The Week Ahead: Bovis might reveal first land writedowns

Bovis Homes may announce its first land writedowns when its posts full-year results for 2008 today.

The company entered the recession with considerably higher earnings margins than others in the housebuilding sector and has therefore not had to take on land writedowns so far, according to Panmure Gordon.

But that may be about to change as the slowdown in the property market may have made some sites unprofitable at a gross level. "We factor in £60m of writedowns in the 2008 results, and £177m in 2009," the broker said in a note to clients last week.

The news on current trading promises to be more heartening, however, as others in the sector have reported a pick-up in activity over the past month or so.

"Bovis's presenting style has always been frank and honest and, therefore, it will be interesting to see whether management put any recent improvement in sales down to the usual spring pick-up or whether they believe market activity is genuinely showing signs of underlying improvement," Panmure said. "With banking facilities recently renegotiated, we see no issues on financing and no need for a dilutive rights issue."



Today: Results/updates: Chaucer, Cookson, Hiscox, Intertek, Petrofac, Spirax-Sarco, Management Consulting, Unite, Parkwood, Bovis Homes.



Tomorrow: Tullett Prebon's full-year results are likely to be in line with market expectations, according to Evolution Securities. But, given the tough market environment, the company is expected to strike a cautious tone when outlining the prospects for the year ahead. "The outlook for 2009 is likely to be cautious, with our estimates looking for year-on-year revenues to decline by 22 per cent (on a constant currency basis) to £790m," the broker said. "The decline is likely to be stronger in the first half of the year due to strong comparatives in January and February."

Results/updates: Abcam, G4S, F&C Asset Management, Greggs, Weir, Close Brothers, Axis-Shield, Computacenter, Hill & Smith, Antofagasta, Tullett Prebon.



wednesday: Numis Securities expects no surprises when PartyGaming posts its full-year results. The online gaming group has already told the market to expect at least $143m (£101m) in earnings before interest, tax, depreciation and amortisation. The focus, therefore, is likely to be on current trading, possible cost savings and on any news regarding the company's discussions with the US Department of Justice. "We expect current trading to have continued the improving trend shown in the first five weeks of 2009, and we expect Party to guide to a significant reduction in marketing and operating costs for [this year] as well as updating on how its emerging business-to-business strategy is progressing," Numis said, reiterating its positive stance on the company.

International Power's full-year results are expected to show continuing growth, with Deutsche Bank forecasting £605m in pre-tax profits – compared with £597m in the year before – and 29.3p in earnings per share.

Looking ahead, the broker said further progress may be harder to achieve in light of tougher credit conditions and some adverse power markets.

Johnston Press is also due to post full-year results and, given recent market concerns, investors are likely to focus on the publishing group's debt position and the state of advertising revenues.

Results/updates: Chime Communications, Costain, Savills, Tullow Oil, Uniq, Ark Therapeutic, BPP Holdings, Interserve, Laird, Trafficmaster, Yule Catto, International Power, Johnston Press, PartyGaming. Other: FTSE index review.



Thursday: Fingers will be crossed at Standard Life when the insurer posts full-year figures. Although the company is considered more defensive than its peers, life assurance shares have been under pressure as traders fret about the possible need for capital in the sector as equity markets falter and concerns mount about the potential for higher than expected corporate bond defaults.

Results/updates: Dignity, Group NBT, Amec, Cineworld, EcoSecurities, Inmarsat, Oxford Biomedica, UTV, WM Morrison, Home Retail Group, Standard Life



FRIDAY: JD Wetherspoon is due to publish interim results, with Numis expecting sales to be up by 6 per cent, but margins down by 100 basis points due to a freeze on certain drinks prices alongside higher energy, food, labour and tax costs. "If the trading momentum in late January (like-for-like sales up 6.5 per cent) due to promotional activity has continued, forecasts will have to be upgraded," the broker said. Subject to the gross margins on recent promotions holding up, Numis said the shares should perform well through the results.

Results/updates: Arbuthnot, Aga Rangemaster, Flying Brands, Wetherspoon.

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