These three UK shares are set to furnish the market with trading updates in the days and weeks ahead. Should you buy them ahead of these fresh statements? Here I take a look.
It’s unsurprising that multinational recruitment specialist Robert Walters has seen its share price collapse in 2020. Since trading started on New Year’s Day its stock has lost a jaw-dropping 32% of its value as the global economy has suffered a Covid-19 shock.
I worry, too, that this most cyclical of shares could be in for a significant period of bottom line pressure. And that third-quarter financials slated for this week (Thursday, 8 October) could exacerbate market fears and prompt a fresh share price slump. Robert Walters certainly spooked in July when it declared that revenues tanked 22% in the first six months of 2020.
Latest research from Manpower Group
illustrates the scale of the challenge facing Robert Walters and its peers. Its Employment Outlook Survey for the fourth quarter shows that employers now expect the recovery in the worldwide labour market to take longer than anticipated. Just 31% now expect a recovery by April 2021 versus 54% at the time of the last quarterly survey. I’m worried that the recent spike in Covid-19 cases could drive that number down significantly in the weeks ahead, too.
I’d much rather invest in Treatt today. This UK share manufactures flavour, fragrance and cosmetics ingredients for a wide range of products. And last time it updated the market in May it reported that it had seen no adverse impact from the Covid-19 crisis at all. I’m expecting more reassuring trading commentary when quarter three numbers are unpacked this Friday (October 9) too.
Treatt’s a critical ingredient provider in the defensive food, beverages and cleaning products. This gives it terrific protection during economic downturns like these. In fact the chemicals giant has actually seen business pick up following the coronavirus breakout.
As it said during the spring: “order intake towards the end of the [October to March] period has been strong as a number of our customers respond to increased demand for beverages consumed at home and cleaning products (such as liquid hand soaps and floor cleaning products) which are of particular importance at this time.” The same drivers will have boosted sales since then and are likely too for the foreseeable future as well.
Buying shares in Barratt Developments would also appear a good idea before its upcoming AGM. Fresh trading details are set for release at the time of the meeting on Wednesday, October 14. I’m predicting another strong set of comments in line with those of Britain’s other major housebuilders in recent weeks.
You might think that Barratt would be suffering from the difficult economic climate. However, demand for its newbuilds has ripped higher since lockdown restrictions were eased during the summer and the homes market sparked back into life. Barratt previously noted that net private reservations per active outlet per average week came in at 0.94 between July 1 and August 23. This compared with 0.68 in the corresponding 2020 period.
I’m expecting trading at Barratt to remain strong for the foreseeable future, too. Sure, the economic outlook might be less than reassuring right now. But there simply aren’t enough new homes to go round in Britain. And supported by low interest rates, along with government support like the Help to Buy equity loan scheme, I fully expect demand for newbuild properties like those of Barratt to remain robust.
Royston Wild owns shares in Barratt Developments.