The week ahead: Barratt Developments, JD Wetherspoon
4th September 2015 17:19
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Monday 7 September
Trading statements
SimiGon Ltd, Dechra Pharmaceuticals, Green Reit.
AGM/EGM
Better Capital, Adgorithms.
Tuesday 8 September
Economic news
August's BRC retail sales monitor report is published on Tuesday - Investec's Victoria Clarke expects to see sales growth in values terms having held "more or less steady" from last month's reading.
"We are pencilling in an increase of 2.1% y/y on a total sales basis, or 1.1% on a like-for-like basis," says Clarke, who views the main factors that support UK consumer spending momentum as solid.
Trading statements
SQS Software Quality Systems, Curtis Banks Group, Hydro International, Gamma Communications, InterQuest Group, Verona Pharma, Frontier Developments, Mucklow (A & J) Group, Ashmore Group, ISG.
AGM/EGM
Greene King, BATM Advanced Communications, Byotrol, Bacit.
Wednesday 9 September
Housebuilder will release full-year results midway through the week, and with guidance already given in July, Deutsche Bank analyst Glynis Johnson expects "little surprise" from the remaining numbers.
"In July, Barratt guided FY 15 PBT [profit before tax] 2% ahead of consensus to £565 million, benefiting from completions 2% ahead of DB estimates (+9.6% YoY) and selling price +8%. The group reported FY 15 ROCE [return on capital employed] of 23.8%," says Johnson.
"In line with guidance Barratt approved £957 million of land purchases in FY 15 (meeting or exceeding its hurdle rates). However reflecting a higher level of land creditors (35% of owned land), as well as a better operational result, it reported a YE net cash position of £185 million (previously guidance £50-100 million)."
With these details already released, investors will most likely focus on current trading and topics discussed in the analyst meeting, according to Johnson, which may include Barratt's usage of government and strategic land, the structural capacity of the group and its cash flow.
"We continue to believe the impact of any rate rises (when finally seen) will be moderate. As such with the stock trading at 1.8x 2016 P/NTAV, we see the group's ROCE potential and improving dividend as underestimated," adds Johnson, who maintains her 'buy' rating and 662p target price.
Economic news
Last month's manufacturing output and industrial production figures will be revealed on this day.
"The manufacturing PMI has been stuck in the 51.4 to 51.9 range since April, pointing to modest expansion in the sector," says Investec's Clarke, who expects to see the official manufacturing output figures record a small 0.2% monthly rise.
"In terms of the wider measure of industrial production, we are looking for a 0.3% monthly rise, with mining and quarrying output seen expanding modestly, after the 3.8% drop in June."
Trade figures will also be released on Wednesday. With sterling so buoyant and surveys signalling a weakening in export orders, Investec suspect that the decent trade figures of the last couple of months will not last. Its prediction is for the shortfall in trade in goods to have widened to £9.6 billion in July, from £9.18 billion in June.
Expect a similar picture in terms of the balance of trade in goods and services, says Investec, which pencils in a deficit of £2 billion from June's £1.6 billion.
Trading statements
Dalata Hotel Group, Hargreaves Lansdown, Futura Medical, Martinco, Advanced Medical Solutions Group, Alliance Pharma, Barratt Developments, Monitise, Mattioli Woods.
AGM/EGM
Trakm8 Holdings, Miton Worldwide Growth Investment.
Thursday 10 September
Economic news
With demand still outstripping supply, house price gains should continue in the coming months. It is therefore no surprise that Investec is forecasting the RICS housing survey price balance to rise further in August to +46%.
Monetary Policy Committee (MPC) announcements will be made and minutes published on Thursday.
"Any change to the stance of monetary policy looks very unlikely this time. August's IR [interest rate] was consistent with the Bank rate remaining at 0.5% for a while longer and the recent uncertainties over China, if anything, could argue for a longer policy pause," writes Investec's Philip Shaw.
Meanwhile, the committee is almost certainly set to vote unanimously to keep the stock of purchased assets at £375 billion, adds Shaw.
Trading statements
Cambridge Cognition Holdings, Morrison (Wm) Supermarkets, Next, Ricardo, Dunelm Group
AGM/EGM
CIC Gold Group, Acorn Minerals.
Friday 11 September
Deutsche Bank sees little scope for positive surprises when announces its full-year results, due in part to a predictably terrible British summer weather.
The broker estimates clean EBITA (earnings before interest, taxes and amortisation) down -2.3% on sales +8%, Deutsche are in line with consensus EBITA for the year and 2-3% lower for FY16E & FY17E. Margins are expected to decline again in FY16E, also.
'Hold' says Deutsche, with a 675p target price.
Trading statements
Wetherspoon (J D)
AGM/EGM
Schroder Real Estate IT.
This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.