The Week Ahead: US housing jitters could add to Hanson's woes

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The Independent Online

Arguments about where the US housing market is going are commonplace in the City at the moment. The bears, and there are plenty of them, are predicting anything up to a 20 per cent decline in the next 12 months. A trading statement from Hanson on Wednesday should give the argument fresh fuel.

Hanson has relied on the US market for a long time, and is one of the largest suppliers of bricks, pipes and aggregates to the US market. More than half of group profits come from the other side of the pond, and if the housing market is deteriorating at the rate prophets of doom would have us believe, the outlook could be very gloomy.

Rumours that Hanson is poised to offload its US businesses, either via a trade sale or flotation, seem to have taken a back seat recently but some traders remain convinced the group will do something to extract value from its US operations. The Australian and UK operations have lagged behind the US so far this year and analysts will also be looking for comforting noises about non-US operations.

There are unlikely to be any really nasty shocks from Hanson but any negative noises about the US housing market could lead to a sell-off in a large number of related stocks, including Wolseley and Ashtead, which reports its full year numbers on the same day.

TODAY: Results: Full year - Creston; Litcomp; Lombard Risk Management; Supporta; Top Ten Holdings. First half - Beale.

TOMORROW: The bar has been set pretty high for Debt Free Direct. Rival Debtmatters reported a 460 per cent rise in pre-tax profits two weeks ago and investors will be looking for something similar. A bullish update in May, when Debt Free Direct said it has cornered 20 per cent of the debt management market in the UK, which is expanding rapidly through the use of individual voluntary arrangements, and that the company would "comfortably" meet market expectations. With consumer debt rarely out of the headlines, expect to see a strong set of debut numbers.

Shares in United Business Media have underperformed a dull market in recent weeks, dropping 14.6 per cent from the high of 738.5p. The company will need to deliver a decent trading statement if it is to stop the rot. The group gave a decent, if uninspiring, update in May but investors are beginning to lose interest.

Analysts at broker Dresdner Kleinwort Wasserstein will be paying particular attention to results from Carpetright. Last week the broker advised its clients to sell shares in the retailer, setting a target price of 1.050p, some 20 per cent below where the stock is currently trading. A bold move a week before results - anything worse than the £56m of pre-tax profits analysts are expecting and Dresdner could be right.

Results: Full year - Carpetright; Debt Free Direct; Goldshield; Radstone Technology; Stonemartin.

WEDNESDAY: Ashtead, the plant hire group, has enjoyed a remarkable turnaround in the last few years as its shares have risen an incredible 6,900 per cent since a low of 2.5p in March 2003, when the company was caught up in an accounting scandal. Profit-taking by some major shareholders in recent weeks has seen the share price tumble from a 2006 high of 241p to close at 175p last week. Consensus forecasts are for pre-tax profits of £66m, up from £22.4 in the previous 12 months, but of greater interest will the be the company's view on the US construction market. Bearish noises from US house builders have added to the recent selling pressure and analysts are hoping for a reassuring trading statement.

Analysts are not expecting any nasty shocks when Standard Chartered gives the market a trading update. Not surprisingly there have been constant bid rumours since Singaporean government fund Temasek Holdings bought an 11 per cent stake in the group in late March, but given its size (current market capitalisation £17.3bn) and strong presence in South East Asia, takeover rumours are nothing new. The trading update in May confirmed the usual strong performance across the group and anything other than more of the same would be a shock.

Results: Full year - Ashtead Group; International Group; Invocas Group; Marchpole Holdings; Narrowstep; Stagecoach Group. First half - Ultraframe

THURSDAY: Life as a public company hasn't been plain sailing for RHM, the baker, since its flotation last year. The company has been plagued by rumours of profit warnings and rivals have all warned in the last six months. April's trading statement was more upbeat than many expected, but the share price continues to struggle. Consensus forecasts are for pre-tax profits of £116m.

Results: Full year - DS Smith; James Latham; Micro Focus International; RHM.

FRIDAY: Results: Full year - Berkeley Group.

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