Equities Update: Warhammer, Ocado, DFS, JD….

Warhammer maker profits spike with TV deal on the way

Adam Vettese, market analyst at investment platform eToro, says: “Games Workshop’s Warhammer series seems to be the golden goose that keeps laying eggs after reporting their best half-year performance to date. Going beyond just selling figurines to the hobbyist, the jump in licensing revenue is of particular note, especially after the on-screen adaptation in partnership with Amazon got the green light just before Christmas. Warhammer is more popular than ever and especially now with multiple revenue streams to exploit its popularity, making hay while the sun shines seems to be what the firm is doing.

Ocado posts record Christmas numbers as investors hope the turnaround begins here

Mark Crouch, market analyst at investment platform eToro, says: “Ocado investors were met with some much-needed good news this morning as the online retailer confirmed record-breaking Christmas sales numbers. Ocado’s active customers grew by over one million, while Q4 revenue, order volume, and average orders all jumped by over 16%. Ocado’s management expressed confidence that the online retailer will continue to deliver sales growth into 2025.

“While this trading update is undoubtedly positive, it remains to be seen whether investors are fully convinced. Ocado shares are up 10% this morning; however, after what has been a miserable few years for shareholders, more will be needed to recapture the dizzy heights of 2020, as the cold hard truth is that despite all the prospects and potential, Ocado has yet to deliver consistent profitability.

“While profitability could set in quickly, there are growing murmurs that perhaps Marks & Spencer—who have a business partnership with Ocado and have demonstrated an astonishing turnaround over the last two years—should have more control to increase those odds. If Ocado’s shares don’t start performing soon, shareholders may begin calling for it as well.”

“Shares have been on a fantastic run the last two years, and with a 33% jump in profit just announced, investors may reasonably expect that the upward trajectory still has room to run. The margins on the product are very healthy and the firm has already factored in many of the UK budget cost increases in its plans.”

JD warns on profit following tough year

Adam Vettese, market analyst at investment platform eToro, says: “JD Shareholders have had a tough 12 months as it is, and unfortunately this morning’s update has added more fuel to the fire. The company has warned on profit, bringing the top end of guidance down by 100 million amid challenging and volatile conditions.

“It’s seems the supermarkets were the exception rather than the rule when it comes to retail performance over this past Christmas, as JD struggled in November and December, dashing any hopes of saving an already poor year.

“Shareholders will want to see the board implement a plan to stop the rot and fast. The price has almost halved in a little over three months, but with the outlook also not looking great, could it be time for investors to cut their losses?”

A resilient recovery amidst turmoil for DFS

Mark Crouch, market analyst at investment platform eToro, says: “DFS Furniture has posted a much-improved trading update today, showing that despite the ongoing economic challenges and geopolitical tensions, the company’s strong product offering, well-timed initiatives and focus on quality has sparked a notable turnaround.

“Investors who may have been hiding behind the sofa after the tumultuous events of 2024, including the Red Sea crisis that heavily disrupted shipping and led to two profit warnings, can take some comfort now as it appears DFS has managed to weather the storm, with improved trading performance as consumer demand holds steady despite the broader challenges.

“The sharp recovery in DFS’s share price—up over 40% since last June’s sharp sell-off—reflects this positive shift. Higher sales, cost-saving initiatives, and the strategic expansion of DFS’s Sofology brand, which saw impressive 19% year-on-year growth, have all contributed to the performance. Additionally, the return of DFS’s popular “four years interest-free credit” offering has helped bolster revenue in this tough period.

“With the Bank of England signalling potential interest rate cuts, DFS could further capitalise on favourable conditions, making it more aggressive with these financing deals, which should ease concerns for shareholders and help maintain momentum.”