE 350, other companies reporting & economic events from 7 – 11 October 2024

• PepsiCo could see third-quarter revenues fizz higher
• Imperial Brands expected to step up growth levels in its Next Generation Products
• Hays will be hoping increases in economic optimism spurs recruitment drive  

PepsiCo, Q3 Results, Tuesday 8 Oct

Aarin Chiekrie, equity analyst, Hargreaves Lansdown 

“Back in July, it was another weak showing on the revenue front for Pepsi, which saw the full-year outlook get downgraded. Second-quarter revenue grew just 1.9% on an organic basis, as higher prices were partly offset by flat drink volumes and food volumes, which fell by 2.0%. Underlying operating profits grew at a faster pace of 7% though as the group squeezed out productivity savings. But cost cuts are more like a plaster than a long-term treatment.

Looking to next week’s results, with cost inflation expected to ease, the rate of price hikes should slow and hopefully revive some demand for Pepsi’s products. Growth from a more sustainable mix of both price and volume would be welcome by investors. But for that to happen, the group can ill afford another product recall like the Quaker Oats debacle earlier this year, where there were concerns of potential contamination with salmonella.”

Imperial Brands, Trading Statement, Tuesday 8 October

Derren Nathan, head of equity research, Hargreaves Lansdown 

“Strong pricing in Imperial Brands’ first half more than offset the continued structural decline in tobacco volumes. With inflation easing, price rises may get harder to push though. In next week’s trading update, the market will find out if the Lambert and Butler manufacturer has managed to keep organic growth moving in the right direction.

There’s also growing pressure for Next Generation Products (NGPs), including products like heated tobacco and vapes, to make a bigger contribution. Revenue in this segment grew by 16.8% in the first half, but it’s a tiny part of the picture. Management will be hoping that recent product launches and marketing initiatives will see that level accelerate.

Imperial’s cash generation supports generous payouts to shareholders, who will be keen for a progress update on this year’s targeted returns of £2.4bn, as well as longer-term commitments to dividends and buybacks.”

Hays, Q1 Trading Statement, Tuesday 8 October

Susannah Streeter, head of money and markets, Hargreaves Lansdown

“Recruitment has been a challenging place to be with employers reluctant to hire staff, which has hit Hays hard. Annual profits were down more than 90%, not helped by uncertainty in the run-up to the general election in the UK and France, and an unpredictable economic outlook. A fresh loss of business confidence in the UK in September, as measured in the Institute of Directors Economic confidence index, does not bode well, in the short term, for the company. With the Labour government warning that things will get worse before they get better, it may well keep employers cautious.

The latest economic snapshot from PMI surveys in September shows that UK services companies saw moderate expansion of activity, fuelled by resilient business and consumer spending, although output, new work and employment all increased at the slowest pace for three months. However, with the Bank of England signalling that more aggressive interest rate cuts could be on the way, there could be an improvement in business optimism in the months to come.

So, although it’s likely to stay relatively tough for Hays in terms of fee income, there may be more light appearing at the end of the tunnel, if client and candidate confidence grows, as borrowing costs fall. In the meantime, investors will want to find out if Hays’ strategy aimed at keeping costs lower and going more aggressively after areas of growth is showing signs of helping profitability.”

Among those currently scheduled to release results next week:

*Events on which HL will be updating investors