Equity Briefing: Rio Tinto, Burberry and Renold

Mining giant Rio Tinto release an operational update this morning, luxury fashion line Burberry will post first-quarter results, while industrial chain maker Renold is scheduled to publish preliminary full-year results.

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Rio Tinto

Rio Tinto is due to release an operational update covering the second quarter today. These updates concentrate solely on production numbers rather than financials and the primary focus is on whether the miner’s output has kept on track for it to meet its full-year targets. Production of most commodities fell in the first quarter as Rio Tinto is constantly adjusting output to prioritise value over volumes, but it maintained its guidance for 2021 across the board. Reiterating its annual targets will be the priority for investors this morning.

Burberry

Burberry will release a first-quarter trading update this morning. Burberry’s quarterly trading updates focus solely on revenue figures. Analysts are expecting first-quarter revenue of £444.5 million. That will be a marked improvement from the £257 million booked the year before, flattered by the fact sales were hard-hit as the pandemic erupted and lockdowns started to bite. Revenue will also start to benefit as Burberry focuses more on full-price sales and reducing the number of markdowns it makes in the new financial year. While this should benefit topline revenue it will hurt comparable store sales. Investors will also watch out for news on the search for a new CEO after Marco Gobetti, who has led the company’s transformation over the past three years, announced last month that he is leaving at the end of 2021.

Renold

Renold, the maker of industrial chains and power transmission products, is scheduled to publish annual results this morning. The company was hard hit by the pandemic in the first half, but things have been steadily improving since then. We already know that order intake was down 7.4% in the year to £170.0 million and that revenue fell 12.7% to £165.3 million. But, with revenue down just 8.3% year-on-year in the final quarter, Renold will be eyeing a return to pre-pandemic levels of activity in the new financial year. Analysts are expecting adjusted pretax profit to fall to £6.2 million from £8.2 million and for adjusted EPS to drop to £1.90 from £2.90 the year before.

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