The Week Ahead: Will housebuilder duo raise the roof?
Monday 25 February 2013
The UK loves a bit of property porn – salivating over country piles or city crash pads, and this week for the City it is all about property. From housebuilders to the creators of shopping centres, results will fly in to give investors an idea of how house prices are faring and how property values are holding up.
Today, it is the turn of the builders Persimmon and Bovis Homes. Panmure Gordon rates Bovis a hold with a 650p price target. The outlook for the housing market is good – a recent Rightmove survey showed house prices were nearing a pre-crisis high – but with ongoing economic uncertainty Panmure thinks the shares are fairly priced at the moment. Numis Securities expects pre-tax profit of £52.5m for 2012. But analysts at Numis' think that although Persimmon will report a reasonable trading update, its shares are priced too high and there is "superior value elsewhere in the sector".
Results/Updates: Associated British Foods, Bovis Homes, Bunzl, Dialight, Domino's Pizza, Hiscox, Pearson, Persimmon, Petra Diamonds, Senior, Thorntons, XP Power.
Time to take a break and look at coffee shops and cheap hotel rooms. Whitbread, says Morgan Stanley's Jamie Rollo, "remains a high-quality investment", but he is worried about growth, as the "competition intensifies" with more rivals in the UK budget hotels and coffee shops market. Ahead of its trading statement, he rates it a hold with a 2,500p target. He still thinks it is an attractive business, "but the valuation might have run too hard, with little discussion of the risks".
Results/Updates: Craneware, Croda, Dechra Pharmaceuticals, Devro, GKN, Imperial Tobacco, Provident Financial, Redrow, Robert Walters, Whitbread, Wilmington.
Square-eyed analysts have been licking their lips over the ITV full-year results. There was rehashed bid speculation earlier this month but the main reason investors have been piling into the shares is talk that ad spend is up. Last week the market saw strong results from smaller rival STV, which holds the Scottish ITV1 licences, and said first-quarter TV ad revenues will be up 3 per cent. Liberum Capital rates it a buy with 155p target price for the shares. It thinks the market hasn't "factored in the full benefit of non-TV advertising related factors such as cost savings". Analysts expect pre-tax profit at around £460m.
Results/Updates: Barratt Developments, Capital Shopping Centres now Intu, Carillion, Centrica, Clinigen, Interserve, ITV, Petrofac, Segro, Weir.
The owner of Covent Garden and Earl's Court, Capital & Counties follows its former sister company Capital Shopping Centres. The latter, renamed as Intu Properties, is expected to report a second-half decline of around 1 per cent as rental income declines. It is in talks to buy Midsummer Place shopping centre in Milton Keynes, which could put pressure on its loan-to-value ratios. But Capital & Counties is boosted by its central London focus, and Numis's Chris Spearing expects the value of its Covent Garden assets to have grown by around 7 per cent.
Royal Bank of Scotland, meanwhile, is expected to post a loss. Investec Securities expects £3.9bn.
Results/Updates: British American Tobacco, Capita, Capital & Counties, Colt, Derwent London, Direct Line, Genel Energy, Gleeson, Hargreaves Services, Hays, Howden Joinery, Jupiter Fund Management, Kazakhmys, Kier, LSL, Man Group, National Express, Ricardo, Reed Elsevier, Royal Bank of Scotland, RPS, Spirent, St James's Place, Vitec, Xchanging.
The shopping centres owner Hammerson has ended its fight with the Australian property company Westfield over plans to build a retail centre in Croydon, south London. Hammerson has sold most of its office assets to focus on retail. The shares have fallen since it agreed to bury the hatchet with Westfield, but Peel Hunt rates the shares a hold ahead of full-year results when it is set to report £277m net income.
Results/Updates: Atkins, BBA Aviation, Berendsen, Fiberweb, Hammerson, Laird, Lloyds Banking Group, Old Mutual, Rightmove, Sage, Stagecoach, Taylor Wimpey, UBM, William Hill, WPP.
British Bankers' Association house purchase loans data, Nationwide house price figures, Hometrack housing survey.
CBI reported sales data (February).
Fourth-quarter GDP, index of services, fourth-quarter government spending data, fourth-quarter private consumption figures, fourth-quarter import/export data, fourth-quarter total business investment.
GfK consumer confidence.
Purchasing managers' index – manufacturing, net consumer credit data, mortgage approvals, M4 money supply figures.
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