Market Report: UK manufacturers eye growth hat-trick
Monday 01 July 2013
The nascent march of the makers tops the bill today in a quiet start to the week for City updates. The attention will be on the release of the latest manufacturing purchasing managers' survey. Economists are expecting activity to have expanded for the third straight month – the first time this would have happened since the first quarter of 2012. IHS Global Insight's Howard Archer predicts an improvement to 51.5 for June, after it rose to 51.3 in May.
Results/Updates: No major updates due.
Persimmon unveils a trading statement tomorrow, and the housebuilder will offer a "robust" outlook, predicts Glynis Johnson from Deutsche Bank, who says that "strong reservations and margin progression may drive upside to consensus estimates". When Persimmon last updated the market back in April it said selling rates had risen year on year by around 4 per cent over the first 15 weeks of 2013, and Johnson suggests that since then the Government's Help to Buy scheme will have driven "a significant pick up in reservations".
The Jacamo and Simply Be online retailer N Brown will also be in the spotlight tomorrow when it releases its latest update at the same time as holding its AGM in Manchester in what will be new boss Angela Spindler's first appearance in front of investors. Back in April the company said like-for-like sales over the first seven weeks of the financial year had risen by 6.1 per cent, and Andrew Wade from Numis Securities predicts that – partly thanks to the better recent weather – this could have improved.
Results/Updates: Anite, N Brown, Ocado, Persimmon, St Modwen Properties.
Investors waiting for a flow of oil from the explorer Tullow Oil may have to make do with a strong flow of news. Punters are awaiting results from its Sabisa-1 well, a resource upgrade in Kenya, as well as progress with developments in Ghana and Uganda. RBC Capital's analysts think its third-quarter trading statement on Wednesday will be encouraging, and they say the "lowly" share price is undervaluing what is to come for the Africa-focused group. RBC predicts expect healthy earnings of $250m (£165m) and suggest there could be a 4p increase in the interim dividend but that Tullow may also wait for any increase to take place after it completes the sale of its Southern North Sea portfolio and a stake in the off-shore Ghanaian TEN complex.
Results/Updates: Carillion, Tullow Oil.
Taylor Wimpey is also set to confirm improving market conditions when it updates on trading. The housebuilder has seen rising reservations as government stimulus drives a housing market recovery. By April its total order book was up 18 per cent to £1.2bn over the same time in 2012, with prices and margins improving. Private reservations were up to 0.67 sales per outlet, from 0.62 per outlet a year earlier, with growth led by the buoyant London and the South-east markets.
Analysts expect the builder to report more growth – and Citigroup believes it could even be close to returning money to shareholders. They said: "We expect the group to continue to make good progress with margins and see recent sales rates boosted by the easing mortgage market. Capital return remains a possibility at some point – its balance sheet remains strong with net debt of only about £195m reported at the end of March."
Keith Bowman at Hargreaves Lansdown added: "Unlike Persimmon, and with the company having endured the credit crisis in a more challenged condition than its rival, and therefore with a full recovery potentially still at an earlier stage, consensus analyst opinion remains positive in tone."
Results/Updates: Taylor Wimpey, NCC, Low and Bonar, Dunelm.
Results/Updates: No major updates due.
Hometrack housing survey; Cips purchasing managers index manufacturing; Bank of England mortgage approvals; Bank of England consumer credit.
Cips purchasing managers' index, construction.
Cips purchasing managers' index, services; British Retail Consortium shop prices; Bank of England Monetary Policy Committee meeting.
Bank of England MPC's interest rate decision; Lloyds employment confidence; Bank of England asset purchase target; New car registrations.
During the week Halifax house prices.
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